OK guys, I guess it's time to get serious. For the first time in my career, during new-client intake meetings, people are beginning to ask, “What is the plan for your practice when you retire”?
Maybe it’s the wrinkles around the eyes, maybe it’s the reality my giggling 18-year-old pointed out the other day while we were standing in the sun that my salt and pepper hair is looking more and more salty these days. Either way, I’m not going anywhere for quite awhile; I still have a whole lot of mojo left in me.
But life does march on, and my generation, the Gen-Xers are coming into the pre-retirement planning zone. Most of the friends our age with whom we spend time are sending kids to college, some are even exploring empty nesting. Everyone is still working their tails off, and most are making more money now than they ever have. I’ve started to notice, however, around the campfire, at the bar or over dinner, we Gen Xers are starting to talk about retirement.
At this point, it's mostly talk about what we will do when the kids are gone. Vacation homes, trips, that kind of stuff. But some are talking about how they could sell a business, downsize the house, or do a less stressful job. You know, pie in the sky type things.
We Gen Xers are a unique little generation. Compared to our Baby Boomer parents and Millennial kids, there’s just not that many of us. We graduated college into the sluggish economy of the early 1990s; good jobs weren’t assumed and most of us were never even offered a pension of any kind. But we certainly do know how to work.
Coming into our own in the shadow of Baby Boomer parents, I can’t remember anyone developing products and services specifically to appeal to Gen X the way every company seems to be tripping all over themselves trying to attract Millennials. We also weren’t born with technology baked into our DNA like our kids; we had to adapt and learn how to use this stuff as it quickly evolved. We still don’t take tech for granted.
Most of us, having never been offered a pension, learned how to invest fairly early on. With the 401(k) being the one thing we could do to help prepare for the future, we did it, and learned to pick our funds the best we could.
Unfortunately, however, a recent study produced by insurance and annuity company TransAmerica found that only 40 percent of us have any coherent retirement strategy. We tend to be putting into our 401(k)s simply because we were supposed to, without ever checking to see if we were contributing enough or investing properly. Sounds so Gen X.
The good news is, in my experience, the ball for my generation is just starting to roll downhill. I’ve discovered from helping Baby Boomers plan for retirement for my whole career that few forces are as financially powerful as a motivated 50-year-old.
With the kids moving out and college expenses behind us, Gen Xer’s can, and will, follow in the footsteps of our parents. Many of us will pull this retirement thing off in what will feel like the late fourth quarter of our careers.
But we won’t do it without a plan, and for those of us in our late 40s to mid-50s, now is the time. If you’re more of a do-it-yourself type, all the necessary tools can be found online, many on your 401(k) company's website. But with investment management costs and advisory expenses settling into a very cost effective range over the past few years, I think working with a qualified financial adviser to develop a plan and a strategy is the better approach.
So pick up the phone, or send the email. Gen Xers, let’s get this task checked off the to-do list.