Boomers + Economy: Doesn't Need to = Panic…

Yes my fellow Boomers…you’re hearing it everywhere; our current state of economic affairs are ABSOLUTELY DEVASTATING for us as we head toward our much anticipated retirement days in the sun.  Here’s an example (contracted) from US News and World Report:

3 Ways the Economic Crisis Is Destroying Baby Boomer Retirement

  1. Stock Market declines: During the past 12 months, retirement accounts have lost $1.6 trillion or 18.3 percent of their value, according to Urban Institute
  2. Falling Home prices: The average home price fell 3.9 percent from January 2007 to May 2008, according to the Office of Federal Housing Enterprise Oversight
  3. Decreasing Job markets: Contracting credit markets could weaken the labor market, thus limiting employment opportunities for older adults

And although the writer of this USNWR article does provide ideas for how to offset today’s admittedly troubling economic conditions, many others do not, staying firm on the newspaper-selling, google-search-engine attracting, dire news, all of which can understandably make a Boomer feel…well, panicky.

Don’t.

Here’s why, issue by issue.

Stock Market Declines

Will the recovery from this mess take years?  As Sarah would say, “you betcha!” 

But the operative word is “recovery”.  We do, in fact, have a few years to hold on and wait out this inevitable, years-in-the-making, needed correction to our (and our nation’s) overspending, under-saving, and the massive, voter permitted deregulation of an industry that has proven itself at least 2 other times in the past 30 years of being incapable of controlling itself (but immensely capable of poor decision-making and business practices founded in greed).

Panic, sell off your stocks, and you create precisely the situation you fear; a self-fulfilling prophesy.  My guess is that all of us were smart enough to have generally diverse portolios.  This economic situation is why we have such diversity, so trust it.  Selling your stocks will just make your situation worse (because it will take the market into a greater downspin), and has no upside (because you’re selling at such a huge loss).  Worst case scenario, you will have to work an extra year or two to compensate for the losses your portfolio is experiencing right now.  But your investments will come back.  If you don’t panic and crash the system.

Working

OMG, as our kids would text-speak, there is plenty of work for us right now!  Whether you’re recently laid off (due to the economy…) or seeking your retirement second career a little sooner than you’d originally budgeted for, there are “recession-proof” industries/jobs that will snap up a Boomer with our experience and background, in the proverbial heart-beat!

This from the Miami Examiner’s Baby Boomer Expert (Paul Briand):

Uncle Sam to Baby Boomers: I want you

The last time some Uncle Sam needed some Baby Boomers was during the Vietnam War … as soldiers.

Now, according to a new partnership, there is need anew … as workers.

The Partnership for Public Service has started the FedExperience pilot program with federal agencies, corporate partners, and other stakeholders to match government’s critical hiring needs with the talents of experienced, older workers.

The partnership sees a win-win relationship between the government and older workers.

I’ll add to that a list of other, Boomer friendly and recession-proof jobs available right now:

  • Mechanical and Electical Engineer
  • Sales Executive
  • Technology Executive (for those of you with or able to get quickly get your Computer Science degree)
  • Customer Support/Management
  • Database Administration
  • Product and Project Management
  • Testing/QA
  • Financial staff at every level (from Finance execs, to accountants and bookkeepers)
  • Business Analysis & Development
  • Adminstrative/Executive Assistant
  • Nursing/PA/NP

And yes, you may have to put off for a little while your dreams of business ownership, but there’s no need to throw out that dream.  Just postpone it perhaps for a year or two.  That said, if you do want to go for it now, sign up for my free report Forbes 9 Best Boomer Markets: http://tinyurl.com/3rlrpe

Retiring

Is your house worth less right now?  It is.  But the housing market is already reaching its bottoming-out point and will rebound in less than one year.  So just hang in there a little longer before you take that reverse mortgage or consider moving.

Will you have to revamp your retirement timeline or plans?  Perhaps, but again, our retirement is hardly IN RUINS!!!  It is on hold for a while, or will look differently than we’d hoped for a while.

Ultimately, Boomers, this is not a catastrophe; it is a major but temporary inconvenience.  It is scarey, but not fearsome.  We will not all be living a new millennial version of The Grapes of Wrath; we will be living a little leaner, which isn’t a bad thing anyway, really.

We’re going to be fine.  But not if we panic.

This Boomer's Idea of the Perfect Bail-out Package

The sky is falling, the sky is falling!!!!

