Unsurprisingly, the Trump Administration has declared war on individual investors, making it more difficult for millions of Americans to have a financially secure retirement. For millions, there may be no retirement, or certainly, there may be one with a lower quality of life than when people were working.

However, to hasten this downward spiral, the Trump Administration has quietly erased any pro-individual investor guidelines and regulations from the U.S. Department of Labor’s (DOL) website.

Specifically, the administration has eliminated the web pages regarding the Frequently Asked Questions (FAQs) that individual investors should ask their financial planners and 401(k) advisors (at work and for their plans) to see if they are working on behalf of investors or companies that sell financial products. The interests of both parties are almost opposite. 

The FAQs covered those the DOL issued to clarify the new fiduciary or conflict-of-interest rule (COIR) and included links to the original FAQs. However, those critical FAQs for individual investors were erased within the past few weeks. 

Don’t be victimized by financial professionals who are double-dipping and getting paid under-the-table fees by financial product providers.

And here is why:

Those FAQs empowered individual investors. Without the FAQs, many investors would not know they were being victimized by financial professionals who were double-dipping and getting paid under-the-table fees by financial product providers of mutual funds and annuities, to name a few. 

How much do seemingly small investment fees and expenses total over your career?

One estimate found that paying just 1% in fees could cost a millennial more than $590,000 in sacrificed returns over 40 years of saving.

How much do seemingly small costs total over your working career?

One estimate found that paying just 1% in fees could cost a millennial more than $590,000 in sacrificed returns over 40 years of saving.

So, with this in mind, here are the fundamental questions that investors should ask to see if their financial professional is on their side or working against them.

Kudos to Fiduciary Plan Governance and Chuck Humphrey, a former attorney for the DOL and IRS, for posting this on their website and to fiduciary standard proponent Kathleen McBride for publicizing this latest attack on investors.

Here are the questions that should be posted in every office and passed out in every workplace 401(k) meeting. 

1.      Will you acknowledge in writing that you are a fiduciary when you make investment recommendations to me? (i.e., Do you agree that you are legally required to make investment recommendations only in my best interest, and if not, why not?)

2.      Are you complying with the DOL’s conflict of interest rule and exemptions on fiduciary investment advice? If you use one of the exemptions, explain the conflict of interest requiring you to comply.

3.      Do you have a credential or designation from an accredited program that requires training and holds its members to ethical standards? Does the organization let investors file complaints about the people they have issued adviser designations to?

4.      What fees and expenses will I be charged? Will you list those fees and costs and explain what each fee and expense pays for? Do I pay you all these fees and costs directly, or are any fees and expenses taken from my investments?

5. Does the firm get paid from other sources concerning my business with you? Do you or your firm pay anyone else because I opened an account with you or because I make investments that you recommend?

6.      Do you make more money if I buy some investments instead of others? Explain why.

7.      Are there any limitations on the investment products you recommend? If so, what are they? For example, do you sell only your firm’s products (“proprietary products”), or do you sell products from other companies?

8.      Under what circumstances will you monitor my investments and make recommendations about changing my investments?

9. Why do you recommend a rollover from my current plan or IRA? Will I have to change my investments if I move my retirement savings to an IRA or a different plan? How do the fees and expenses compare to what I am paying now? Why do you think a rollover is better than leaving my retirement savings in my current retirement plan or IRA?

10.  What is your experience with advising on retirement accounts?  What customer references or customer satisfaction surveys are available for my review?

These ten questions can save you hundreds of thousands of dollars over your working lifetime. Estimates have found that the financial services industry, the firms with logos of Snoopy the Dog, whales, big bucks, lighthouses, and Homer Simpson look-alikes, are trying to take advantage of you at every step. Conflicts of interest cost investors about $17 billion annually, so work to avoid becoming a victim. Sadly, this should not be easy since the Trump administration is focused on helping the industry victimize you.

So take control over your money.

Ask the questions and determine who is working for or against you. You might be shocked by their answers.

Questions are from the U.S. Department of Labor

Even in the best of times, retirement planning is never an easy or fun task.

Now, this task is being made more difficult because the Trump Administration and top Republicans are considering plans to cut Social Security, Medicare and Medicaid, reducing benefits, adjusting tax brackets and deductions, raising the retirement age, cutting financial regulations and fighting any increases in the minimum wage. Any one of these makes the retirement planning process more difficult, but there is more.

Overall economic growth affects the ability of people to buy houses. When home purchases decline due to a person’s inability to qualify for a mortgage, it means a major engine of wealth creation—home appreciation—is not accessible to many future retirees.

For millions of Americans, homes have a greater value than their 401(k) stock and bond portfolios. Future retirees rely on their home equity to borrow or when it is time to downsize, to sell a larger,

hopefully more expensive house, and move into a less expensive one. That is a time-tested plan and it has worked for many decades.

