For Baby Boomers, one size does not fit all.
In the financial industry, a lot of time, resources and energy have been spent telling the earliest of the Baby Boomers how to effectively create a legacy. For these folks, the investment planning strategy is often, “we’ll take your money and grow it into a bigger pile of money so you can leave a legacy gift.”
For these Boomers, you probably have two pension checks, two Social Security checks that you were able to maximize, and you retired in a time prior to social media, smart phones and 24/7 consumerism. Your day-to-day lifestyle is comfortably covered by your pension and Social Security. Now don’t get me wrong, we love working with you! Our tagline, after all, is Growing Wealth, For Generations, and there’s something exciting about creating a legacy gift for whomever or whatever is important to you. There’s nothing more fulfilling than participating in the accomplishment of our clients’ financial planning goals.
But what about the younger of the Baby Boomers? You’re the part of this generation that the overall financial industry hasn’t spent as much time, money, and resources on. Sometimes you’re the butt of the joke. The OBBs (Original Baby Boomers) are featured in Cialis ads lounging in outdoor bathtubs, but you’re portrayed as the greeter at Wal Mart, or panning for gold in your 60s, thinking this time you might just strike it rich like on that Discovery Channel show, Devil’s Canyon. Now, that’s not a bad way to go if you like backpacking into the wilderness, sustaining a solo life and enjoying the outdoors. Just remember, the outdoors includes spiders and black bears – yikes!
Seriously though, this portion of the Boomers probably has only one pension check (if they have one at all), and most likely will have two Social Security checks, but maybe one of you had to take it early because you got caught in the economic collapse of 2007-2008. Many companies went under, issued layoffs or offered early retirement packages to their more seasoned employees. While at the time, this was preferable to losing your job, 10 years removed, maybe the bills are a little tight. When we see folks like you in our office, I’m not hearing “legacy & growth” as much as I’m hearing “maximize my income,” and you need our help.
I know from speaking with hundreds of families that this is not greed, or lack of concern for future generations. It’s simply that your financial circumstances are totally different from the older Boomers. For those OBBs, most of their daily needs are covered by fixed income (pensions and Social Security). But for this second wave of the Boomers, you’re having to rely on those retirement assets (that you’ve saved up) for a much greater portion of your daily sustenance.
The psychology of it is, it’s difficult for anyone to think about leaving a legacy when they’re worried about their day-to-day lifestyle expenses. And believe me, I get that. I’ve had that conversation with folks in this category many times.
Many of the Boomers in the former category tell us they wish they’d met our team 20 years earlier than they did, as they’d be so much further along. And while it’s true, we could have helped those folks a couple decades earlier, they’re doing okay today, simply because of the cards they were dealt. We’ll continue to shepherd them and help grow their assets while protecting against major market downturns.
On the other hand, those latter Boomers, for whom things are tight and they’re trying to stretch those retirement dollars as far as possible, most of these folks come to us from another financial advisor. What we see when we sit down and take a look at what they’re doing is that their previous advisor was managing their assets as if they were one of those Original Baby Boomers who just needs growth – because all Baby Boomers are the same, right?
The reality is that, while it would be great to be able to lump everyone into one bucket, we wouldn’t be doing our jobs if we took that approach. You all are very different and need customized advice. Each of you has different resources, lifestyle goals and cash flow needs, different sources of revenue (Social Security, rental property, etc.), and you need the team giving you advice to understand, first and foremost, where you’re coming from and what you’re trying to accomplish – before any investment options are thrown on the table.
While this seems so simple, I am amazed every day when one of you walks into our office and shows us what your current advisor has prepared for you. When I ask you what you’re trying to accomplish, and then look at your portfolio, it becomes clear that there’s a big chasm between the cookie cutter Baby Boomer portfolio, and what you need to reach your goals.
If you don’t currently work with us, what’s the harm in coming in and letting us hear what you’re trying to do, look at what your portfolio is actually doing, ask a few questions to understand all the puzzle pieces, and let you know if you’re on a good path or if we’d recommend something different? We’re happy to provide a second opinion and a cup of coffee.
I believe that a review of your financial portfolio and all aspects of your financial life should be something that’s as simple as changing the oil in your car, and something you do regularly to make sure your assets are working as hard for you as worked to get them.
And if you are a client, it’s officially summer now, and that means backyard barbecues, more time with neighbors and friends and beautiful sunsets. If you find yourself in a conversation with someone you think would be a good fit for our planning team, be sure to let us know. We won’t bug them – we’ll simply see if they’d like to receive our weekly thoughts. Worst case, we think they’ll be better off just getting a weekly reminder to think about their financial life.
1792 Alysheba Way,Suite 201,Lexington, KY 40509
Phone: 859.219.1006Fax: 859.219.1012
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*Representatives are licensed to offer insurance and annuity products in AL, AR, CO, FL, GA, IN, KY, MA, MD, MI, MO, MS, NC, NH, OH, PA, SC, TN, TX, WV, VA, and WA and are licensed to offer investment products in AL, AR, AZ, CA, CO, CT, FL, GA, IL, IN, KY, MA, MD, MI, MN, MO, MS, NC, NH, NM, NV, NY, OH, PA, SC, TN, TX, UT, WA, Washington DC and WV. This website and its content are not intended for residents of other states. Securities offered through: The O.N. Equity Sales Company, Member FINRA/SIPC, One Financial Way, Cincinnati, OH 45242. 513.794.6794 Investment Advisory Services offered through The O.N. Investment Management Company. Estate Planning Services provided in conjunction with your licensed legal advisor.