As financial planners, you have a unique perspective on inflation. It doesn’t just affect the here and now, but it impacts the future of your clients’ money and what they may, or may not, be able to accomplish in retirement.
At Genivity, we take a differentiated view through the lens of longevity. We are constantly monitoring changing economic conditions and how that may impact health and ultimately the cost of living longer.
While planning early with your clients is important, so is the sophistication of those plans and your planning and goal setting over time. It’s much like thinking about using a boat to get from one shore to the next. You have to start by building the boat. That’s your initial financial plan. But from there, you have to keep adjusting things to ensure it will get your clients where they want to go.
How Inflation Affects Health
The most obvious things to be impacted by inflation are medicine and care. If your client’s HALO assessment has come back with positive indications for longevity, then it’s time to consider planning for long-term care. We can predict, to a degree, what those costs will be in the future, but with inflation being what it is, it may be better to take a more conservative approach and over budget for that care rather than the inverse.
The same with medicine. No one knows exactly what the cost of pharmaceuticals will be into the future, however, if genetic testing has you predisposed to needing a certain drug, then it’s best to take a grim view of the costs.
If we keep with the boat analogy, this is where you would determine if the boat you built is big enough to carry your clients to shore. Have you considered inflation and rising costs? Does the boat need to be a little bigger than you initially planned?
The Cost of Medicine and How to Plan
There are drugs on the market today that can cost well over $50 a pill and need to be taken daily or twice daily. These are marvels of pharmaceutical engineering but have a hefty price tag. These drugs could very well be needed in the future for your clients and it shouldn’t surprise anyone to see prices double or triple.
How does this affect other plans? Vacations, inheritance, donations, and simply living a comfortable life? These are hard decisions to make and conversations to have, but the inflation of today should be a wake-up call to what the future could hold.
This is where you test your boat to make sure it’s ready for the trip. Have you stress-tested the plan? Has anyone made sure there aren’t any leaks?
HALO from Genivity can help give you and your clients a glimpse into the future. Knowing the likelihood of living to what age and what health issues your clients may be predisposed to empower you and your clients to make decisions about how to handle future finances, today.
If your clients are concerned, you need to remind them that the future isn’t certain, but now is the time to plan. If they can add more to their accounts or secure extra income today, it will help them be prepared for a much more expensive tomorrow. Get their boat ready for the long journey today.