In this episode of the “Inside the Plan with the 401(k) Brothers”, hosts Bill Bush and Andy Bush, advisors at Horizon Financial Group, continue their ‘Generation’s Series’ where they go generation-by-generation and talk about some of the saving habits and what's on the minds of individuals. So, in this episode of the ‘Generation’s Series’, they will continue talking about ‘Gen – X’ and their behavior when it comes to retirement and savings.
Episode Highlights
- 01:20 – People who were born in 1965 through 1980 come under Generation X, which is a pretty cool generation.
- 03:10 – According to a couple of researchers, by about the age of 40, Gen – X wants to try to have about three times their salary and by the age of 50, they try to make around six times their salary.
- 05:20 – In a study by JP Morgan, around 70% of working-class people say, “I will work longer and delay retirement”, but only about 27% are actually able to do that because of health issues, or because of downsizing in their company, etc.
- 07:00 – Bill says that the other thing that Generation X is faced with is as they began their working careers, pensions were on the downside. Companies stopped offering those defined benefit plans.
- 09:30 – A study by EBRI (Employee Benefit Research Institute) compared the financial status of Gen X families, and found that those families own about 67% of assets inside of retirement plan whereas Baby Boomers at the same age had 71.5%.
- 11:25 - Morgan Housel's book “Psychology and Money” talks about how generations behave based on their upbringing, and what they've experienced in their particular time of those formative years.
- 14:00 - When we do presentations for retirement plans, we do like to zoom out to those greater time periods, because you can get lost in the weeds sometimes about what's going on in the day, mentions Bill.
- 16:00 – Referring to Malls, Bill says, if you got a place where you used to be able to walk in and buy things, and now it's a fulfillment Centre, which is sending it to your house.
- 18:00 – Andy states that when it comes to investing and saving for retirement, it is about discipline, and it's about a habit.
- 20:45 – Retirement saving is how we're going to take care of our 80 or 85-year-old self.
Three Key Points
- Generation X has experienced various crises including financial busts, and other geopolitical campaigns, like wars and things like that, that occurred in real-time, and they are very scary and uncertain. But at the same time, in the midst of us having some volatility in this current year 2022. As an investor in the stock market, you're not just throwing money into something that has some random value. It's a value based on your investment in the companies like Walmart, McDonald’s, IBM, Amazon, etc. So, you're investing in the value of what that company is worth.
- For Generation X, if you're in your 40s and your 50s, possibly, and you are working, you probably need to think about retirement a little bit more. So, it is true that when your age flips to 50, and you say, it's just a number. But at the same time, you do realize that you are a lot closer to retiring, and you are a lot closer to other things. It is to sort of get people prepared to think that even if you haven't done much yet, there's still time left to invest in the retirement plan and to make the progress.
- Andy says, it's not about some specific goal out there, it's about a lifestyle. It is the same thing with investing, create a lifestyle habit of putting dollars aside so that you realize as you're getting further down the runway, how quickly you're moving. That's the old expression - days are long, but yours are short.
Tweetable Quotes
- “Out of the six children that are Bush kids, there are five of us that are members of Generation X, and so we know this generation.” – Bill Bush
- “I think by this time in most of Gen-X’s lives, by about the age of 40, you want to try to have about three times your salary.” – Andy Bush
- “Experts kind of worry that Generation X maybe isn't placing retirement savings on the front burner.” - Bill Bush
- “The 401 K plans really started in the early 80s.” - Andy Bush
- “Once the kids are out of the house, it does give a family the opportunity to start putting more in, because their expenses are dropping, but their incomes better.” - Andy Bush
- “If you can turn in tune in to a financial channel, CNBC or MSNBC or any of those and it's going to tell you exactly what went well.” - Andy Bush
- “Now we seeing the speed and the immediacy of things, it's really changed the world.” - Bill Bush
- “I think brother Bill and brother Pete have written a book, and it'll be published maybe later in the summer this year, that is called ‘The Runway Decade’.” - Andy Bush
Resources Mentioned
