Anticipated Changes in Workplace Demographics

Online shopping has become the norm in the Western part of the world. Experts say mature economies adopted e-commerce quickly because of its strong infrastructure and a trusting financial landscape.1

In other words, consumers could count on receiving goods ordered, vendors knew they would get paid and any conflicts were protected by a reputable credit and court system. These things weren’t true in many developing countries, thus e-commerce was slower to gain traction there.

However, now that emerging markets have put a secure infrastructure in place, many expect online sales to soar — which could help bolster those waning economies. The global online market offers new prospects for struggling brick-and-mortar retailers in the U.S. Just about any retailer, large or small, that can adapt its sales model to a global e-commerce market could be poised for massive opportunity.2

That’s one of the interesting parallels between life and commerce — where some doors close, others open; we just need to see where opportunity awaits. The same can be true when planning for retirement. Please feel free to contact us to discuss creating retirement strategies through the use of insurance products that can help you work toward your long-term retirement income goals.

Interestingly, one of the biggest economic issues of the day comes from a social phenomenon: As older people are living longer, younger people are having less children. To be exact, the first of the baby boomer generation turned 70 last year while, at the same time, the fertility rate in the United States reached its lowest point since records began in 1909.3

The ramifications of this population shift will likely be widespread and long lasting. For example, retirees tend to contribute less to the consumer economy, with an average reduction of 37.5 percent in household spending. This, in turn, affects company revenues and, subsequently, returns in the investment market.At the same time, retirees may be drawing down invested assets for income, further reducing available capital.

The elderly population boom also is expected to cause economic drains in targeted areas of the country. For example, states that have long been popular retirement havens, such as Florida, Arizona, Oregon and South Carolina, are among at least 14 states where the cost of elderly care is rising.5

In Florida alone, 20 percent of the population is over the age of 65; more than 40 percent is over 50. While it’s easy to write this off as the result of Florida being a retirement haven, that is no longer the case. Within about 10 years, the entire country will have a similar demographic composition — we will become “a nation of Floridas.”6

Another problem with the sizable gap between retirees and babies is an anticipated drop in the number of workers. The workforce may not be large enough to support the government programs older people are entitled to after years of contributing into the system. This issue is hardly isolated to America. Between 2025 and 2050, the number of people age 65 and older is projected to nearly double worldwide.7

To help mitigate the drain on resources, many are raising the eligible age for government-sponsored pensions and encouraging people to work well past traditional retirement age. Whether due to lack of retirement savings or the desire to work longer, the share of people working longer has grown during the past decade: a 6 percent increase in Germany, 10 percent in the U.K. and 18 percent in the U.S.8

Content prepared by Kara Stefan Communications.

1 Knowledge@Wharton. Nov. 1, 2017. “Why Emerging Markets Are the Next E-commerce Frontier.” http://knowledge.wharton.upenn.edu/article/why-emerging-markets-are-the-next-e-commerce-frontier/. Accessed Nov. 22, 2017.

2 Ibid.

3 Stephen McBride. World Economic Forum. Sept. 14, 2017. “Retiring baby boomers are going to have a huge impact on the economy.” https://www.weforum.org/agenda/2017/09/retiring-baby-boomers-are-going-to-have-a-huge-impact-on-the-economy. Accessed Nov. 22, 2017.

4 Ibid.

5 Sue Chang. Marketwatch. Nov. 8, 2017. “These maps show just how crazy fast the world is aging.” https://www.marketwatch.com/story/these-maps-show-just-how-crazy-fast-the-world-is-aging-2017-11-08?link=sfmw_tw. Accessed Nov. 22, 2017.

6 Joseph F. Coughlin. Time. Nov. 8, 2017. “There’s No Such Thing As ‘Old Age’ Anymore.” https://www.msn.com/en-us/news/other/theres-no-such-thing-as-old-age-anymore/ar-BBEJG0u. Accessed Nov. 22, 2017.

7 Suzanne Woolley. Bloomberg. Sept. 17, 2017. “Retirement, Delayed.” https://www.bloomberg.com/quicktake/retirement-redesigned?cmpid%253D. Accessed Nov. 22, 2017.

Ibid.

We are an independent firm helping individuals create retirement strategies using a variety of insurance products to custom suit their needs and objectives. This material is intended to provide general information to help you understand basic retirement income strategies and should not be construed as financial advice.

