Recently the CEO of Mass Mutual Life was interviewed about what he saw happening with young people in the work force. He said they have become spooked and do not trust the stock market. He went on to say that these younger people are saving more money than any other generation and not doing 401(k)s and mutual fund investing as much as their parents did. They are watching their parents and are shocked by what has happened.
So what happened to them? Baby Boomers are turning age 65 at the rate of 10,000 a day! They are unprepared for retirement, with a total of $60,000 of assets, according to the 2010 U.S. Census. I repeat, $60,000 is all they have for retirement… despicable! When do you think an age 65 couple will die? ANSWER: Age 84 for the male and 87 for the female, on average. Now go back to the $60,000 of total assets and ask how that will last 19 years, plus? This fact is forcing us all to change the way we are doing things.
Now take health care and then think of this $60,000 of total assets, obviously it just won’t be enough to cover long-term care, which more than half the population over age 65 will need between age 65 and 85. Oh-h-h-h this hurts.
And here is a further national statistic for all people reaching age 65: They only have an average of $13,000 of equity in their homes. Now think back to this same and only $60,000 of assets at age 65 and ask yourself if another measly $13,000 is going to do you much good if you live 20 years beyond retirement age.
Sorry if I have depressed you, but if you’re age 50 or younger, now is the time to do something different than your parents did. Don’t wait until you’re 65 and find that you have no way to take care of yourself in your senior years. Take a hint from the Millennials, who are now starting to get really nervous about the same old status quo financial advice they’re hearing that has been passed around for decades with little results and determine to do something different with your money. That something different should include the following, something you won’t hear much about from your standard popular, so-called financial “experts:”
- Get spending under control while at the same time eliminating debt. This is only possible if you have a Spending Plan and a Debt Plan that you live simultaneously.
- Save using the 60/20/20 Rule, which means that you not only have long-term savings and emergency savings, but you also save for emotional needs as well.
- Get out of ALL debt, including your mortgage (which is considered bad debt) in under 10 years.
- Learn how to pay the right amount of taxes at the right time.
- Learn how to create a predictable retirement based on more than just a herd mentality 401(k) or mutual fund. Think real estate, rental resources, small business ventures, life insurance, and annuities.
In my experience, it all comes down to spending decisions made during emotional times in our lives. Learn to control your emotions and you have hope for a predictable future. Learn to think outside the box so you will have more to look forward to than your parents’ generation. To learn how to do this, call me: (801) 292-1099, ext. 2.