Census: More wealth than thought held by older Americans

by Steven A. Morelli

Are older Americans holding more wealth than generally thought? If the Census Bureau data is correct, it’s true.

The Census Bureau found that the population overall had higher income and slightly less poverty than previously thought, thanks to a new analysis project, the National Experimental Wellbeing Statistics, or NEWS. The bureau is correcting survey data for a more accurate measure by linking the survey, the decennial census and commercial data to remove errors and bias in income and poverty estimates.

The project found that in 2018, median household income was 6.3% higher than in survey estimates, and poverty was 1.1 percentage points lower.

But older Americans were faring far better. For those 65 and older, household income was 27.5% higher and poverty was 3.3% lower.

The previous estimates were spot on for those under 65, with median household income showing a slight difference of -0.1% in the corrected data. But for the 65-and-older group, household income was $55,610 versus $43,700, a 27.3% difference.

The next age group down fared better as well. For those 55-64, the correction showed $72,430 versus $68,950, a 5% difference. The change below that was statistically insignificant.

Older people were less impoverished as well. For all ages overall, the poverty rate

“Of no surprise, this lack of confidence correlates to the amount Employment Extenders have in retirement savings,” according to the report. “As many as 60% say they have less than $500,000 in savings, including all investments, savings accounts, pension plan/defined benefit plans, employer-sponsored retirement plans (e.g., 401(k), 403(b), 457) and IRAs or Roth IRAs. And three-in-10 admit to less than $100,000 in savings.”

Perhaps the most concerning theme in the survey results was how few are preparing for the likely financial or physical challenges ahead of them.

Read the full story online: bit.ly/oldwork23 was 1.1% lower. That might not sound like much, but it represents a 9.4% decrease in the number of people in poverty. For people over 64, poverty was much lower, with a 3.3% decrease in the poverty rate, representing a 34.1% drop in the number of people in poverty.

Steven A. Morelli is a contributing editor for InsuranceNewsNet. He has more than 25 years of experience as a reporter and editor for newspapers and magazines. He was also vice president of communications for an insurance agents association. Steve can be reached at stevenamorelli@gmail.com.

There was no decline for Black people, people with disabilities, children, those with some college education, and Midwest and rural residents.

The rich were even richer than estimated in the share of income, but only at the very top, which by now seems familiar for the modern American economy. The top 5% fared better, but the groups directly below did not see a similar lift.

Read the full story online: bit.ly/olderwealth23

Steven A. Morelli is a contributing editor for InsuranceNewsNet. He has more than 25 years of experience as a reporter and editor for newspapers and magazines. He was also vice president of communications for an insurance agents association. Steve can be reached at stevenamorelli@gmail.com.

Third-generation financial advisor and member of National Association of Insurance and Financial Advisors Jeff Chernoff says he owes his success to his family roots in the business, what he has learned through being an association member, and his passion for giving back through his volunteerism and mentorship.

In recognition of his work, Chernoff was named NAIFA’s Young Advisor Team Leader of the Year for 2022. Vice president of his family’s Tampa-based Insurance and Trust, Chernoff is also president-elect of NAIFA-Florida and is past president of NAIFA-Tampa Bay. He has mentored dozens of young professionals in recent years.

Chernoff’s leadership activities, however, extend beyond NAIFA. He serves on the board of the Tampa Bay Chamber of Commerce and is vice president of Partners in Network, which links professionals in order to facilitate referral-based business growth. He also serves on cultural boards, such as the board of the Stageworks Theatre in Tampa. This volunteerism not only provides a way to give back, but it also provides an opportunity to build his professional network.

Chernoff credits NAIFA for helping him make the transition into the insurance business from his earlier career in higher education, and he credits association-sponsored trainings for helping set him on the path to success.

Speaking with InsuranceNewsNet publisher Paul Feldman, Chernoff describes how volunteerism inspires him and why “we’ve always done it this way” no longer holds true.

Paul Feldman: Congratulations on being the Young Advisor Team Leader of the Year. Tell me about that. What does that mean to you?

Jeff Chernoff: I was overwhelmed when I found out. I joined NAIFA in March 2011, the same month that I got licensed. Like many leaders in our association, I started off by getting involved in what was then called a local association, now a chapter. Through the chapter, there were opportunities for state involvement. I kept showing up and kept asking, “How can I help?” For me, it felt like a true recognition of all the efforts that I’ve been doing for the past 12 years.

