By Peter Reagan
If there is one thing that the CEO of the fifth largest bank in the world should know something about, it’s what is going on in the economy.
Not the numbers in government reports that don’t connect to the reality that everyday Americans live in. Abstractions like GDP and consumer sentiment. What we’re interested in is the real economy we interact with daily.
Now, obviously, some CEOs seem disconnected from reality. I’d go so far as to say most CEOs don’t really live in the same economy that you and I do. Bank CEOs, though, they tend to actually know what they’re talking about. Bank CEOs know their businesses only grow when the economy is healthy. In other words, the banking sector is what we call an economically sensitive part of the business world. When the economy is strong, banks thrive – and when the economy slows, banks usually see the contraction first. They see it in fewer loans to entrepreneurs. Auto and credit card loans going overdue, then defaulting. Everything from mortgage loans to overdraft fees, big banks have their fingers on the pulse of the American economy.
That’s why I tend to listen to JPMorgan Chase CEO Jaime Dimon. He’s arguably the most successful bank CEO alive today. (In fact, according to rumor, he was considered for promotion to Secretary of the Treasury under at least two presidents.) Better still, Dimon hasn’t been shy about saying what he thinks about the economy over the last few years.
Dimon’s economic warning
Dimon wrote in his annual letter to investors that he is concerned about the conflict in Iran and its impact on inflation and interest rates. Both, he thinks, are headed in the wrong direction… and could tip the economy into a recession.
Now, we’ve heard people warn about recessions for years, sometimes with more validity and weight behind their opinions than others. Dimon’s warning gets my attention not just because he’s in the banking sector. Also because Dimon knows that, if he’s right, the banking sector will take a big hit.
So is he right? Here’s what we know…
Everyday Americans are already struggling in the current economy. Payroll firm Dayforce recently reported that workers have slashed retirement savings significantly. The reduction was sharpest among workers earning $50,000-$100,000 a year. And they aren’t just saving less. A shocking 20% of full-time workers took loans from their 401(k)s (the largest share since Dayforce began tracking the data).
What’s the culprit? One of the executives of Dayforce explained that “workers were setting aside their retirement goals to focus on more immediate budget issues.”
That makes sense. It’s in line with the Allianz report we saw a few months ago that “Nearly half of Americans say they are more financially stressed heading into 2026 than they were at the beginning of 2025.”
To make matters worse, Marissa Matozzo with the New York Post pointed out that financial advisors now recommend we save an additional $200,000 in order to afford “comfortable” retirement in 2026. That’s an awful lot of money. (Especially when you consider the median household income is just under $84,000… Saving 15% of that amount, it would take nearly 16 years to make up the difference!)
Now, if you’re a long-time reader, you’ll know we’ve covered this before (see, for example, For Retirement, $3 Million Is the New $1 Million). Inflation means those “magic number” goalposts are always moving. But I have never seen such a dramatic increase in a single year.
And history tells us these estimates rarely move downward once adjusted upward.
Now, one thing I respect about my fellow middle-class citizens is they’re extremely resourceful. Instead of giving up on retirement completely, they’re adopting some innovative strategies…
How some families are filling the financial gap
So, knowing they need to save more even if they can’t afford to, what do people do?
A Northwestern Mutual study of retirement planning reveals one strategy. Fully one third of American families admit experimenting “high-risk/speculative assets” in the desperate hope they’ll make up that retirement savings shortfall.
What kind of assets? They’re turning to things like sports betting, cryptocurrencies and options.
I’m not kidding.
Here’s the thing: Sports betting is a hobby, not an investment. Cryptocurrencies are likely the most volatile asset in existence… And most options are all-or-nothing propositions. Like lottery tickets and slot machines, each of these “investments” offers a negative average net return.
Granted, a few people hit the jackpot every year. Just enough winners to keep the crowd coming back for more. Some win big. Most lose a little, and a few lose a lot.
Desperate people make desperate choices.
It’s not just savers facing this dilemma today, either. Retirees are struggling with a steeper cost of living, too. What do they do when they can’t pay the bills?
Chad Gammon of Custom Fit Financial tells us:
“The greatest risk is if a retiree needs to sell investments at a loss to cover living expenses. That can accelerate the depletion of the account and make it harder for income later in retirement.”
This concept, known as “sequence of returns risk,” explains why a recession in the first few years before (or after) retirement can derail decades of planning and saving.
No one wants to face a situation like this: Behind on saving, taking loans to pay the bills and taking major risks in hopes of making up the difference. Everyone who’s worked their whole life to provide for themselves and their families knows just how devastating it can feel. As if control of your finances was ripped from your hands.
That can leave you feeling helpless. Desperate. In those states of mind, you tend to make decisions emotionally, not rationally. Sometimes we make bad decisions just so we can feel like we’re doing something, even if it’s the wrong thing.
We’re only human, after all. We can’t turn off our feelings and become emotionless investing robots. So how can we work through such a situation?
Building a firm financial foundation
When you feel yourself falling into a financial panic, the first step is hard. Simple, but hard. In the words of Dwight Eisenhower:
Don’t just do something, stand there!
Avoid making financial decisions when you’re off balance. Emotional decisions are usually unwise decisions. Instead, you want to approach your retirement planning rationally, with a clear head. Sometimes you’ll need professional help to get past this stage. If you do, get the help you need!
Because once you’re able to move past the emotion (even temporarily), then you’re better positioned to make a wise decision. As Grandpa Reagan used to say, “You can’t take the bull by the horns if your hands are shaking.”
Build a firm foundation for your financial future. Even if you need growth (and risk) you likely also need to know with total confidence that, even if the worst happens, you’ll have something to fall back on. That’s the psychological comfort of a firm foundation. From an investing perspective, your firm foundation can lower the volatility of your savings (and even increase your returns).
One of the best options for your firm financial foundation, in my opinion, are inflation-resistant assets. Especially physical precious metals.
I’m not alone. For example, Investopedia has this to say about gold:
Gold has often been considered a hedge against inflation. In fact, many people have looked to gold as an “alternative currency,” particularly in countries where the native currency is losing value [also known as inflation]. These countries tend to utilize gold or other strong currencies when their own currency has failed. Gold is a real, physical asset, and tends to hold its value…
When inflation increases, gold often performs better than many other asset classes. Furthermore, adding physical precious metals to your savings adds all the benefits of diversification. There’s a reason prudent savers have prized gold investments throughout human history.
Can you imagine a firmer financial foundation than one built on bars of gold and silver bullion?
If you’d like to find out more about how to diversify with physical precious metals in tax-advantaged ways, get your free copy of the 2026 Precious Metals Info Kit. Granted, owning physical precious metals is a lot less exciting than gambling on the Final Four. Even so, I expect it’s a lot more beneficial to your financial future.