Over the past thirty years, I’ve had a front row seat to the evolving definition of retirement. Sometimes, I feel like a translator with words like “pension” or “annuity payments” to my younger peeps and with words like “passive income” and “digital nomad” for my older peeps. Retirement doesn’t always garner a positive meaning, and my very young peeps don’t even want a long-lasting career to retire from…they want to take their financial destiny into their own hands and make a go of it solo. It has been fascinating to watch and exhilarating to be a part of.
Let me explain:
I started my career in 1995 working with the Greatest Generation who were taking RMD’s before I could spell RMD. That generation didn’t have a lot of open dialogue about taboo topics, and also followed the stereotypical gender norms of the men handling the investing, so as my WW2 veterans died their wives had no idea how much money they had or how to handle it, so I taught them what their husbands taught me. And as the wives died, I passed those assets to their children…who had no idea that mom and dad had millions in the markets while spending most every day like a Sunday and living a humble life while re-washing aluminum foil for the next week’s seven days of home cooked meals.
My next cohort of clients were the Baby Boomers who have made the word “retirement” look more like “spring break”. They are spending their inheritance, one game of pickleball at a time, and sometimes shaming their children for not holding onto a job for 20+ years so they can have the golden retirement nest egg and a condo in Tampa when they retire. They aren’t wrong, but they also don’t understand that like them not wanting their parents’ retirement, their children don’t want theirs.
My third cohort of clients are a mixed bag…they are either a Gen-X/Boomer blend (younger in age, but still old fashioned in money mindset) or a Gen-X/ Millennial blend (in their “work-n-play” approach to money: work just enough to play as much as you want and we can have passive income forever). They have watched their elders lose their pensions which tied them to an age 65 retirement and figured if their manager can retire at age 55, they can be done by 50. Work smarter, not harder. Right? And guess what? They are making it happen by saying goodbye to the Fortune 500 endless sea of Teams Meetings and saying hello to their own internet start-up business that gives them that shot of income needed between when the career ends and social security benefits begin.
None of them are wrong. All of them are right…in their own way. But what I’m trying to point out is how the concept of “Winning with Money” is changing drastically and in two generations we have gone from pensions & snowbirds to passive income & ex-pat - and I see it all getting lost in translation. The older Pensioners are worried their grandchildren are not working hard enough, or long enough, to build up the nest egg required for a Boomer retirement. The younger Digital Nomads don’t want to wait until they are old to travel and give the best of their younger years to a corporation that gives them Taco Tuesdays, but no security in the end.
So, what is the point I’m trying to make?
Retirement is become a very polarizing word. And a word that has become very different to the generations and I feel we need to start finding some middle ground.
I recently spoke with a Gen Z student graduating form a large public university with a degree in engineering. One of the tiny amounts of twenty something peeps in my practice. She told me her plans to work for seven years and then retire. Instead of sounding the alarm bells in my Gen-X/Boomer mind, I asked her to explain. She calculated if she maxed out her 401k for the first seven years of her working career, after making ROTH IRA contributions for the past few years during her summer internships (not to mention investing her grad party money in the stock market when she was 18) she could rely on historical market gains, compounded for 35 years, and have enough for her old age. In the meantime, she would start a business and work for herself doing what she loves to do….not what a manager tells her to do eight hours a day for three decades. And if that business was sold for a profit, or just provided her an income along with way, those initial investments would get the job done for her 65 year old self. I was floored. TikTok Finance Influencers would be proud. This young woman started investing as a teenager and knows to max-out a 401k every year at the age of 22! This next cohort will blow us all away with their access to financial literacy and willingness to have “just enough”…whatever that means to them. In my opinion, she represents the next big mindset shift in the meaning of Retirement. They will watch the Gen-X/Millennials figure it out and then perfect it with the help of AI projections and living with an abundance mindset. I’m looking forward to seeing how these ideas evolve, knowing I will never see how it all works out. I’m hopeful that with joy and personal fulfillment as the eventual targets, this new definition of retirement will be wonderful.
Kimberly Enders CFP® CPFA
CERTIFIED FINANCIAL PLANNER®
Enders Wealth Management
37800 Van Dyke Ave, Suite 125
Sterling Heights MI 48312
www.enderswm.com
#kimenderscfp
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