Feldman: You’ve been actively involved. What are some of the lessons you’ve learned from your fellow advisors and the people you’ve been mentoring?

Chernoff: Don’t be afraid to put yourself out there. But if you are asking to assist, make sure that you do whatever it is that you say you’re going to do.

There are a lot of people who volunteer but never do anything, never make any sort of a positive impact. The people who do make that positive impact stand out. Which led me to leadership opportunities.

Feldman: What are some hard questions you faced or that you’ve asked as you’ve worked with the organization?

Chernoff: One of the questions that I ask a lot is: “Why are we doing this?” I don’t want to hear, “Well, we’ve always done it that way.” Just because we’ve done something the same way doesn’t mean that’s how we need to do it now. We need to come up with new ideas; we need to improve our association.

One of the things NAIFA says is, “Youth is the future. Young advisors are the future.” I’m always quick to point out, “No, we are not the future. We are the now.” I think the average NAIFA member is in their 50s — that’s not a great look for us when we are trying to attract a wider audience. We, as an association, should work to bring in younger pe ople.

Feldman: What do you think NAIFA could do or should do as an organization to inspire younger people to enter the field or become NAIFA members?

Chernoff: You would never go to a doctor who wasn’t part of the American Medical Association. You would never go to a lawyer who wasn’t part of the American Bar Association. Why would you consult someone about financial services who wasn’t part of that professional association?

NAIFA is reaching out, going to colleges and universities, and reaching out to people in risk management and finance and encouraging them to get involved. The association will hold its diversity symposium in May for the seventh or eighth year. NAIFA recognizes they need to get younger, they need to appeal to a broader audience. But it’s like turning a battleship around. You have to go five miles in the wrong direction before you can actually turn around.

Feldman: I think a lot of people join organizations and just expect magic to happen. I truly believe associations are about getting involved. What did you learn early in your career when you got involved?

Chernoff: What I learned is that I’m not the typical young professional. I’m involved with mentoring a lot of young professionals, and the conversation that I hear over and over is, “Oh, I went to one or two meetings. I didn’t get anything out of it.” In addition to being a member

your decision to enter the business?

Chernoff: My grandfather worked for MetLife from 1959 to 1981 and then retired. In our family — including both sides — there’s something like 15 family members who have worked in insurance or financial services.

My father’s oldest brother, my uncle, he worked in it for a short time. My aunt worked in it on the administration side. She met her now husband, my uncle, at MetLife. We had a cousin who became a financial advisor. Ironically enough, my uncle worked in claims for Travelers for 40 years. I’ve always been around the business, but it was never something that I considered.

I remember my father started our company when I was 3 years old. He was working six days a week. He would come home for dinner and then, a lot of times, after we went to bed, he would go out for evening appointments, networking or of the national organization, I currently serve as president of NAIFA-Florida. I’ve been speaking about the need to create micro volunteerism. We have to create opportunities for young professionals, people who are just getting into the business, and make them feel as though they have a voice. And make sure that their voice is heard.

It took me 12 years to become president of my state. That is an incredibly long time. We, as an association, must do better and must provide those impactful opportunities immediately.

Feldman: You are third generation in the business, like I am. How did that influence whatnot. I remember on school holidays and weekends, we would come in and do things around the office, like filing. I was very much around the business. At that point, though, I never even considered going into the industry.

Then, my wife got a job at the University of South Florida in May 2010. Florida was still being impacted by the recession. If you’re looking to work in higher education and there’s not a lot of public funding available, you’re going to have difficulty getting a job.

My father said, “Look, you’re here. Come in, see what you think. No pressure.” Within three months, I got my customer service representative license and was on the path to becoming a licensed agent. I haven’t looked back.

Feldman: You were about 30 when you got your license, so you had a little bit of a career before you got into the business.

Chernoff: Yes. My previous career was working in higher education, managing residence halls. After I came into the business, my father said, “One of the reasons I wanted to start a company is that if either one of my kids wanted to come into this business, it was available for them.” He was always willing to allow us to pursue our dreams or pursue what we felt was going to be best for us. He was just excited that I had shown any interest in it at all.

Feldman: Did your family members inspire you to join and be active in NAIFA?