The information contained in this material is believed to be reliable, but accuracy and completeness cannot be guaranteed; it is not intended to be used as the sole basis for financial decisions. If you are unable to access any of the news articles and sources through the links provided in this text, please contact us to request a copy of the desired reference.

What Corporate Citizenship Looks Like Today

The concept of corporate citizenship originally evolved from a responsibility to shareholders for directing the legal, ethical and economic goals of a company. Today, however, there are other factors that help shape a company’s culture and performance.

Now that the unemployment rate is lower, the job market is heating up and employers must compete for the best candidates. Normally that would mean beefing up compensation and benefit packages. However, that may not be enough to entice today’s idealistic young adults.

In fact, a recent survey found that 61 percent of young professionals consider a company’s engagement and reputation for corporate citizenship as part of their job decision. Seventy percent say they are far more likely to choose a company with strong community involvement. It’s not just about making money for millennials, they want their work to mean something and contribute to the greater good.1 Furthermore, millennials aren’t big on hierarchies, having been educated and trained to work in a team environment, and they insist on transparency.2

Bear in mind that millennials change jobs often and, if they’re not finding a work environment they like, they could become competitors to their former employers. According to one report, millennial-owned businesses are posting significantly higher revenue growth than their older counterparts.3

Now that the job market is coming around, this type of pressure to be the company that employees want to be proud of can be a powerful influencer on the corporate mission — and share price. But while there are many factors that tend to influence stock prices these days, most individuals would do well to stick with a long-term investment plan and not try to time trades in the market.4 After all, corporate citizenship is a long-term pursuit, so good companies are likely to perform well over time. Any time that you would like to discuss concerns about your financial strategy, please give us a call.

Today, corporations are at more risk than ever of falling prey to bad public relations due to the power of the “Tweet.” Whether it’s a disgruntled employee or a high-profile celebrity not happy with his service, stock prices can rise or fall on the power of a message on Twitter. On the other hand, a quick company response can cement customer loyalty.5

Another force that may influence corporate citizenship in the coming months and years is Donald Trump. He’s already threatened not to purchase new Air Force One airplanes from Boeing and tossed his weight around with car manufacturers. If the country doesn’t want to increase debt created by tax cuts and infrastructure spending, the private sector may have to step up its game in adopting and supporting local schools, sports and cultural venues that could be impacted  by lower government funding.6 This, however, is a good way for companies to enhance their corporate citizenship.

Content prepared by Kara Stefan Communications

1 David Coons. Insurance Journal. Dec. 19, 2016. “The Corporate Citizenship Mandate.” http://www.insurancejournal.com/magazines/ideaexchange/2016/12/19/435374.htm. Accessed Jan. 17, 2017.

2 Pratik Dholakiya. Entrepreneur. Jan. 17, 2017. “3 Tips for Creating a Millennial-Friendly Workplace.” https://www.entrepreneur.com/article/287201. Accessed Jan. 17, 2017.

3 Shubhomita Bose. Small Business Trends. Jan. 16, 2017. “Yelp Report: Is This the Year of Millennial and Minority-owned Businesses?” https://smallbiztrends.com/2017/01/minority-owned-business-statistics.html. Accessed Jan. 17, 2017.

4 James F. Peltz. Los Angeles Times. Jan. 16, 2017. “When Trump tweets, Wall Street trades — instantly.” http://www.latimes.com/business/la-fi-agenda-trump-tweets-stocks-20170116-story.html. Accessed Jan. 17, 2017.

5 Elizabeth Armstrong Moore. Fox News. Jan. 10, 2017. “After a Twitter Complaint, Elon Musk Makes a Rapid Fix.” http://www.foxnews.com/tech/2017/01/10/after-twitter-complaint-elon-musk-makes-rapid-fix.html. Accessed Jan. 17, 2017.

6 Jennifer Rubin. The Washington Post. Jan. 5, 2017. “How Business Can Survive the Know-Nothing Politics of Populism.” https://www.washingtonpost.com/blogs/right-turn/wp/2017/01/05/how-business-survives-the-know-nothing-politics-of-populism/?utm_term=.0c6ed57a1557. Accessed Jan. 17, 2017.

