The “new normal” is more like the “old normal” as folks hit the road and pass through TSA checkpoints again. You can’t keep Americans down. Those calling for drastic changes to life as we know it are often proven wrong through time. Still, some features of the COVID-era will persist—like Zoom meetings and more frequent washing of hands (hopefully).

What else has somewhat changed? A few things come to my mind.

  • The rise of meme stocks and Gen Z’s appetite for risk
  • Government intervention during crises
  • Some baby boomers looking to retire early while others are continuing to work because they want to. The typical retirement age is changing.

On the first point, last week’s surge in the share price of AMC helped drive home the notion that this sort of stuff (like we also saw in January) is not going away. With free trading, fractional-share trading, free casino-like phone apps, social media buzz, and other factors, kids in their teens and 20s will get sucked into these story stocks. We talked about how Fidelity is nudging teenagers to trade more. You mustn’t let these attention-grabbing bouts of single-stock excitement distract you from your long-term financial plan.

 

AMC Price Chart Year-to-Date

To the second bullet, like it or not, expect the Federal government and the Federal Reserve to act aggressively to control future economic crises. The economists call it “Modern Monetary Theory”. In short, it means those at the reins of the economy treat cash like monopoly money (what could go wrong??).

It’s worked so far—the stock market is up, inflation is not *too* high, and the US Dollar’s value versus other currencies has not dropped very much. Many of the helpful relief measures from 2020 have continued through today despite a big economic recovery that has already happened.

Finally, the third point is something revealed in recent employment data. It’s a fun topic to talk about—early retirement. Early retirement is not always about sailing off into the sunset on your terms, however. A recent article discussed how some boomers were forced out of the labor market prematurely. The data shows 1.7 million older workers retired early due to the COVID recession. The workforce population for those aged 55+ is still significantly below the pre-pandemic peak as pictured below.

 

Fewer Boomers in the Labor Force[i]

The decline comes as nearly 9,000 baby boomers retire each day, according to a Pew Survey.[ii] Hopefully, those left behind from the pandemic can leverage the significant aid packages put forward by the government so they can get back on their feet. If you are among the fortunate group who saw their net worth increase (via a strong stock market and skyrocketing housing prices), it might be time to review your financial plan. You could be among those in a position to retire earlier than expected.

 

The Point

The economy is always changing. Trends are constantly evolving, and the quality of life gets better over time. Some shocking events, while scary to live through, usually drive innovation and positive change. That’s about what we experienced last year. I wager that your financial situation looks at least a little different from early 2020. Have your goals changed? Do you have new priorities? If not, great. But let’s chat if indeed a rising stock market and a red hot housing market, along with inflation concerns, has you re-thinking things.

 

We’ll talk soon!


[i] https://finance.yahoo.com/news/surge-early-retirements-exposes-inequalities-210646312.html

[ii] https://www.pewresearch.org/fact-tank/2020/11/09/the-pace-of-boomer-retirements-has-accelerated-in-the-past-year/