 

Or, more accurately:

 

The stock market’s crashing, the economy’s tanking!!!

 

The former, I think, is true only in that as we continue to pull lots of carbons out of the ground and spew them into the air, the sky falls ever closer to levels of damage beyond repair in this century.

 

The latter, I think, is more a matter of melodramatic, histrionic thinking seeded by failed but still very powerful bankers/corporations who don’t want to be held fully accountable for their bad behavior and exceptionally poor business practices like they will be if they have to handle this all by their weeny little selves.   They know that a “bail-out” will save their beautifully-clad asses and shield them from losing their personal shirts. 

 

They also know that the alternative will NOT cause the economy to collapse albeit the process won’t be pretty, for sure, but WILL force them to face and deal with the collossal pig-sty they created (my apologies to pigs…), with all the lost compensation that goes with it.  Over 200 very credible, highly regarded economists and scholars agree: this mess might get a little ugly, but will work itself out without one penny of government “bailing” money.

 

Finally, they are banking on (pun intended) the demonstrated m.o. of Americans these days, led by we Boomers (and unlike our parents); that we are not much for sacrifice on any level, are driven by the need for immediate gratification regardless of its long-term consequences, and therefore we will fall for anything that will keep us from the pain associated with atoning for our own glaring mistakes (making unabashedly bad if not somewhat greedy decisions to take on mortgages we couldn’t afford, with incomes that didn’t warrant the amount we borrowed, gambling on a big pay-off in a few short years as though our homes were a mini Vegas….).

 

Are they right?  Well, so far, they’ve completely underestimated the American public.  One point for us!

 

But the “bail-out” package is still worming it’s way through Congress (having at this writing won support in the Senate and now on its way to the House), and given Congress’ indebtedness to the bail-outees, will most likely pass.  One point for the bankers.

 

So, given that we Americans have a poor track record of holding our representatives closely accountable for their actions/lack thereof, an equally poor propensity for voting at all let alone voting anyone out of office for glaringly self-promoting performances, and our representatives’ certainty of this, what we want at this point really doesn’t matter. 

 

I guess you know that by now, given that an overwhelming majority of Americans are against the bail-out and it’s going to happen anyway.  Congress’ justification: we’re just too uninformed (read stupid) to know what’s really best for ourselves…and I have to admit they have a point as it relates to who we’ve chosen through our own apathy as our government leaders….  But they’re more than willing to accept our exceptional thinking prowess when we do vote and cast one for them, so I guess that’s where our brain power really lies…(?!)

 

Anyway, back to the bail-out.  Since it will happen, here’s a list of revisions to the provisions that I recommend Boomers insist upon when (and I hope it won’t be “if”) you call your Congressman today and tomorrow morning:

  • The amount not be a flat $700B with a phase-in component ( we know from experience that they will spend it all, and more…), but instead be authorized for only the first “phase in” amount of $250B: anything thereafter must be subject to Congressional vote, just like this was;
  • The “requirement that the Treasury Dept. make rules to prevent excess executive compensation” have a specific time-line by which that report will be due; the same goes for the President’s “established plan to recoup the cost from the financial industry if, after five years, there are any losses”;
  • “Cap deductibility of executive’s pay packagesfor firms that get $300M or more from the program…”?! I DON’T THINK SO….  Cap executive compensation period, at $500K for firms who get any bail-out money whatsoever
  • Oh, and the whole idea of raising the FDIC guarantee amount to $250,000 from the current $100K?  That is simply a ploy to get some folks to vote for this package.  It is not something that will ultimately benefit any more than 5% of Americans (personal or business), and it will simply increase what we’ll have to “bail out” when banks behave badly again…and I promise you, without serious regulation/oversight, they will – their historical track record proves it.  Eliminate this provision;
  • As for the ever-present and quite predictable throwing-in of all sorts of items that have nothing to do with the activity of “bailing” – inasmuch as I agree with most of them, particularly insurance coverage parity for mental illesses to physical ones, and tax breaks for clean, home-grown energy alternatives, they have no business in this bill and need to be handled separately, where they belong.

Well, that’s it, guidance from your Boomer Coach, whose job it is to provide you with all the relevant information you need to make a fully informed decision, do the research/compile the facts to that end, and be completely honest with you even when some of that feed-back isn’t a happy meal.

 

I’m Terri Benincasa, and I wrote this message.