An Aviator’s Guide to Financial Well-Being
By Dave Mirolli, Managing Director, Wealth Management Advisor | Apollon Catalyst
Identifying Financial Headwinds
Have you ever flown to Europe for a vacation or business? If so, you probably remember the flight back to the U.S. took a bit longer. A recent flight I took from London to Atlanta was two hours longer than flying from Atlanta to London. This difference in flight time is quite common in late fall and winter due to strong headwinds from the jet stream. These winds can blow as strong as 200 miles per hour from west to east in the Northern Hemisphere. The strength of those headwinds can significantly can really lengthen your westbound travel time. That’s why we pilots plan our route and fuel loads with these winds in mind.
That’s why we pilots plan our route and fuel with these winds in mind. Similarly, in wealth accumulation and retirement, people need to understand that their finances will encounter headwinds.
As a financial advisor and pilot, I wanted to give you the top headwinds your finances will encounter—and maybe a few tailwinds to watch for as well. A simple acronym to remember these headwinds is TILEST:
T – Taxes
I – Inflation
L – Loss
E – Expenses
S – Sequence of Returns
T – Timing
Taxes
Benjamin Franklin is quoted as saying, “In this world nothing is certain except death and taxes.” It’s crucial to know how much you pay in taxes and have a clear strategy for reducing that burden. Tax planning should be proactive and integrated with your overall financial plan.
Taxes fund our infrastructure, military, public services, and education, which help maintain and grow a nation’s wealth over time. But for individuals, inefficient tax strategies can erode wealth, limit compounding returns, and reduce capital available for investing or legacy planning. Global differences in tax policy—from high-tax Scandinavian countries to lower-tax jurisdictions like Singapore or the UAE—reflect diverse philosophies on wealth redistribution and investment incentives.
A proactive accountant working hand in hand with your financial advisor can make a world of difference. Too often, clients only speak with their accountant after the year is over, limiting options for savings. Ideally, impactful tax planning with a focus on reduction should happen before year-end. Some planning practices have, in certain cases, created 10% or more in savings on state tax requirements, while other, more sophisticated strategies may impact both federal and state levels. Have your financial advisor and accountant talk early in Q4 to coordinate strategy. The savings from taxes, reinvested consistently, can compound over time to a meaningful amount.
Inflation
The Bureau of Labor Statistics defines inflation as “a general increase in prices in an economy and consequent fall in the purchasing value of money.” That means as the price of goods and services goes up, the purchasing power of every dollar goes down.
From January 2020 through January 2024, overall U.S. consumer prices rose approximately 22% – which equates to a compound annual inflation rate of about 5% per year. This exceeds the long-term average of roughly 2–3%. In practical terms: if you had a basket of goods cost $100 in early 2020, the same basket would cost around $122 in 2024. And by the time you retire, if your income doesn’t increase at a minimum that rate, your standard of living will erode.
For those in or nearing retirement, inflation isn’t a gradual nuisance—it’s a major headwind. Here’s why:
· Your income base (pension, Social Security, fixed withdrawals) may not adjust sufficiently to keep pace with rising prices.
· Expenses like healthcare, housing, and services often rise faster than the average inflation rate.
· Over a 30-year retirement, even just a 3% annual inflation rate means your purchasing power is halved by year 30.
To stay ahead of inflation, your financial plan should include:
· Investments with real growth potential (equities, real estate, inflation-protected securities)
· Regular inflation scenario simulations, adjusting withdrawal rates and portfolio performance assumptions
· Dynamic income strategies, such as escalating withdrawals or a hedge component, so your income adapts to rising costs
Inflation affects every investor. When you understand the long-term, compounding nature of this headwind, you can design a portfolio and withdrawal strategy built not simply to survive, but to thrive.
Loss
Avoiding or minimizing the headwind of loss is directly tied to your risk tolerance. Your ability to take on financial portfolio risk comes from a variety of factors, including your age, portfolio size, and willingness to stomach volatility. In my initial conversations with clients, I often ask how money was talked about growing up, was it abundant or scarce? These emotional impressions deeply impact risk behavior today. Constructing a portfolio that aligns with your ability to handle loss is crucial to your financial flight plan.
Expenses
Investment expenses and fees vary widely depending on the vehicle, advisor group, and services provided. Consider this example from the U.S. Securities and Exchange Commission: If you invested $10,000 in a product with a 10% annual return before expenses and annual operating expenses of 1.5%, after 20 years you would have about $49,725. But with just 0.5% in annual expenses, you’d end up with $60,858—a full 18% increase. The goal is not always to pick the cheapest investment, but the most efficient after expenses and that means competitive rates of return.
Sequence of Returns
The sequence of negative returns at the start of retirement can devastate a financial plan. It refers to the order in which returns are received, especially during withdrawal phases. Even if the average return is positive, early negative years can leave a portfolio permanently impaired.
Let’s break this down using an example.
🎯 Base Assumptions:
· Starting Retirement Portfolio: $1,000,000
· Annual Withdrawal: 5%, adjusted for 2.5% inflation annually
· Investment Horizon: 20 years
· Average Return Across All Scenarios: 6%
We simulated four scenarios:
· Negative market years occurred in Years 1–5
· Negative years in Years 6–10
· Negative years in Years 11–15
· Negative years in Years 16–20
The negative return years were consistent across all simulations:
Years of Decline: -18%, -12%, 0%, -8%, +2%
This mirrors a situation similar to the 2000–2002 tech crash or the 2008–2009 Great Recession.
Here’s a summary of the ending balances:
📉 Key Takeaways:
· When losses hit early in retirement (Years 1–5), the portfolio collapses quickly—even if average returns are the same as in other scenarios.
· Losses in later years (Years 11–20) are more survivable because the portfolio has had more time to grow before being impaired.
· This underscores the need for a buffer or protected income stream early in retirement to give growth assets time to recover.
🧭 Risk Management Solutions:
To mitigate this risk, financial advisors often build:
· Cash Flow Ladders: 3–5 years of cash, CDs, or short-term bonds to avoid selling stocks in down years.
· Buckets Strategy: Segregating assets by timeline-short, medium, long-term.
· Annuities or Income Guarantees: Providing consistent income regardless of market performance, subject to product terms.
· Dynamic Withdrawal Strategies: Reducing withdrawals during poor market years to preserve capital.
Timing
Just as pilots must time departures and fuel stops based on atmospheric conditions, investors must recognize when and how to act. The difference between letting a portfolio compound uninterrupted versus reacting emotionally can result in vastly different outcomes. Time in the market historically tended to beat timing the market. Regular financial checkups, just like simulator training for pilots, are essential to recognize these headwinds early and adjust course. With the right plan, guidance, and accountability, these headwinds can be anticipated and sometimes even turned into tailwinds.
Apollon Wealth Management, LLC (“Apollon”) provides advice and makes recommendations based on the specific needs and circumstances of each client. For clients with managed accounts, Apollon has discretionary authority over investment decisions. Investing involves risk and clients should carefully consider their own investment objectives and never rely on any single chart, graph, or marketing price to make decisions. This content is for informational purposes only and does not constitute investment, financial, tax or legal advice. These scenarios are hypothetical and for illustration only; they do not represent actual results or guarantees. It is not a recommendation or solicitation to buy or sell any security. When information is sourced from third parties, although believed to be reliable, it has not been independently verified, and its accuracy or completeness cannot be guaranteed. Any opinions, projections, forecasts, and forward-looking statements presented herein are valid as on the date of this document and are subject to change. Please consult a licensed professional before making investment, tax, or legal decisions. Please visit our website https://apollonwealthmanagement.com for other important disclosures.
