The recent resurgence topic of inflation has frustrated business leaders, politicians, and most of all consumers.
Retirees, or those planning to retire, are no different. They are arguably impacted even more than those that can get a raise or find a better-paying job. Fixed incomes are hit hardest by inflation, which is why retirees get justifiably worried when prices increase.
Inflation takes a toll on more than just one’s pocketbook. Health and well-being are always impacted when prices rise, adding to the already ballooned cost of healthcare. Price increases driven by de-globalization, which could well lead to a continuation of price rises over the coming years forces people to choose between essentials and everything else. This can have a major impact on health as people tend to adopt cheaper, and ultimately poorer eating habits, along with foregoing expenses that help them live a healthy lifestyle.
How You Can Help Your Clients
While you’re likely not a nutritionist, it is important to recognize the correlation between health now and longevity in the future. If your clients have opted to utilize HALO by Genivity, they may know what health issues they are predisposed to. Encouraging them to not cut back on essentials that promote longevity now just because they’re expensive, will benefit them in the future.
It’s not just benefiting their health in the future; it very well may benefit their finances as well. The old adage, “An ounce of prevention is worth a pound of cure” is particularly relevant. Staying on top of health problems or staying ahead of potential problems will be far cheaper than trying to rectify them when inflation has compounded.
Baking inflation into your calculations for the future is important. Encouraging healthy lifestyles, likewise, helps offset said inflation so that your clients can free their capital to do things they want instead of the things they need.
HALO can also help your clients determine how many healthy and active years they have to look forward to. While inflation will certainly raise the prices of travel, food, and the like, it doesn’t have to impact meaningful things, like time with family. These core motives are what drive people to optimize their retirement. Gently reminding your clients that these are times to look forward to and that their health is paramount in seeing them come to fruition, may help them refocus their lifestyles to achieve these goals.
The most important thing you can do to help your clients set themselves up for success in the future is to be realistic about their longevity, build guardrails for them with that data, and be conservative about costs.
Fabrice Braunrot, a former Vice Chairman at JP Morgan Private Bank, thinks that it’s important for advisors to “look forward rather than rely on history alone. If you rely on past spending patterns, prices, and market returns instead of considering what might happen in the future, it could be disastrous for your clients.”
Anyone who’s gone on a diet or tried to keep an exercise plan knows that starting is the hardest part. Heading into retirement with the momentum of a healthy lifestyle will have an easier time maintaining their health, particularly if they know that they have a health issue they are predisposed to. The inflation of today shouldn’t punish the sunset years of tomorrow.
HALO from Genivity can help your clients get an idea of what they can expect from their health in the coming years and how to plan for it. It’s your job to ensure that they know the risks of sacrificing money today for time tomorrow.