Depression Era Advice That Pays In A Pandemic: Lesson Three
Lesson Three: Start Planning Ahead
If you’re thinking ahead, good. If not, right now is a great time to start.
Can we improve our current financial situation by studying the past? Let’s take a look.
For many folks during the Great Depression, there was no concept of retirement. In fact, 63 percent of men between the ages of 65 and 74 were still in the labor force.
With the stock market crash of 1929 even people who had saved carefully for their old age saw those savings disappear. If all their savings were in the stock market or banks, they all too often had nothing. To acquire basic food and shelter people of all ages had no choice but to work—if they were fortunate enough to find any kind of employment, under difficult conditions, for low wages—until they were physically unable to continue.
Necessity created what today we call a “gig economy.” Many people learned to look at capabilities and talents they had never monetized before as ways to meet their financial needs. Farmers hunted rabbits, which their wives cooked and canned. This not only added to their own food supplies, but they were able to sell the excess to get money to cover other expenses. Housewives baked pies or prepared lunches to sell to working construction laborers and railroad men. People became incredibly ingenious and creative in turning their skills into supplying what others who had a few extra coins in their pocket were willing to pay for.
Today’s pandemic is creating intense pressure and insecurity in the workforce, and the chances of being out of work are increasing. Many two-income families are now down to one income. People are taking pay cuts and the gig economy, once fun and fashionable as a side hobby or source of fun money, is becoming a primary source of income for many people once again.
The situation with regard to planning for the future is worrisome today as well. Social Security doesn’t go that far. And, while it was never intended to cover all the costs of retirement, people tend to think it will go farther than it can. Let’s look into your future with a dose of reality. If you were an average senior in 2019 you would have received only $17,532 in Social Security benefits. To maintain a pre-retirement standard of living, more income has to come from somewhere. And the age for full participation in Social Security benefits is getting later and later.
Whatever your situation, the plan you put together before the pandemic might not be adequate for today’s needs. So why not use the pandemic as a reminder to get up-to-date investment planning and advice—and review your plans so you can feel best prepared if your current situation changes?
Let’s schedule an hour to talk about your financial strengths and weaknesses right now. Not sure how to start? As Eleanor Roosevelt pointed out, “It takes as much energy to wish as it does to plan.” Let’s use our energy wisely. Together we can sit down, map out a plan based on your current situation, and make sure you are as well prepared for the future as you can be, whatever it may be.