As President Obama and his administration have taken office, they are faced with the worst financial crisis since the Great Depression. Some economists think that the planned stimulus package to revive the economy is a risky decision since we are already in debt by $52 trillion from other government programs currently in place with escalating entitlement costs. What effect will this package have on our country and our industry if we do not experience an economic rebound?
The past year has been one of troubling financial news for all, especially as many boomers approach traditional retirement age with less savings than before. The downturn in the markets has had a devastating effect on the funding of defined benefit pension plans and retirement plans, causing large decreases in many of our savings.
While we all hope the markets will recover soon, the reality of the situation is that no one can be quite sure when that will happen. In the meantime, it is necessary for everyone, including the government, to live within their means. Boomers must also be prepared to work past traditional retirement age to better prepare for the 20 to 30 years they will spend in retirement.
So what does this new administration mean for our industry, for professional financial advisors and for our clients? Before we answer this question, let us not forget what we have learned from the past. Again, we must advise our clients to simply live within their means, reduce debt, and save to offer their children a similar or better lifestyle.
As this past year has shown, it is our job as trusted advisors to counsel our clients through both the profitable and not so profitable times. It is important that we work closely with our senior clients to help them understand–and prepare for–the short- and long-term impact the new administration’s policies may have on their financial future. We must also monitor trends in regard to these policies so we can anticipate the impact on our clients, and proactively help them navigate through changing economic conditions.
I encourage you to make an even bigger impact by becoming actively involved in your communities, and contacting your local officials to collaboratively make the financial future better for generations to come. There are many great opportunities to reach out to boomers.