With what has been happening in the markets and the world recently, you may have asked yourself, “Should I be concerned?” or “How should I be thinking about my money right now?” And that’s not a bad thing. Creating a sound financial plan for retirement requires imagining what could go wrong. And those fears are not necessarily unfounded—96% of Americans will experience four or more major “income shocks” by the time they turn 70, according to Billy Hensley, president and CEO of the National Endowment for Financial Education (NEFE).

Inflation, interest rates, federal monetary policy and geopolitical events all affect the market and how other investors react to it. These recent events have forced us to pause, reflect on our financial goals and consider how we want to live day-to-day life as we eye a fulfilling retirement.

The bottom line: it’s about ongoing planning, not a single, or static, plan. The act of sitting down with your family or financial professional and asking important questions can prepare you for the next chapter of your life. And the two key considerations that will help you plan for that next chapter? Resilience and flexibility in the face of uncertainty. With those considerations in mind, here’s what individuals can do to stay confident amid the biggest challenges affecting financial planning today.

Inflation
Eric Winograd, AllianceBernstein’s senior vice president and director of developed market economic research, has the following thoughts on inflation.

“It is true that the dominant driver of the inflation spike remains goods prices, which are elevated largely because of COVID-related disruptions. Durable goods prices are up almost 20 percent year-over-year, and non-durable goods prices roughly 13 percent year-over-year.

That is a very dramatic change from the pre-COVID environment in which goods prices made essentially no contribution to inflation for roughly two decades. But over the past few months, services inflation has risen too—that means that inflationary pressures are likely to be with us for longer and to be harder to bring back under control. The Fed has already started that process by raising rates last month, and we expect more hikes in the coming months. Over time that will slow demand and contribute to inflation coming back down, but it is going to take time. 

To sum it all up: The Fed has pivoted fast and hard, and the next few months are going to be a steady march toward tighter monetary policy unless inflation woes resolve swiftly.  In that case, the march will be more of a sprint, and individuals will need to look to different types of investment solutions to achieve their goals in this environment.”

Structural Shifts
Clicking on the current picture and zooming out even further, we must address how structural shifts are changing behaviors.

Folks currently lack the security of a defined benefit plan, underscoring the need for guaranteed income strategies, increased participant education and smart plan design that mirrors the safety of defined benefit plans.

In a workplace retirement plan, this can take the form of including auto-enrollment for new employees, auto-escalation of contributions annually (or with pay increases), and, with the introduction of the SECURE Act and the movement of SECURE 2.0 in Congress, the addition of in-plan guaranteed lifetime income strategies. These would help ensure people are actively saving and investing for their retirement and that they are guaranteed at least some income when they get there.

Individuals can also look at protection as part of their ongoing financial planning — buffering against potential shocks from market volatility that may return without sacrificing growth opportunities and ensuring that loved ones are taken care of in the future.

Changing Behaviors Amid The ‘Great Resignation’
At the same time, dislocation is driving Americans to seek advice and new strategies to help them face the future with confidence.

According to The Labor Department’s Job Openings and Labor Turnover Survey, “The Great Resignation” or “Great Reimagination” is still in full swing heading into the summer.

At the same time, 78% of respondents to a survey from Uprise Health said their mental health had been affected by the pandemic, the top driver for that being that they felt overloaded with work.

But as workers start looking toward greener pastures, they should also consider portable—meaning not tied to a single employer—strategies to bolster their financial well-being and provide for that of their loved ones. These go beyond a 401(k) plan. For example, life and disability income insurance can protect family members in the case of death or disability, respectively. Or, in the case of cash value life insurance and its death benefit protection, provide another tax advantaged way to accumulate wealth independent from an employer if a professional has set out on their own or has taken a role at a new company.

The Way Forward
The only certainty is that people are expecting more volatility going forward, because there are so many unknowns right now, from geopolitical issues to their own health. Recognizing this unpredictability in life and the markets is critical in financial planning. Any financial plan must have built in resiliency to help weather potential shocks to their financial lives, like career changes, economic changes, or more.

Today, a majority of consumers are not satisfied with the financial advice they’re getting, and 72% agree it is very or extremely beneficial for financial services companies to address needs beyond just finances (Source: 2020 HLP Research Compendium). We acknowledge that every person has a unique and full life with different goals and priorities, and building a holistic plan to meet those unique goals is critical to achieving financial well-being in these uncertain times. From those building their careers, to those thinking seriously about retirement and those entering or in their early retirement years, we are focused on meeting them where they are.

Going forward, financial professionals must place even more focus on having an open dialogue during client reviews so they can become more attune to the special challenges we are all facing today. Doing so, they will be able to better understand the strategies needed to help clients stay resilient and flexible in the face of personal or economic challenges. Taking a holistic and active approach to financial planning can help people create resilient portfolios that support them in creating not just the portfolio—but the life—of their dreams.

Nick Lane is president of Equitable.