Investor Forecast: 5 Key Trends Shaping Your Financial Future

Presented By Gainbridge

Given the current fluctuations in the markets, often amplified by the media, some investors are approaching their financial goals with uncertainty. Boomers and Gen-Xers are still bouncing back from a recession and may not be as likely as Millennials and Gen-Zers to put financial technology to the test, while younger generations may be too willing to bet it all on innovation.

To make smart financial decisions with confidence, investors need to be aware of the macro trends that will impact their financial lives, like increased longevity, continued volatility, new tax codes, low interest rates and advancements in technology. Read on for how these factors will affect each generation’s savings differently—and how investors can make each one work for them.



Americans of all generations have internalized that after four decades of hard work, retirement awaits. In the Employee Benefit Research Institute’s 2019 Retirement Confidence Survey, 32% of workers said they expected to retire by 64, with another 22% planning to retire at the traditional retirement age of 65.  

What most Americans don’t realize is that the mid-60s retirement age was established back in the 1930s when life expectancies were shorter than they are today. In addition, many people make the error of not considering retirement from the couple’s perspective. For traditional households with male-female couples, the chance of one partner making it to age 90 is about 45%. Couples consisting of two males have a 35% chance of that happening, and couples with two females have a 53% chance. 


The data on longevity trends reveal an important reality: Women live longer and thus carry more longevity risk.

In the past, the standard financial planning analysis used to stress test one’s finances typically used the age 85 or 90 as an end point. However, that is shifting, and currently 100 is a better age to use. Further, younger generations whose parents will be living significantly longer should factor in the potential that they may still incur parental care expenses well into their 70s.



With trade wars and political turbulence that can be set off by a single tweet, the market is facing significant volatility. Rather than succumbing to the stress, investors stand to benefit by focusing on strategy during challenging times.

While most economists forecast a recession in the next 18-24 months, Gen-X, Millennials and Gen-Z should treat these investment challenges as noise, since they are in the accumulation phase of their portfolios. Market volatility is actually a benefit to them over the long term as it could potentially give them more entry points.

Rather than trying to time the market, they should plan consistent buying on a monthly or quarterly basis. This “dollar cost averaging” approach may not be exciting, but the truth is that the best investing strategies are often boring.

Boomers, on the other hand, should tackle volatility risk head on—especially those in or nearing retirement. One of the best approaches is the “two bucket” strategy. The first bucket is a “cash bucket,” with three to five years’ worth of expenses in cash or CDs—often a laddered CD approach. With this ability to manage short term, the other bucket, the “investment bucket” can remain allocated to the capital markets.


The Tax Cuts and Jobs Act of 2017 (TCJA) has created a great deal of mythology about who really benefits from the tax code changes. The loss of the full state and local tax (SALT) deduction has increased taxes mainly in states in the Northeast and the West, while strengthening the appeal of states with no individual income taxes, such as Florida, Texas and Nevada. For individuals who cannot move while still working, the discussion of where to retire has intensified, with more high earners considering a move in retirement. 



While older generations are considering moves, the change in the tax code has also impacted younger generations’ motivations to buy homes. As 88% of Americans are now taking the standard deduction, long-standing home-buying tax incentives like mortgage and real estate tax deductions have lost some of their power. Moreover, Millennials and their younger Gen-Z counterparts seem to be thinking twice about putting down roots in states with the highest tax and housing costs.

Between July 2017-July 2018 Nevada, Idaho and Utah had the highest overall population growth rates of any U.S. states, while New York state lost population.

Ultimately the TCJA’s legacy might be a change to the demographics of the country.



Interest rates are creating unique issues for each generation. Many Boomers thought the high interest rates of decades ago would carry them through retirement from an income standpoint. But today, Boomers are stretching and straining for yield. Simply having a municipal or corporate bond ladder of varying maturities may not be enough to generate adequate income. That’s cause for concern because, as a result, Boomers have been taking on more risk in their portfolios. For most of 2019, for example, high yield or so-called junk bond funds have seen significant inflows.


But as Warren Buffett famously warned about risk-takers, “You only find out who is swimming naked when the tide goes out.” Instead of speculating in risky bonds, those in their 50s and older need to focus on quality in their search for income. Options include highly rated dividend stock funds and bond funds that invest in higher credit sectors while still providing a reasonable yield.

In comparison, many Millennials and Gen-Z-ers have become accustomed to living in a low-rate environment. Only in the past five years have Millennials become a serious force in the housing market. But what they are looking for in homes is very different from what previous generations looked for. They want smaller homes more in line to their lifestyles, with access to open spaces, hiking trails and larger yards. However, these low rates may not last forever. 


Over the past decade, technology has changed the playing field for investors in ways ranging from a near elimination of fees on some funds to the ability to effortlessly create smart, diversified portfolios. But while this is now a market in the throes of disruption, it’s becoming clear that smart financial planning requires a new, deeper level of engagement.

Financial innovation can enhance results by helping people identify their goals and values. As financial technology evolves, we can expect to see two primary impacts. First, more firms will begin using AI tools, like chatbots and virtual assistants, to coach clients and provide greater access. But investors who use these tools only to hear their daily balances could actually undo their planning.

That’s where the second area of technology will be key. Financial technology, enhanced by machine learning, will provide greater focus on behavioral patterns, helping investors accurately gauge their capacity for risk, even before they invest their first dollar in the market. If the technology can help investors understand how they will react in certain markets, it may also keep them from making the kinds of mistakes that can turn a bright financial future bleak with a few key strokes.