Chernoff: My father definitely did. I’m assuming my grandfather was in the association; at that point in time, though, it was the National Association of Life Underwriters. When you contracted with MetLife, one of your onboarding forms was signing your NALU application. My father was the one who gave me my NAIFA application. He said, “Fill this out. You need to be a member of your professional association.” He was the one who encouraged me to make my first political action committee contribution and said, “Give $50. It won’t hurt you much, but it’ll make all the difference in the world.” He also gave me the gift of knowing the value of advocacy.

Feldman: Tell us a little about your practice.

Chernoff: We’re a multiline agency. We specialize in working with business owners on their personal lines insurance. We also work with them on their business needs for life insurance and disability income insurance, and then we also work with them on their investments.

Our market is business owners and particularly small-business owners and their key executives. We do a lot in the group retirement space. We do financial planning.

We’re a small business. We’re made up of four agents, two of whom sell life insurance and financial investments — which is what I do — and then two of them who are strictly property and casualty. We do a lot in the third-party money manager space and working with clients on the wealth management side.

Feldman: How do you do your marketing and sales? I know you said you do a lot of networking. I think that’s a missed opportunity for anybody who sells locally.

Chernoff: I’m involved with the Tampa Bay Chamber of Commerce. I’ve served on their board for several years. I mentor their young professionals. I’m a past chair of that program.

Actively participating is important. I tell people, “When you get involved in something, truly get involved. Don’t just show up. Don’t just pay membership dues simply to say, ‘I’m a member’ or ‘I’m doing this for a resume line.’ But rather, show up, volunteer, donate your time, donate an hour a month. If you can donate more, great.”

What often ends up happening is that the people you work with come to you and say, “Hey, I have this insurance issue or I have this financial services issue. Is this something that you might be able to help me with?” I get between 30% and 40% of my business from the Tampa Bay Chamber of Commerce.

I serve on probably four or five different committees. That’s in addition to the things I do with NAIFA. I’m currently chair of our leadership Tampa Alumni Association, which is made up of 550 members. I do quite a bit because I’m passionate. What’s interesting about my prior career is that it taught me the importance of service. It taught me the importance of giving back. When I changed careers and went into insurance, that’s what I missed. So, by volunteering my time, I found a way to be involved and to mentor and make a positive impact on my community.

Feldman: What advice would you have for a person who is new to the business? What are some of the easy first steps they can take to network and create business for themselves?

Chernoff: That’s one of the ways I benefited from joining NAIFA. I’ll tell you how I became involved with the chamber of commerce. My father told me early in my career that I was a terrible manager who didn’t know how to train people. But, he said, there are NAIFA classes you should consider taking called the LUTCF, the Life Underwriter Training Charter Fellow program.

The very first course I took was on prospecting. There was a line in the textbook that said, “You should consider joining your local chamber of commerce.” I took the book’s advice. I showed up and I said, “Hi, I want to get involved. What can I do?” It was as simple as that.

NAIFA has the professional development resources that will be needed. They’ll help you figure out the type of professional you want to be.

Feldman: One of the courses you teach is NAIFA’s Leadership in Life Institute. Tell me a little bit about that, what you got out of it and how it helped your business.

Chernoff: I went through the course in 2014. My father said, “You should get more involved with NAIFA. This is something that will serve as a door opener for you to get involved.” What LILI is meant to do is to help people grow professionally, grow personally, be a better family person and be more successful in sales. Those are the four premises. The course is designed to help challenge your way of thinking and make you a better leader. That’s what it did for me. When the opportunity came for me to moderate the course, I said, “I would love to do that. It’s something that I’m very passionate about.” As a moderator, I serve as someone to provide perspective, challenge opinions appropriately and help people taking the course grow as people and as professionals.

Feldman: How do you work with agents who are not really sure this industry is right for them? What are some ways of keeping people engaged?

Chernoff: The reality is that, yes, the start of your career can be really tough. The first two to five years are the hardest. If you can get over that hump, eventually you build enough credibility that people start to work with you and you build a positive reputation.

If I were sitting across from someone right now who was thinking about exiting the business, the first question that I would ask them is why they got involved in the first place. Why did they choose to join this profession? Have they had the opportunity to see a death claim paid and what sort of impact that had on that family or on those loved ones? Until they’ve experienced it, they really don’t know the value of what it is that we do.

