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For the Week of October 17th, 2025
Fed Warning Signs, Avoiding the Biggest Retirement Traps, and 18 Tax-Free Havens to Know Now
If retirement is supposed to be simple, someone forgot to tell the economy. Between the Fed’s latest caution flag, a delayed Social Security COLA update, and new insights on where your money goes furthest, this week delivered plenty of reasons to stay sharp. We’ve rounded up the key moves, traps, and opportunities every retiree should know - so you can adjust before surprises hit your wallet.
By RetirementRedFlags.com
Stay ahead of the headlines. Protect your savings, outsmart the traps, and keep your retirement on track.
1. The Fed Raises Caution as the Economy Starts to Cool
The Federal Reserve’s latest report revealed growing unease about cracks forming in the economy - including slowing job growth, weakening consumer spending, and a still-stubborn housing market. Inflation may have cooled slightly, but not enough for the Fed to relax. When the Fed grows uneasy, markets often wobble before adjusting. Lower rates may eventually ease borrowing costs, but they can also reduce yields on CDs, savings accounts, and money markets - the very vehicles many retirees rely on for safety and income.
Action Steps:
✔ Revisit your cash flow plan. Model both higher-inflation and lower-rate scenarios so you’re not caught flat-footed.
✔ Check your emergency fund yield. Online high-yield savings accounts often pay better than traditional banks.
✔ Consider private bonds or fixed-income notes with locked-in interest rates. Some privately issued bonds or credit products offer steady yields that can outpace bank CDs.
2. Suze Orman Warns Retirees About 2025's Most Costly Traps
Suze Orman is raising the red flag again - this time with a sharper warning about the quiet mistakes that can undo years of hard work and careful saving. She’s identified five common traps that retirees fall into, not out of recklessness, but from assuming that what worked before retirement will keep working after it.
The big 5 include: depending too heavily on one income source, withdrawing too much after market downturns, overlooking taxes & RMDs on retirement accounts, underestimating rising healthcare costs, and locking themselves into rigid plans that don’t adapt when life changes.
Action Steps:
✔ Map all your income sources. Make sure you’re not over-dependent on just Social Security or one investment account.
✔ Build a withdrawal strategy. Use a “guardrail” method (e.g., withdraw less after a down market).
✔ Review tax efficiency. Coordinate withdrawals across taxable, tax-deferred, and Roth accounts with your advisor.
3. Social Security’s COLA Update Delayed Until Oct. 24th
The long-awaited 2026 Social Security cost-of-living adjustment (COLA) announcement has been delayed until October 24, following the temporary government shutdown. Early estimates suggest a 2.7% increase, raising the average benefit by about $54 per month - though higher Medicare Part B premiums could eat up much of that gain. For most retirees, Social Security is the backbone of monthly income and the COLA dictates how much breathing room you’ll have next year.
Action Steps:
✔ Mark October 24 to check the official COLA figure.
✔ Budget assuming only a 2-3% increase - anything higher is a bonus.
✔ Watch Medicare premium announcements to see how much your raise actually translates into.
✔ Update your income projections once the final COLA is published to adjust withdrawals and spending.
4. 18 Small Towns Where Your Retirement Income Stays Untaxed
Investopedia’s roundup highlighted 18 small-town destinations with no state tax on 401(k), IRA, or Social Security income. These include hidden gems in states like Tennessee, Texas, and Wyoming - offering both charm and financial relief. Taxes on retirement income can quietly erode thousands from your yearly budget. Relocating to a tax-friendly state (or even county) can stretch savings dramatically.
Action Steps:
✔ Check state tax laws for your target destinations - including estate, property, and sales taxes.
✔ Visit before you move. Spend at least a week in any “potential” town to test climate, healthcare, and community.
✔ Compare total cost of living. A no-tax state isn’t always cheaper if housing or insurance is high.
5. Frugal Habits Helping Retirees Live Better for Less
A Yahoo Lifestyle feature outlined creative ways retirees can maintain comfort without overspending. Think of it as the “financial diet” that doesn’t feel like deprivation. Living frugally but comfortably isn’t about sacrifice - it’s about cutting waste so your money serves what you actually value.
Action Steps:
✔ Leverage community perks. Use local libraries, senior centers, or park passes for free recreation.
✔ Re-evaluate your housing. Downsizing or relocating to a smaller, lower-tax home can free up serious cash.
✔ Audit monthly auto-drafts. Cancel or renegotiate unused subscriptions and memberships regularly.
If you have any questions about the headlines that hit the news this week, we are answering questions in our free Facebook group The Retirement Red Flags Community. Click below and we will make sure you get added.
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