Millennials, Gen X, and Boomers: Different Money Challenges

SPEAKER_1 (0:01)

Here's what's coming up on this edition of The Retirement Huddle with Mark Howard and your host Ron Studds.

Mark Howard (0:08)

People want to control their lives. The ability to do what you want, when you want, with who you want to do it with, as long as you want to, that's priceless.

SPEAKER_3 (0:20)

It's time for The Retirement Huddle with your local financial coach, Mark Howard. If Retirement is a game, you're in it to win it. The Huddle is where your financial battle plans are drawn. And Mark Howard is here to help with the X's and O's. So, let's kick it off and break the Huddle. The Retirement Huddle starts now.

Ron Stutz (0:47)

Hey, you know, I know you work with a lot of people of different ages, different generations. Let's talk about the financial challenges that different generations are facing. There are the millennials, people who were born between 1981 and 1996 I have a hard time keeping up with these different generations, but that's true.

I guess this would be somebody who's like 45 to 60, 45 up to the late 50s, whatever. What are some of the challenges that these folks face?

Mark Howard (1:23)

Well, quite a few. As you can imagine, I think about my stepdaughter. She was born in 1996, the year the Olympics came to Atlanta.

She doesn't have any of this, thank goodness, but a lot of people do. Well, my gosh, my kids are in that millennial. They're millennials since they were born. Yeah, late 80s, early 90s. Student loan debt, and that's something, fortunately, my kids don't have, but I know that they're trying to buy houses. And my son was able to buy one. He bought a starter home, but home prices are soaring. Even rents are very, very high. And I'm seeing less wealth accumulation at that present age compared to some of the past generations of the same age, for sure.

Ron Stutz (2:09)

All right, how about Generation X, which I don't know who comes up with these things, but they define whoever they are.

They define Generation X as being born between 1965 and 1980 There are other challenges that these folks have as well.

Mark Howard (2:28)

Yeah, and we're starting to see a whole lot of them, as you can imagine.

A lot of them have consumer debt, household consumer debt. And on the average, they've got 40% more debt than an average US adult. Whatever it is about this generation, they borrow it a lot. A lot of them are entering what we call the sandwich generation. This is where they've got kids they're taking care of and getting through school and getting through college, but then they've got aging parents at the same time. And sometimes some of their money has to go to support a parent or make up a deficit, an assisted living facility or something like that. And it's really, when you look back, it's the first generation that virtually has no pensions outside of the government employees and the teachers. But so many companies that had pensions like Gulfstream, no pensions anymore, and a whole lot of companies got rid of their pensions, the 401Ks replaced the pensions. And this is what Generation X is dealing with.

Ron Stutz (3:26)

Yeah. And in previous generations, it's like, you have this pension, but now it's like, okay, you run your own.

SPEAKER_1 (3:33)

We don't have to pitch anymore.

Ron Stutz (3:34)

So, you know, and the next generation I want to talk about is Baby Boomers. These are folks born between the years 1946 and 1964

We know something about Baby Boomers, and I know you have a lot of folks who fall into that category. What are their challenges?

Mark Howard (3:53)

Well, we do. And there's a lot of challenges, of course. We talked about them in the first segment with the high interest rates right now, the skirmishes. I hate that word. It seems so like a euphemism.

But what's going on around the world with the wars?

We've got a $40 trillion debt now that is certainly making it difficult for a lot of Baby Boomers, affecting inflation and so forth. Healthcare costs are really rising. And this is one of those things that I would love to see some solutions for. But healthcare costs are soaring. They typically go up more aggressively than inflation. We typically look at a healthcare cost like a nursing home. If somebody is 65 now, we know what a nursing home is now, we go ahead and add 3% of that per year, which might even be conservative to see what a nursing home might be or assisted living home might be when they're 80 or 85 And the numbers are staggering when you do that. But healthcare costs are a runaway train.