Boomers – What will You do if the Economy Goes Belly Up?

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If you are a Baby Boomer, you have to be worried about the economy. With trade wars, rising national debt and interest rate increases, it could take a nose dive within the next twelve months. Are you prepared for this? Have you taken steps to survive what could be a dramatic economic downturn?

I am not an economic advisor, but as someone who (like many of you) suffered devastating losses in the 2008 Great Recession, here are some commonsense steps to think about:

  • Protect your Savings. Make sure your 401K, stocks, mutual funds, etc., are diversified. Move funds to less risky alternatives, like T-Blls and municipal bonds. Consider getting out of the stock market.
  • Real Estate Equity will Evaporate! Those of us who suddenly found ourselves upside down on home equity in 2008 know all too well how quickly real estate values can fall when interest rates climb, stocks crash and people lose jobs. So, if you are thinking about selling your home, vacation home or investment property, or getting a reverse mortgage,  DO IT NOW!
  • Prepare a Fall-Back Budget. Most Boomers don’t have a large reserve fund. We suggest having a fall-back plan to trim monthly expenses. Ask yourself, “How can we survive if inflation soars or our monthly income decreases by 30 percent?” What can you do without? What can be trimmed and how quickly?

Some of you may feel this warning is unwarranted or premature. Frankly, I hope you are right. But those of us who have been there before, along with more and more leading economists, sense a coming reckoning.

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