Is Now the Time to Retire? 

The Retirement Question Has Never Been More Complicated 

For Americans approaching retirement, the question may no longer be simply, “Do I have enough money to retire?” The more important question may be, “Can my retirement plan withstand what could happen next?” The economic environment facing today’s retirees is unusually complicated. Interest rates are moving higher, inflation remains above the Federal Reserve’s long-term target, energy prices are elevated, wars in Iran and Ukraine are disrupting global energy markets, refineries are being damaged or taken offline, diesel supplies are becoming increasingly tight, and the United States continues to carry an enormous federal debt burden. At the same time, the possibility of a recession remains a concern. None of these factors means that everyone should delay retirement. But they do mean that retirement planning deserves a much closer look before someone leaves the workforce. 

Interest rates are an important part of the equation. On September 16, 2026, the Federal Reserve raised its federal funds target range by one-quarter percentage point to 3.75%–4.00%, its first increase in three years. The Federal Reserve said inflation remains elevated and that uncertainty surrounding the economic outlook remains significant.[1] The Fed’s September projections put the median federal funds rate at approximately 4.1% at the end of 2026 and 4.1% at the end of 2027.[2] Higher interest rates can be beneficial for people holding cash and short-term investments because yields can be higher, but they also increase borrowing costs and can put pressure on businesses and consumers. For retirees, there is another important consideration: when interest rates rise, the market value of existing bonds generally falls. Someone approaching retirement therefore needs to understand not only how much income a portfolio produces, but also how that portfolio could behave if interest rates remain elevated. 

Inflation presents an even greater long-term challenge because retirement can last for decades. The Federal Reserve’s September 2026 projections put its median forecast for PCE inflation at 3.7% for 2026, considerably higher than its 2% long-term objective.[2] Even what appears to be a modest difference in annual inflation can dramatically change a retiree’s purchasing power. Someone spending $100,000 per year today would need approximately $122,000 after 10 years and $149,000 after 20 years if inflation averaged 2%. At 4% inflation, the same lifestyle would require approximately $148,000 after 10 years and $219,000 after 20 years. This is why retirement planning cannot focus only on how much money someone needs today. The real question is how much purchasing power that income will provide 10, 20 or 30 years from now. 

The energy situation adds another layer of risk. The wars involving Iran and Ukraine are affecting the global oil market in ways that go far beyond the price displayed on a gas station sign. The conflict involving Iran has disrupted the normal flow of crude oil and refined petroleum products through the Middle East, while restrictions and attacks around the Strait of Hormuz and the Bab el-Mandeb have complicated shipping routes. The International Energy Agency reports that nearly 3 million barrels per day of refining capacity in the Gulf region has been shut because of attacks and a lack of viable export outlets. The IEA also reports that refined-product exports from the Gulf remain dramatically below pre-war levels.[3] 

The situation is particularly concerning because the world does not simply need crude oil. It needs refineries to turn crude oil into gasoline, diesel, jet fuel, heating oil and other petroleum products. When refineries are damaged, shut down or unable to obtain adequate crude feedstock, the problem can quickly move from an oil-price problem to a fuel-supply problem. The International Energy Agency describes refined products as the area where the energy market is currently under the greatest strain.[3] That distinction is extremely important. The world can have crude oil available somewhere in the system while still experiencing shortages of particular fuels in particular regions. 

The war in Ukraine is adding another significant pressure to the global refining system. Ukraine has intensified drone attacks against Russian oil refineries and energy infrastructure. According to the International Energy Agency, Russian refinery throughput fell to approximately 3.8 million barrels per day in June 2026, about 30% below the previous year and the lowest level in more than two decades. Russian diesel production was estimated to be nearly 30% lower than in 2025, prompting Russia to restrict diesel exports in an effort to protect domestic supplies.[4] The IEA reports that in the first eight months of 2026, a Russian refinery was hit approximately once every three days. Some facilities have been attacked repeatedly, and damage to sophisticated refining equipment can take many months to repair.[4] 

This matters to Americans because Russia is one of the world’s major oil producers and refined-product exporters. When Russian refineries produce less gasoline and diesel, those products have to be replaced somewhere else. That means European, Asian and American refiners may face greater demand for their products. The result can be tighter global inventories and higher prices even if the United States itself has sufficient crude oil production. 

The consequences are already showing up in diesel markets. The IEA reports that global seaborne gasoil and diesel exports averaged 4.7 million barrels per day during the first eight months of 2026, down 10% from the previous year. Combined diesel and gasoil exports from the Middle East and Russia fell dramatically, leaving the global market much more vulnerable to additional disruptions.[4] The IEA also reports that diesel inventories are being drawn down and that refinery utilization outside the affected regions is already extremely high, limiting how much additional production can easily be brought online.[4] 

The U.S. Energy Information Administration is also warning about tight diesel supplies. Its September 2026 outlook projects that U.S. distillate inventories will fall below 100 million barrels in September and remain below the five-year average through much of 2027. The EIA expects global distillate production to remain below last year’s levels in the coming months, contributing to low U.S. diesel inventories and elevated diesel prices.[5] That is significant because diesel is not simply a fuel for automobiles. It powers trucks, agricultural equipment, construction equipment, ships, generators and much of the machinery responsible for moving goods throughout the economy. 

When diesel becomes more expensive, the effects can spread throughout the economy. A truck delivering food costs more to operate. A farmer harvesting crops pays more for fuel. A construction company pays more to move equipment and materials. Shipping becomes more expensive. Airlines and transportation companies face higher operating costs. Manufacturers face higher transportation and energy expenses. Eventually, some of those costs can be passed along to consumers. For retirees living on fixed or semi-fixed incomes, higher transportation, food, home-heating and service costs can steadily erode purchasing power. 