But the current reality is much different. This is the first generation in American history that is not better off financially than their immediate older generation. A 2014 study by the World Economic Forum found that more than 80% of U.S. households saw no growth in real income during the period 2005 to 2014. This explains why sons and daughters, many burdened with college debt or working in low-paying jobs, are living with their parents and unable to buy homes.

So how will all this news be incorporated into 2017 retirement planning?

My bet is not so much. Retirement planners look at client profiles, risk tolerances, goals, assets/liabilities, available funds, client needs and model portfolios. They have been taught to avoid discussions about politics and religion even though both topics are the focal points of news shows. Most planners avoid discussing Trump’s bad news because it is too sensitive, upsetting or violates company policy.

That is why it is important for anyone planning for retirement to seriously consider this dangerous new environment. The new reality is that everything has changed. Worse, most of the changes will not bode well for future retirees.

Making Smart Decisions About Housing in Retirement

While there are many negative possible events to consider, what we’ll focus on now is the important role of housing in retirement planning. Housing is critical since it is the largest single expense, aside from unanticipated medical expenses, that most people will face in their expected 30 years of retirement. While spending drops for most retirees, the majority of spending goes toward home-related expenses, such as mortgages, taxes, repairs, and insurance.

Here are some facts to consider, based on a paper “Decisions About Housing During Retirement,” by Wendy Weiss and Anna Rappaport:

• Housing expenses generally constitute a major share of total spending during income earning years, as well as retirement. Housing expenses constituted 31% of all expenditures for all consumer units (presumably with retired as well as employed household members) more than half of the housing expenses for homeowners are for mortgage payments.
• There is no accepted rule here, but experts suggest that housing expenses should not exceed 30% of projected retirement income. This means housing costs (mortgage, property taxes, and maintenance for homeowners and rent for tenants) should not exceed 25% to 28% of projected income at the outset of retirement. Renters can expect rents to rise over the decades as they age.
• Boomers hold more diversified asset portfolios than their elders. While their overall net worth is less concentrated in their home and home equity, retirees can decide on the relative advantage of pulling assets from investment accounts or retaining those assets to provide income for their long life expectancy.
• Accessing home equity. A 2007 study found that 24% of the working households expect to sell their home to fund their retirement. Increased longevity may push some aging Boomers to cash in on housing equity at some point over the 30 or so years they are retired.

So where does this leave us?

Given the bad signs in other key financial forces that will affect retirement (likely increases in medical expenses, cuts in pensions and Social Security, etc.), it’s important to make smart decisions regarding housing in retirement. Plan for increases in taxes, home owner’s association (HOA) fees, assessments, and rents that predictably will happen during your retirement.

These are all predictable, but they will be aggravated if the Trump administration makes fundamental changes to the current federal package of retirement programs. All this will only add to the nation’s current, and undiscussed, retirement crisis.

Two of the cherished gems of the investment and retirement industries are being criticized as failing and this means more bad news for Americans planning for retirement.

The first gem to be tarnished was shown in an eye-opening research report from the Economic Policy Institute about the failure of 401(k)s and IRAs to meet the retirement income savings needs of average Americans as they retire.

Not surprisingly, the study found that retirement income gaps are only magnified in retirement by people who have not earned enough while they were in their prime working years. This means that people who were disadvantaged because they lacked a college degree, were single, widowed, or not white, only went into retirement without the savings they needed to live at their current lifestyle.  In short, to people in these categories, retirement offered only more of the same or worse after they stopped working in terms of disposable income.

The Economic Policy Institute study should be read in its entirety by all retirement and investment professionals and all investors since it is a sobering view that the retirement system is seriously broken and few new solutions are on the horizon.

Among the study’s main conclusions, supported by charts, are the following:

• “Retirement wealth has not grown fast enough to keep pace with an aging population and other changes.”
• “The growth in retirement inequality has not been random—the rich have gotten richer and the poor poorer.”
• “The shift from defined-benefit to defined-contribution plans has exacerbated racial and ethnic disparities.”
• “Retirement readiness gaps have widened between workers with and without a college education.”
• Single people and women will continue to face a more difficult retirement since they lack the financial resources.

Writing in TruthOut, Monique Morrissey of the Economic Policy Institute, said “the simplest solution to the looming retirement crisis would be expanding Social Security, though that’s unlikely in a Republican-controlled Congress.” This is very true. The Republicans have a stated goal of privatizing Social Security, which would put trillions of dollars back into play for investment, mutual fund and retirement planners who would all suck up huge fees and expenses to push favored funds and insurance products.

All this would happen without the benefit of disclosure and transparency since at the same time this privatization would occur, the financial industry lobbyists would be pushing to repeal the fiduciary standard from the investment industry that was passed only a year ago by the U.S Department of Labor (DOL). This would create the loss of hundreds of billions of dollars in retiree income to the investment industry in the form of huge undisclosed fees and expenses.