 We are an independent firm helping individuals create retirement strategies using a variety of insurance and investment products to custom suit their needs and objectives. This material is intended to provide general information to help you understand basic financial planning strategies and should not be construed as financial advice. All investments are subject to risk including the potential loss of principal. No investment strategy can guarantee a profit or protect against loss in periods of declining values. 

The information contained in this material is believed to be reliable, but accuracy and completeness cannot be guaranteed; it is not intended to be used as the sole basis for financial decisions. If you are unable to access any of the news articles and sources through the links provided in this text, please contact us to request a copy of the desired reference.

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The Changing Job Outlook: Challenges and Opportunities

The workforce in the United States is changing. Some long-standing professions are becoming obsolete, there are fewer manufacturing jobs,1 and some companies are moving their headquarters overseas for tax reasons.2 Then there is the increasing phenomenon of automation and robotics replacing jobs.

It’s interesting to note, however, that the job market is not fixed. It’s not as if people are being replaced by robots, but rather that the nature of work is changing and has different requirements. For instance, there is a steady transition from manufacturing to service industries. While a robot may be able to assemble products, it cannot develop software, health insurance policies or other intangible products and services that encompass so much of our income these days.3

As such, today’s job market offers unique opportunities for older workers. While some retirees need to work to supplement their income, others may simply get bored and want a new challenge. After all, retirement can go on for decades. That’s a long time for a career worker to be out of the workforce. By the same token, that’s a long time for savings to provide income. If you’re wondering how long your retirement income savings might last, come see us for an independent analysis. We can help assess your current financial situation to see whether it might be worthwhile to consider other retirement income strategies.

Another aspect of today’s changing job market is the growing shortage of skilled workers.4 When you think about it, this shortage creates an opportunity for retirees who want to go back into the workforce and are willing to learn new skills. According to the World Economic Forum’s 2016 “Future of Jobs” report, 33 percent of the essential skills that will be needed in the workforce in 2020 are not considered important today.5 This may create a good opportunity for people re-entering the workforce.

In fact, it’s because machinery is automating many previous jobs that some experts believe human creativity is the coveted skill of the future. It is the one thing that cannot be replicated by machinery, and thus holds more economic value.6 Pair creativity with experience and knowledge of specific markets and industries, and this is an area where older workers may truly thrive.

The best occupations for retirees tend to be in the white-collar sector and require experience, coupled with the advantages of maturity, patience and wisdom. Some of the top job options for older adults include consulting, local government positions, substitute teaching and tutoring.7

Content prepared by Kara Stefan Communications.

1 Heather Long. CNN Money. March 29, 2016. “U.S. has lost 5 million manufacturing jobs since 2000.” http://money.cnn.com/2016/03/29/news/economy/us-manufacturing-jobs/index.html. Accessed July 13, 2017.

2 The Economist. Aug. 17, 2015. “What’s driving American firms overseas.” https://www.economist.com/blogs/economist-explains/2015/08/economist-explains-9. Accessed July 13, 2017.

3 Alanna Petroff. CNN Tech. March 24, 2017. “U.S. workers face higher risk of being replaced by robots. Here’s why.” http://money.cnn.com/2017/03/24/technology/robots-jobs-us-workers-uk/index.html. Accessed July 13, 2017.

4 Reuters/CNBC. July 20, 2015. “Survey shows growing US shortage of skilled labor.” http://www.cnbc.com/2015/07/20/survey-shows-growing-us-shortage-of-skilled-labor.html. Accessed July 13, 2017.

5 Stephane Kasriel. World Economic Forum. April 25, 2017. “Yes, our working lives are going through massive change, but that doesn’t mean we’re heading for a jobless world.” https://www.weforum.org/agenda/2017/04/as-long-as-we-have-problems-to-solve-we-wont-run-out-of-jobs. Accessed July 5, 2017.

6 Itai Palti. World Economic Forum. April 19, 2017. “Could creativity drive the next industrial revolution?” https://www.weforum.org/agenda/2017/04/why-creativity-will-drive-the-next-industrial-revolution. Accessed July 5, 2017.

7 Jennifer Lawler. Bankrate.com. Feb. 26, 2016. “10 part-time jobs for retirees.” http://www.bankrate.com/retirement/10-part-time-jobs-for-retirees/#slide=3. Accessed July 5, 2017.