This is why the current energy situation deserves attention in retirement planning. The risk isn’t simply that gasoline might cost another dollar per gallon. The bigger concern is that a prolonged shortage of refined products could create another wave of inflation throughout the economy. The IEA estimates that diesel accounts for nearly 30% of global oil demand and reports that diesel prices in the United States have nearly doubled compared with pre-war levels.[3] The organization also warns that losses of petrochemical feedstocks are affecting the production of plastics, chemicals and fertilizers, creating another potential pathway for higher prices. 

Then there is the federal government’s financial position. The United States is carrying more than $40 trillion in debt subject to the statutory limit, and the Congressional Budget Office projects that debt subject to the limit will continue rising substantially over the next decade.[6] CBO projects a federal deficit of approximately $1.9 trillion in fiscal year 2026 and approximately $3.1 trillion by 2036 under its baseline projections.[6] These numbers don’t tell us exactly what future tax rates will be or how policymakers will respond. But they do highlight an important retirement-planning issue: today’s tax environment may not necessarily be tomorrow’s tax environment. 

For someone with substantial money in traditional IRAs, 401(k)s and other tax-deferred accounts, that possibility matters. Retirement income isn’t necessarily the same as retirement cash flow. A retiree may have $2 million in an IRA, but the government has not necessarily forgotten about the taxes associated with that money. Required minimum distributions, Social Security taxation, Medicare premiums and future tax rates can all influence how much of a retirement portfolio can actually be spent. 

And then there is the possibility of a recession. 

The U.S. economy is not currently projected by the Federal Reserve to enter a recession. The Fed’s September projections show median real GDP growth of approximately 2.3% in 2026 and 2.4% in 2027.[2] But economic forecasts are not guarantees. The economy is being confronted by higher energy costs, geopolitical uncertainty, elevated inflation and tighter financial conditions. If economic growth slows significantly, the combination of falling investment values and rising living expenses could create a difficult environment for someone who has just retired. 

That brings us to one of the greatest risks facing a new retiree: sequence-of-returns risk. 

Imagine someone retires with $2 million and expects to withdraw $100,000 a year. If the market falls 25% shortly after retirement, the portfolio could decline to approximately $1.5 million while the retiree still needs the same $100,000 of income. The problem isn’t simply the market decline. It is the combination of the market decline and withdrawals. A person who is still working may have the ability to wait for a recovery, continue contributing to investments or delay retirement. A retiree may not. 

That is why the question shouldn’t simply be, “Can I retire today?” It should be, “What happens to my retirement plan if the next five years are very different from the last five?” 

What happens if inflation remains above 3%? What happens if interest rates remain elevated? What happens if oil remains above $100 a barrel? What happens if diesel prices remain high? What happens if another refinery is damaged? What happens if the war in Iran continues to disrupt shipping through the Strait of Hormuz? What happens if Ukrainian attacks continue to reduce Russian refinery production? What happens if the stock market falls 20% or 30% shortly after retirement? What happens if taxes rise? What happens if healthcare costs are higher than expected? And what happens if you or your spouse live into your 90s? 

These aren’t predictions. They are stress tests. 

The goal of retirement planning isn’t to predict the next war, the next recession, the next market crash or the next move by the Federal Reserve. Nobody can consistently predict those events. The goal is to build a retirement plan that can withstand a range of possible outcomes. 

For someone considering retirement today, that means looking at the entire picture: Social Security timing, retirement income, investment risk, inflation protection, bond exposure, taxes, required minimum distributions, healthcare costs, long-term-care expenses, emergency reserves and estate planning. It also means understanding how much income can be safely withdrawn from a portfolio without creating unnecessary risk during the most vulnerable years of retirement. 

The economic world retirees are entering today is different from the one many people experienced during their working careers. Interest rates are moving higher. Inflation remains elevated. Energy markets are being disrupted by wars in Iran and Ukraine. Refineries and energy infrastructure are being damaged. Diesel supplies are tightening. Global shipping routes are under pressure. Federal debt continues to grow. And while the U.S. economy remains in expansion, the possibility of a future slowdown cannot be dismissed. 

None of this means you shouldn’t retire. 

It means you shouldn’t retire without stress-testing the plan first. 

The question isn’t simply whether you have enough money to retire under today’s conditions. The more important question is whether your retirement plan can continue to provide the income and lifestyle you want if the economic environment becomes significantly more difficult. 

Before you retire, ask yourself one question: If the next five years are very different from the last five, will my retirement plan still work?  

Footnotes & Sources

[1] Federal Reserve Board, “Federal Reserve issues FOMC statement,” September 16, 2026. Federal funds target range and Federal Reserve assessment of inflation and economic conditions. 

[2] Federal Reserve Board, “September 16, 2026: FOMC Projections Materials.” Federal Reserve projections for GDP growth, unemployment, inflation and the federal funds rate. 

[3] International Energy Agency, “The Middle East and Global Energy Markets,” September 2026. The IEA reports major disruptions to Gulf refining capacity, refined-product exports and global diesel markets. 

[4] International Energy Agency, “Russian refining sector struggles amid intensifying Ukrainian attacks,” September 17, 2026. The IEA reports refinery damage, lower Russian refining throughput, reduced diesel production and the resulting pressure on global diesel markets. 

[5] U.S. Energy Information Administration, Short-Term Energy Outlook, September 2026. EIA projects low U.S. distillate inventories through much of 2027 and continued pressure on diesel prices. 

[6] Congressional Budget Office, The Budget and Economic Outlook: 2026 to 2036, February 2026. CBO projections for federal deficits and federal debt.