We all made it to a new year. No one thought the pain and suffering of 2020 would ever end but gladly it did. (Especially for my Philadelphia Eagles.)
(Related: 6 Industry Sales Opportunities for 2021)
We now have a reset opportunity for all things money.
I think we should take advantage of turning the calendar’s page and highlight 2021 as “The Year to Talk About Money.”
For most all of your clients and prospects, if there was ever a time to pause and rethink their relationship with money, it’s now. Let’s just take a look at the money areas that have or may change in the twelve months ahead. Even a cursory glance at this list should drive all of us to the realization that we need to reach out to clients and prospects to have a money talk. Here are the key areas screaming for attention:
1. The Uncertain Economy
What type of economy will exist in the new year? How will it impact employment prospects, salary levels, interest rates and stock market returns? When will the positive impact of the vaccines be felt? Which businesses will not come back? Which new businesses will prosper? There is much uncertainty related to the economy here and in the developed world. How will it impact households?
2. The Savings Rate
As a result of the pandemic, the household savings rate has climbed to 13.6% from 7.6% in 2019 according to Statista Research’s Dec. 3, 2020, release. For those lucky households, the question is how they will deploy these increased savings to improve their financial futures–protection, savings or investments?
3. Financial Plans
As we read in the financial media, approximately 30% of households have a written financial plan or budget of some kind. This low number continues to surprise me. Like my childhood hero Yogi Berra used to say, “If you don’t know where you are going, you’ll end up someplace else.” How can we help households get a plan in place to guide their efforts?
4. Replenishment of Emergency Savings
Many households will need a plan to replenish their emergency funds they used during the pandemic. How will they get back to where they were financially?
5. Changing Income, Property and Estate Taxes
At some point this year the reality that all the pandemic related and projected stimulus spending and tax revenue shortfalls will need to be repaid will set in. This will likely result in many jurisdictions proposing increased taxation of higher income, estate and asset households. How should consumers act to minimize these increased tax burdens?