Life expectancy has increased by up to 10 or more years than during the last century. Consider the profound question, “Will I outlive my wealth?”
We invest in what people buy. When an equity investment fund or stock is purchased, you indirectly invest in businesses relating to what consumers buy such as the energy they use, the fertilizer the farmers buy to grow the food that we eat, the vehicles we drive, the transportation of goods via truck, rail, or air, and the homes that we furnish or renovate. As you retire, you may invest in what you consume as a retiree when you invest in equity funds.
Baby boomers still affect our economy. Baby boomers, born between 1946 and 1964, are a significant demographic with substantial purchasing power and a unique set of preferences. Economic forecasting informs us that we are affected by demographics. Baby boomers hold the highest average net worth of all living generations. Now retired or near retirement, they still buy new cars and take expensive trips. Many have bought retirement homes in the southern USA, bought their grandkids toys, used gasoline, and consumed groceries. They use health care products and eventually retirement homes.
Now, baby boomers are shifting to make their financial security a priority. We have witnessed a long period of rising, bullish markets pre-2007 and post-2008 that compare historically to another boomer generation—a time that we will refer to as the post-war spending era when the spending of the majority of the populace also benefited the economy. Like the Frank Sinatra generation boomers who entered their spending wave post-World War II, the current Beatles generation—many with four or more children- have moved through a fantastic spending cycle and are now in full or part-time retirement.
An aging populace must invest for financial security. As seniors look to and enjoy retirement, many have made their final mortgage payment or inherited parental wealth. Thus, their discretionary investing power is immense in relation to their sheer numbers—to a great extent, they have and still enhance our economy as they spend a lot of money.
We are living longer. Your investments should last 10 years longer than your parents’ lifespans. Of the two spouses, women, on average, will outlive men and necessarily need to extend their income further.
Make sure you have a wealth management professional working for you. The primary focus will be on creating a secure income. A generation predictably works, saves, and finally spends as they age. The average individual looks for increased quality and spends more money as they approach age 50 and shift from spending to protecting their wealth.
Get professional guidance. Investing their retirement assets strategically, using professional financial strategists to manage and protect their money, will increasingly take precedence as they become contented utilitarian consumers. As Montaigne wrote about his father, who inherited a large estate: “He was very fortunate in being able to keep his desires down to his means, and to be pleased with what he had.“ In simple terms, “Live below your means.“ Creating the income you desire will determine your future means.
Call us to set an appointment to learn how to maximize your income for a lifetime of retirement.
