Economic Stress Reduction

The massive Baby Boom generation, those born between 1946 and 1964, is becoming eligible for government benefits. In 2010, an estimated 47 million people were enrolled in Medicare, up 38% from 1990. By 2030, the number is projected to be 80 million people.

Baby Boomers were expected to receive an estimated $41 trillion dollars in “generational wealth transfer” inheritance from their elders. An AARP study says that fewer are expecting such a windfall, and more are expecting less. The main reasons: Inflation, taxes, and health care costs. The elderly are incurring more health care costs than ever and living longer than ever. (30% of 65-year-old women and 20% of 65-year-old men are expected to live to age 95.)

We think it’s best to live your life without expecting something that is not guaranteed. That goes for Boomers and their children, too. The best, but hardest, way to find out what to expect is to talk about it. Have that difficult discussion about financial preparation. Then have the discussion with trustworthy financial advisors, such as an attorney, accountant, or CPA, to make the necessary arrangements and reduce tax exposure. Also, if you receive an inheritance, be watchful against emotional spending. Invest the rest.

Boomers are in their “nesting years,” building their retirement nest egg. But the economic downturn is messing with the nest. This is a game-changer for life planning. Retirement accounts have been cut in half, pension plans are disappearing, and layoffs are increasing. Would-be retirees are working longer, spending less, and re-envisioning their retirement dreams.

It is no surprise that stress soars when the economy tanks. Even in healthy economic times, when people feel economic stress, they tend to suffer from irritableness, fatigue, and sleeplessness. Stress is an equal opportunity killer. It does not care how much money you have or do not have. It strikes in two ways, seen and unseen. It leads to overeating, over consumption of alcohol and drugs, and smoking, not to mention depression and suicidal thoughts. Please, do not even think about suicide due to seemingly impossible-to-overcome debt, job loss, and loss of one’s home.

Invisibly, stress wears down the body’s organs in a cumulative manner, as alcohol and cigarettes do. Stress builds up cortisol in the body, leaving it vulnerable to heart attacks, strokes, and bleeding ulcers. A heart attack could cost you a great amount unless you have health insurance to pay for it (another stressful topic). Why not avoid the heart attack and free up that money for something fun, instead?

Do your best to avoid stress. You have heard the mantra: Manage stress physically by taking care of your body. Avoid unnecessary drugs, overeating, and overindulging. Feed your body more healthy food, give it more sleep, and make it perform more exercise. Manage stress mentally and emotionally with meditation, prayer, yoga, and enjoying various physical activities, hobbies, and friends. As the father of stress research, Hans Selye once wrote, “It’s not stress that kills us; it is our reaction to it.” Here is an added bonus to getting a grip on your reaction to your economic situation: you will spend less on medical and psychological support, thus saving money. In addition, you will reduce your economic stress and enjoy your life more!




Heidi Clingen is a long-time resident of Stevenson Ranch. She and Samuel K. Freshman are authors of The Smartest Way™ to Save, Why You Can’t Hang on to Money and What to Do About It. They offer only their opinion, which does not constitute professional, financial, or legal advice. To receive a copy of The Principles of Financial Independence or submit questions, email them at 2heidi@allwaritey.com