The Next Four Years Forecasted
With President Obama’s recent Inauguration for a second four year term, one of my columns published November 8, 2004, titled “The Next Four Years Forecasted” seemed especially relevant. Most predictions still work today although government employment and benefits are not as secure and the ongoing turnkey services movement has been slower than expected. Here is the 2004 column.
“My family history seems especially well suited to the next four years. My real Grandfather Jones was an amateur magician, a pharmacist, and a small business owner. Considering that we will need to predict the future, to work magic with the American health care system, and to keep America rolling, the family legacy seems well attuned to the task.
Here are some predictions regarding what is likely to happen and what should happen over the next four years.
Prediction #1. Americans will experience greater independence and make more choices as we search for creative answers to financial and health care issues. If we have not figured this yet, we should realize soon that the days of working at one job with one company for life and retiring with a predictable benefits package are all but gone. Small businesses create the major share of new employment opportunities. They need to be flexible and, as a result, they expect flexibility from their employees. Actually, of all retirees with whom I deal the one group most likely to have a predictable work history and benefits package are government retirees.
What we should do for current employees is to offer programs that explain in plain English what benefits are available to them while employed and when retired, how long benefits are guaranteed, if at all, and what options are offered if the original programs do not work.
Individual responsibility is going to have to fill in the gaps. This means that Americans are going to have to become much more sophisticated in the long run regarding their payment arrangements, retirement funds, health care benefits, and overall compensation packages. In a way, we are on the fast track to becoming our own watchdogs and ombudsmen. Even if we are employees, we will be watching our own individual “shop” and caring for ourselves. The self employed over time will have to become especially perceptive and resourceful to ensure both their corporate and personal survival.
Prediction #2. American consumers will shift loyalties from traditional financial institutions and advisors, remaining only with those that justify their trust. While watching our own shop, Americans have come to realize that not all of the advisors that handled their savings have been equally trustworthy. In the worst days as major investment accounts tumbled, many brokers and advisors continued to recommend stocks that they acknowledged privately were next to worthless. While the market generally may not remember these experiences, individual consumers do.
Americans are searching for people they can trust. They want to know that the investment advisors handling their accounts will consider their clients’ interests, not just their own. Americans want to know whether a move is risky and, if so, how much before they make a decision. They want advisors that will report regularly on a personal basis to advise when a shift should be made to different types of investments and why.
One of the factors working against this type of independent advice, frankly, is the compensation system. When an advisor receives substantially more compensation for placing a variable annuity for a 90 year old, for instance, tying up her investment for 7 years or more, than he does for simply rolling over her CD’s, then there is strong potential for financial abuse.
In the future, consumers might wisely consider paying more, maybe even significantly more, for fee based advice over commissions so that they can receive independent judgments.
Prediction #3. The future will see more “turnkey” services to handle needs of individual consumers and businesses. Turnkey services are one-stop shopping. In health care, for instance, I expect new service providers to be formed to review all potential health insurance policies and prescription coverages and make recommendations which ones would best serve an individual’s requirements. Our office at Life Transition Services, LLC, now handles all the services associated with a move to assisted living or to skilled nursing care. Americans do not have the time, the energy, or the desire to know everything themselves so they can contract for some of these services instead. In the meanwhile, everyone from grade school and beyond should begin to learn more about financial planning and resources.”
For more, listen to “50+ Planning Ahead” a weekly radio program on WCHE 1520 on every Wednesday from 4:30 pm to 5:00 pm with Janet Colliton, Colliton Law Assocs., PC, and Phil McFadden of Home Instead Senior Care.
About the Author Janet Colliton
Esquire, Colliton Law Associates, P.C. Janet Colliton has practiced law for over 38 years, 37 of them in Chester County, Pennsylvania, a suburb of Philadelphia. Her practice, Colliton Law Associates, PC, is limited to elder law, Medicaid, including advice, applications and appeals, and other benefits planning including Veterans benefits, life care and special needs planning, guardianships, retirement, and estate planning and administration.