KNOW: Gen Xers, born between 1965 and 1982, have a strong independent streak, reflected in their reputation as job hoppers. But Gen X anxieties are rising, reports the Associated Press, as the recession crimps job creation, retirement-delaying Boomers clog the top ranks, and tech-savvy Millennials press from below.
DO: Gen Xers with a family and mortage need to settle down, get steady work and save more. But how does a trusted advisor make that message palatable? Appeal to their independence. Building up that nest egg gives them options — including the option of leaving a dead-end job if it becomes really intolerable.
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KNOW: This recession is a Great Depression to Millennials, those under age 28. Unemployment is higher, incomes are lower and debts larger than faced by any other generation. That’s why when they run out of money, they come back home to live off of Mom and Dad, guaranteed.
DO: Make sure you understand the family dynamics facing your Boomer clients, some of whom are staying in the workforce to strengthen their own retirement plans. Now, they face returning Millennial offspring needing financial assistance as well.
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KNOW: Reversing a trend in which older adults have fewer disabilities than previous generations, Boomers in their 60s are experiencing more disabilities, according to research funded by the National Institutes on Aging. The deterioration is likely related to the increased incidence of obesity.
DO: It may be awkward to bring up a client’s weight, but financial advisors don’t win trust by tip-toeing around unpleasant facts. And the fact is, severely overweight people are at significantly greater risk of experiencing disabilities than people with healthy weights — and they need to adjust their long-term financial plans accordingly.
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KNOW: If you didn’t believe the dozen or more previous surveys saying essentially the same thing, believe it now: Americans are determined to be more disciplined and conservative with their finances. Sixty percent say that they have paid down some debt, and 20% say they are saving more, according to MetLife’s recent Lessons Learned Poll.
DO: While Americans of all ages are more risk averse, be attuned to generational differences. According to MetLife, the younger generations are more optimistic about their financial future, while Boomers fear that it may take a decade to recoup their recent losses. Tailor your approach accordingly.
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KNOW: The market for annuities is expected to stay strong for the foreseeable future, as more and more Boomers realize it is the only investment they can make that delivers a guaranteed paycheck for life.
DO: Stay abreast of news and information available to your Boomer clients about annuities. Today’s Wall Street Journal features an advertising section called “A Guide to Annuities” that’s worth a close read (not available online).
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