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Given the current fluctuations in the markets, often amplified by the media, some investors are approaching their financial goals with uncertainty. Boomers and Gen-Xers are still bouncing back from a recession and may not be as likely as Millennials and Gen-Zers to put financial technology to the test, while younger generations may be too willing to bet it all on innovation.

To make smart financial decisions with confidence, investors need to be aware of the macro trends that will impact their financial lives, like increased longevity, continued volatility, new tax codes, low interest rates and advancements in technology. Read on for how these factors will affect each generation’s savings differently—and how investors can make each one work for them.



Americans of all generations have internalized that after four decades of hard work, retirement awaits. In the Employee Benefit Research Institute’s 2019 Retirement Confidence Survey, 32% of workers said they expected to retire by 64, with another 22% planning to retire at the traditional retirement age of 65.  

What most Americans don’t realize is that the mid-60s retirement age was established back in the 1930s when life expectancies were shorter than they are today. In addition, many people make the error of not considering retirement from the couple’s perspective. For traditional households with male-female couples, the chance of one partner making it to age 90 is about 45%. Couples consisting of two males have a 35% chance of that happening, and couples with two females have a 53% chance. 


The data on longevity trends reveal an important reality: Women live longer and thus carry more longevity risk.

In the past, the standard financial planning analysis used to stress test one’s finances typically used the age 85 or 90 as an end point. However, that is shifting, and currently 100 is a better age to use. Further, younger generations whose parents will be living significantly longer should factor in the potential that they may still incur parental care expenses well into their 70s.



With trade wars and political turbulence that can be set off by a single tweet, the market is facing significant volatility. Rather than succumbing to the stress, investors stand to benefit by focusing on strategy during challenging times.

While most economists forecast a recession in the next 18-24 months, Gen-X, Millennials and Gen-Z should treat these investment challenges as noise, since they are in the accumulation phase of their portfolios. Market volatility is actually a benefit to them over the long term as it could potentially give them more entry points.

Rather than trying to time the market, they should plan consistent buying on a monthly or quarterly basis. This “dollar cost averaging” approach may not be exciting, but the truth is that the best investing strategies are often boring.

Boomers, on the other hand, should tackle volatility risk head on—especially those in or nearing retirement. One of the best approaches is the “two bucket” strategy. The first bucket is a “cash bucket,” with three to five years’ worth of expenses in cash or CDs—often a laddered CD approach. With this ability to manage short term, the other bucket, the “investment bucket” can remain allocated to the capital markets.


The Tax Cuts and Jobs Act of 2017 (TCJA) has created a great deal of mythology about who really benefits from the tax code changes. The loss of the full state and local tax (SALT) deduction has increased taxes mainly in states in the Northeast and the West, while strengthening the appeal of states with no individual income taxes, such as Florida, Texas and Nevada. For individuals who cannot move while still working, the discussion of where to retire has intensified, with more high earners considering a move in retirement. 



While older generations are considering moves, the change in the tax code has also impacted younger generations’ motivations to buy homes. As 88% of Americans are now taking the standard deduction, long-standing home-buying tax incentives like mortgage and real estate tax deductions have lost some of their power. Moreover, Millennials and their younger Gen-Z counterparts seem to be thinking twice about putting down roots in states with the highest tax and housing costs.

Between July 2017-July 2018 Nevada, Idaho and Utah had the highest overall population growth rates of any U.S. states, while New York state lost population.

Ultimately the TCJA’s legacy might be a change to the demographics of the country.



Interest rates are creating unique issues for each generation. Many Boomers thought the high interest rates of decades ago would carry them through retirement from an income standpoint. But today, Boomers are stretching and straining for yield. Simply having a municipal or corporate bond ladder of varying maturities may not be enough to generate adequate income. That’s cause for concern because, as a result, Boomers have been taking on more risk in their portfolios. For most of 2019, for example, high yield or so-called junk bond funds have seen significant inflows.


But as Warren Buffett famously warned about risk-takers, “You only find out who is swimming naked when the tide goes out.” Instead of speculating in risky bonds, those in their 50s and older need to focus on quality in their search for income. Options include highly rated dividend stock funds and bond funds that invest in higher credit sectors while still providing a reasonable yield.

In comparison, many Millennials and Gen-Z-ers have become accustomed to living in a low-rate environment. Only in the past five years have Millennials become a serious force in the housing market. But what they are looking for in homes is very different from what previous generations looked for. They want smaller homes more in line to their lifestyles, with access to open spaces, hiking trails and larger yards. However, these low rates may not last forever. 


Over the past decade, technology has changed the playing field for investors in ways ranging from a near elimination of fees on some funds to the ability to effortlessly create smart, diversified portfolios. But while this is now a market in the throes of disruption, it’s becoming clear that smart financial planning requires a new, deeper level of engagement.

Financial innovation can enhance results by helping people identify their goals and values. As financial technology evolves, we can expect to see two primary impacts. First, more firms will begin using AI tools, like chatbots and virtual assistants, to coach clients and provide greater access. But investors who use these tools only to hear their daily balances could actually undo their planning.

That’s where the second area of technology will be key. Financial technology, enhanced by machine learning, will provide greater focus on behavioral patterns, helping investors accurately gauge their capacity for risk, even before they invest their first dollar in the market. If the technology can help investors understand how they will react in certain markets, it may also keep them from making the kinds of mistakes that can turn a bright financial future bleak with a few key strokes.