We are all in the business of helping our clients have a stronger retirement by planning ahead. As an Investment Advisor myself, I know it is important to look at all factors for your clients, and not just how well the stock market is doing, to determine where to put their assets. While it may not be common knowledge it is common fact that most Americans have not saved enough for retirement to start with. Just being able to pay the bills takes up most of the average American’s budget. What makes this even harder is trying to climb out of recession when your retirement savings get dramatically reduced. Retirement accounts, unfortunately, are not the only things affected by a recession.
The Census Bureau just released the median household income numbers. In 2016 the median household income finally topped the 1999 peak, adjusted for inflation to $59,039 compared to 1999’s number of $58,665 (source).
What does this mean for your clients?
First, we have had an unbelievable bull market to recover from the last 2 recessions, but our client’s income has not kept pace. Making it much more difficult to save for retirement. Most people expect that income will increase faster than inflation, but this has not been the case.
Additionally, the longer the market climbs, the more likely it is that a large recession is coming.
We don’t have the crystal ball, and no one can tell you or your clients when the market will correct or how bad it will be. What we do know is if your clients have not planned for another correction, and have incorrectly assumed their income won’t be affected down the road, it can have a devastating impact.
We all must start having more in-depth planning conversations that go past the generic income talk and start addressing a more in-depth approach. One that starts with guaranteed lifetime income.
-Brian Rector, Partner @ Able Financial Group
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