We are an independent firm helping individuals create retirement strategies using a variety of insurance products to custom suit their needs and objectives. This material is intended to provide general information to help you understand basic retirement income strategies and should not be construed as financial advice.

The information contained in this material is believed to be reliable, but accuracy and completeness cannot be guaranteed; it is not intended to be used as the sole basis for financial decisions. If you are unable to access any of the news articles and sources through the links provided in this text, please contact us to request a copy of the desired reference.

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The Influence of Work

Work offers a confluence of possibilities, ranging from satisfaction to frustration to, many days, a little of both. If you work during retirement, here’s an interesting revelation: Social Security taxes are deducted from your work paycheck even if you’re already drawing benefits. For a lot of retirees, wages from some type of job represent a significant portion of their retirement income.1

This is a scenario in which you may be able to increase your Social Security benefits even if you started taking them early. If the annual income you earn in retirement is higher than the lowest inflation-adjusted year of earnings factored into your current benefit, a new benefit will be calculated for a higher amount.2

The decision to work or not during retirement is a personal one, based on both financial and lifestyle factors. Please contact us to discuss creating retirement strategies through the use of insurance products that can help you work toward your long-term retirement income goals.

When you’re making the decision about whether to retire, remember you may have more options than you think. Some people may want to work longer either because they could stand to save more or want to keep their brains engaged — or both. However, if they’ve grown tired of their job, they figure they might as well retire. But it doesn’t have to be one or the other. Many people go job hunting because they’re frustrated with their boss or company and no longer feel they get the respect they deserve.3 You can do that too, even if you’re older. If you aren’t ready to retire, consider looking for another job.

If that doesn’t appear to be a feasible option, there are other ways to cope with a job that has you down. People often talk about developing hobbies during retirement to occupy their time, keep their minds engaged and nurture a social network. There’s no reason to wait until retirement. Studies show people experience long-term fulfillment when they commit to an activity for the sake of the activity itself.4 This gives you something to look forward to doing outside work, so that the day-to-day grind is more tolerable. A secondary benefit is that once you do retire, the activity could be waiting for your full-time attention.

Then again, you might be considering quitting your job and working for yourself. To get started, human resources professional Liz Ryan offers the following questions to ask yourself:5

  • What services can I sell?
  • What kinds of problems or challenges can I solve for clients?
  • What is the going rate for my services?
  • How can I explore the possibilities as a new consultant while continuing to work at my job?
  • How can I market my new business?

Content prepared by Kara Stefan Communications.

1 Tom Margenau. Arizona Daily Star. March 23, 2017. “Social Security and you: Working seniors pay taxes and may see benefit increase.” http://tucson.com/business/social-security-and-you-working-seniors-pay-taxes-and-may/article_d12b59db-5376-549c-a628-e7c569db772c.html. Accessed May 19, 2017.

2 Ibid.

3 Liz Ryan. Forbes. March 31, 2017. “The Real Reason Good Employees Quit.” https://www.forbes.com/sites/lizryan/2017/03/31/the-real-reason-good-employees-quit/#4390ea844b4e. Accessed May 19, 2017.

4 Brad Stulberg. New York. March 27, 2017. “Your Job Can’t Be the Only Meaningful Thing in Your Life.” http://nymag.com/scienceofus/article/how-to-find-meaning-outside-of-work.html?mid=twitter_scienceofus. Accessed May 19, 2017.

5 Liz Ryan. Forbes. April 2, 2017. “Full-Time Employment Is Great For Employers – Not So Great For You.” https://www.forbes.com/sites/lizryan/2017/04/02/full-time-employment-is-great-for-employers-not-so-great-for-you/print/. Accessed May 19, 2017.

We are able to provide you with information but not guidance or advice related to Social Security benefits. Our firm is not affiliated with the Social Security Administration or any governmental agency.

We are an independent firm helping individuals create retirement strategies using a variety of insurance products to custom suit their needs and objectives. This material is intended to provide general information to help you understand basic retirement income strategies and should not be construed as financial advice.

The information contained in this material is believed to be reliable, but accuracy and completeness cannot be guaranteed; it is not intended to be used as the sole basis for financial decisions. If you are unable to access any of the news articles and sources through the links provided in this text, please contact us to request a copy of the desired reference.

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