While many older clients may remember the inflation crises of 40 years ago, their financial priorities are quite different today. These clients may want to consider solutions that help lower exposure to inflation risk and protect their income during volatile periods like we’re experiencing today. Annuities may be a good solution for those who still need to participate in market gains but value a measure of downside protection.
Younger clients haven’t had the experience of inflation to draw lessons from, so many millennials and Gen Z clients could use different advice. Stress the importance of investing over the long-term and consider other solutions that can help them make their income go further and build savings for the life events that truly matter to them.
For clients of all ages, remind them that inflation is why we invest. The stock market can help investors keep up with inflation and build wealth over time. From 1914 to 2022, U.S. inflation has averaged 3.25% annually. The S&P 500 Index, on the other hand, has had an average annual return of 10.49% from 1926 through 2021. By staying invested over the long term, clients aren’t just keeping up with inflation, they’re building wealth.
Whether you’re helping an older client prepare for or live in retirement, or working through solutions with younger clients that will set them up for the long-term, these conversations will strengthen your relationships and help your clients feel more confident and in control during periods of inflation.
Eric Henderson is president of Nationwide Annuity.