From the October 2009 Issue of Senior Market Advisor Magazine
Enormous challenges are ahead of us. Unaddressed, those challenges could cause serious pain for everyone. It is imperative that our clients are prepared, so they can turn these challenges to their advantage.
Let me be clear: We do not make people rich. We prevent them from ever being poor. Our industry must never lose sight of that. Our industry must take a leadership position because our job is to provide guarantees and conservative financial foundations.
The media is reporting that our economy is on the road to recovery. But misunderstanding these headlines could place our prospects and clients in financial jeopardy. Don’t let yourself be blinded by this propaganda. Now is not the time for risk. Keep your clients safe.
Some talking points
Here is a list of talking points to share with everyone so they understand what is happening. This is especially important for our seniors, because they are uniquely positioned to take beneficial actions. Seniors provide the greatest opportunity for advisory success because they have assets that can be preserved and leveraged.
You should be talking about Social Security, health care, Medicare, Medicaid, national debt, housing, unemployment, increasing gas prices, college student debt, infrastructure and taxes with every one of your prospects and clients.
Social Security solvency is being overshadowed by health care discussions that include Medicare and Medicaid. It shouldn’t be. Social Security will be the next big taxpayer bailout.
The missing money
Earlier projections showed surpluses of $87 billion this year and $88 billion next year. But the recent Social Security Administration trustees’ report showed that a dramatic drop in Social Security tax revenue dropped surpluses to $19 billion this year and $18 billion next year, based on 9 percent unemployment. Rising unemployment rates could have Social Security at negative cash flow, earlier than the 2017 projection. If we bail out banks and car companies, we also need to bail out Social Security, even if this will cause our country to go further into debt.
Meanwhile, the recession is starving governments of tax revenues. The recovery is being called a “jobless recovery.”
The government will have to reduce spending or inflate the currency to deal with the national debt. Or they will greatly increase our dependence on foreign lenders at much higher interest rates. Either way, they will have to increase taxes. We must prepare our clients for this scenario.