When it comes to investing, it’s rarely a good idea to jump on a trend. But we do see certain trends in financial planning surface from time to time, and it can benefit you to understand them. Here are five trends to be aware of in today’s market.
1. Older people are working longer.
According to the American Association of Retired Persons, by 2022, the number of American workers age 50 or older is due to increase by 62%. They will consist of 35% of our workforce. Don’t automatically assume that won’t be you.
2. Increased longevity demands more financial planning.
According to the Social Security Administration, the average life expectancy of a man who is currently 65 years old is 84.3. For a woman who has reached age 65, her life expectancy is 86.7. That means ensuring you don’t outlive your portfolio is more challenging than ever.
3. Second marriages require more estate planning.
The American Psychological Association reports that 40% to 50% of married couples in the United States divorce, and many remarry. As a result, more of us must balance the legacy we leave our children with the needs of our new spouse.
4. Financial technology doesn’t replace the financial planner.
Technology plays an increasing role in managing financial tasks, from tracking spending to helping with investments. Certainly, take advantage of these innovations. But remember, a computer can’t replace the knowledge of your individual financial circumstances that a personal financial planner possesses. Don’t miss out on everything your financial professional has to offer by relying solely on tech to manage your portfolio.
5. Tax cuts create opportunities.
The Tax Cuts and Jobs Act brought sweeping changes to our tax laws in 2018. Tax brackets declined, alternative minimum tax exemptions increased, and a new 20% deduction for pass-through business income was revealed. Learn to make the most of these opportunities.