I was 10 years into my career when I paid my first death claim, and I saw the value. It’s something that has been very, very impactful.

Being part of a professional group can help even if you’ve been in the business for a while. For example, the past 10 Young Advisor Team Leaders of the Year meet on a monthly basis, almost like a study group. Even though I’ve been in the business for a long period of time, I can have a down day. We’re told “no” more often than we’re told “yes.” That can be debilitating psychologically. Last month, I was having a down day. I was really kind of disappointed about something, and those two hours in the monthly team leader meeting inspired me. It really lifted me up.

Feldman: Napoleon Hill talked about the power of a “mastermind” group, and that is a big benefit with NAIFA. Some people feel like masterminding with people in your local market is feeding their competition, but you haven’t found that to be true?

Chernoff: Absolutely without question. They must have an “abundance mentality.” For example, the Tampa Bay media market is made up of 3 million households. How many policies am I going to sell in my lifetime? It’s certainly not going to be 3 million. I don’t need to sell 3 million. I need to sell one or two a week. I think the first part of it is helping people switch from a mentality of scarcity to a mindset of abundance.

I’m very fortunate in that most of the people I’ve interacted with, including those with NAIFA, very much have an abundance mentality. They want to help you. The evidence proves members of NAIFA make more money than those who are not in NAIFA. I think part of that has to do not only with the abundance mentality but also with the resources that NAIFA provides to those in our profession.

Feldman: What benefits can someone who has been in the business a long time get from joining NAIFA?

Chernoff: Most of our members join NAIFA for one of three reasons. No. 1, advocacy. No. 2, the ability to share ideas and to learn from other people. Our industry, for better or for worse, hasn’t changed that much in 40 or 50 years. A good sales idea from 50 years ago, a lot of times, still works today.

No. 3: People join because they want to belong to a group of like-minded professionals who want to be ethical, who want to do the right thing. I think NAIFA appeals to all of our industry in those different ways.

NAIFA is being much more intentional in terms of making sure that there are benefits of value for members.

For example, three years ago, there was an advanced planning session, a half-day workshop. At that session, I learned a defined benefit plan can contain life insurance.

As part of the defined benefit plan, the premium becomes tax deductible because the policy is held in a trust and the death benefit is tax deductible. Well, 95% of my clientele are business owners or they’re key executives.

A light bulb went on and it revolutionized my business. I spent the time necessary growing that part of our business. That’s when we started our group retirement division. All that came from what I learned from NAIFA.

And I learned the importance of how to prospect by joining your local chamber of commerce. About 30% to 40% of my business comes from that. I don’t think the average industry member knows all the things that NAIFA offers. I wouldn’t be here if it weren’t for NAIFA.

A ‘Short and Shallow’ Recession?

Is the U.S. in a recession? “It’s probably the top question of the day,” said Dana Peterson, chief economist at The Conference Board, at a recent webinar.

If the U.S. is in a recession, “it’s probably starting right now,” she said. She presented some data pointing to a recession starting either in the first quarter or early in the second quarter of 2023. Leading indicators have fallen well into negative territory, she said. A current reading of those indicators suggests a recession may already be here.

Recession warning signals “have been flashing red since March 2022,” Peterson said. She noted that the six-month rate of leading economic indicators fell below 4% at that time. The diffusion index has been below 50 since January 2022. These two factors suggest what Peterson described as “a shallow recession.”

If the U.S. is in recession, Peterson said, she doesn’t anticipate deterioration in the labor market. She predicted a modest increase in the unemployment rate, which would level off toward the end of 2023.

Older Americans Doing Better Than Previously Thought

Forget the image of an older person living on cat food in retirement. Older Americans may be doing better financially than the U.S. Census thought they were, according to a new analysis the agency recently released. The Census Bureau found that the population overall had higher income and slightly less poverty than previously thought.

An analysis found that in 2018, median household income was 6.3% higher than in survey estimates, and poverty was 1.1 percentage points lower. But older Americans were faring far better. For those 65 and older, household income was 27.5% higher and poverty was 3.3% lower.

Even if seniors were doing better than expected in 2018, they had a tough time during the pandemic. Teresa Ghilarducci, an economics professor at the New School who studies retirement policy, said the skyrocketing rate of early retirement will set older Americans, especially poorer people with fewer resources, back economically.