Plus, given the shift from employer-sponsored retirement plans to 401(k)s and IRAs, individuals, many of whom are not sophisticated, have assumed all the investment risk of managing their portfolios over the time they are working and in retirement.

Milton Friedman Was Wrong

The second long-held touchstone to be broken is an assessment that the spending patterns of people as their income drops has been shown to be wrong. This spending pattern behavior was important to economist Milton Friedman’s theory that stated that people would continue their spending levels when they became unemployed at the same level as if they were still working. Friedman’s theory stated that people would borrow in order to maintain their living standards rather than cut back when they became unemployed.

Friedman’s mistake is evident in this interesting chart from the Economic Policy Institute which shows that retirement savings declined after the 2008 recession, most likely because average working people used up their hard-earned savings to pay for everyday living expenses.

According to author Noah Smith of Bloomberg, Friedman’s closely-held theory is wrong because when people lose their job, they spend less. “This is consistent with the credit-constraint model, since lots of people can’t borrow enough to maintain the lifestyle they enjoyed when they had a job. After that initial drop, the authors find that spending continues to drift lower,” Smith wrote.

The second problem in Friedman’s theory has to do with the big drop in spending even when people get unemployment checks. When this happens, people know when the checks will arrive and how much they will receive, but even then, unemployed people dropped their spending even more and this confused the academics. Yet in this chart  (see below) from the Economic Policy Institute, the long-term and lingering negative impact of the 2008 recession is evident in the reduced amounts people are now saving for retirement and this continues today.

How bad is this situation? It’s bad: the median retirement savings amount for people aged 56 to 61 (from 1989 to 2013, in 2013 dollars) is $17,000. For other age groups, the numbers are not any better as this chart shows.

Now maybe this just shows how PhD economic academics view the world versus people who have ever been laid-off and received unemployment checks think. If you have ever been laid off, and this should not surprise anyone who has ever been in the workplace, you know the money will end soon and that you have fixed living expenses (mortgages, rent, car insurance, food, utilities, etc.) that are all constant expenses, so going to get a loan is imprudent and stupid. Pay-day loans charge interest rates that border on being usury, but monetarist and free-market economist Friedman would never be accused of living in the normal world.

The Fund Industry Ignores the Reality

Not surprisingly, anyone who has ever covered or working in the retirement industry could expect a detailed, well-constructed and twisted response from the financial industry lobbyists whose main job is to protect the status quo. This response came from the notorious Investment Company Institute (ICI), which employs at least four PhD statisticians who can logically prove that it is snowing in Hawaii on any given day.

So given the results of this Economic Policy Institute study, the ICI produced its own PhD-inspired version of the snowing-in-Hawaii scenario to show that the benefits of 401(k)s and IRAs provided and managed by their dues paying global investing firms, many of which created the 2008 recession, are working just fine.

In the past, the ICI has been a shill for the investment industry and regularly opposed the U.S. Department of Labor’s (DOL) pro-

investor fiduciary standard. In a letter to the DOL, ICI’s president Paul Schott Stevens, (who makes $1.797 million annually as ICI president), said that if the DOL’s proposed rules were adopted in their current form, “it would do great harm,” presumably to the investment industry, but not investors, since it would eliminate the conflicts of interest common in many sales practices.

Instead, Stevens and other financial industry lobbying groups, said a bill passed by Republicans in the House (H.R. 1090) would push the SEC and the DOL to develop “a harmonized fiduciary duty for all investors.” He did not elaborate on what the harmony would sound like, especially since these discussions have been going on for about a decade. In related testimony presented Sept. 30, 2015, Stevens also challenged the DOL’s data that showed high fees and expenses unnecessarily cost investors $17 billion annually.

But even as the EPI’s Morrissey noted, “the ICI’s rosy report shows that decades into the 401(k) revolution seniors received $105 billion dollars in pension income and only $29 billion from 401(k)-style plans in 2014.”

This is why both of these reports come at a very difficult time for most Americans as we face a new, reactionary and anti-average American Trump administration that is bent on Social Security, Medicare and Medicaid privatization, accompanied by revoking health benefits for millions of average Americans.

The bottom line for anyone planning for retirement and this includes every working American, is that planning for retirement under the Trump Administration environment is something that requires thinking well beyond the average, canned retirement planning scenarios provided by too many professional retirement planners.

For average Americans’ this means following a scenario that involves cutting investment and career risk and controlling what you can control. This includes controlling investment fees and expenses, investing in low-cost, passive ETFs and mutual funds, saving more and cutting consumption. Since this is presidential inaugural week, we should remember that the only thing we have to fear is fear itself and the Trump Administration.