Think about a time you were anxious about something, and it turned out to be okay—maybe even better than ok. That’s what happened with Dave and Katie. Dave, a 55-year-old Gen Xer, said he was increasingly anxious about planning for the future. His parents didn’t discuss money or retirement plans. So, he wasn’t raised to think about it. In his parent’s generation - life just happened, and they went along. Dave wanted to be more proactive about his finances than his parents. He watched YouTube videos and got tips from Twitter about different financial strategies. Still, he felt he was only scratching the surface.
Many Gen Xers Worry About Retirement
Dave and Katie are not alone. While their generation is pretty confident about handling their day-to-day finances, their biggest fear is their financial future. Gen Xers are most worried about retirement (21%), followed by saving money (13%) and digital currency (13%), according to research.
Dave has been actively working for nearly 35 years. He started working in his dad’s construction business right after college. He took over the business when his dad passed away. Katie has always worked too. Now that their kids have graduated from college and gotten married – they are focusing on their future.
While the retirement age can fluctuate depending on your state, it continues to hover around 65 years. With current Inflation, the cost of living is increasing, and wages are stagnating, making it harder for most Americans to plan their exit from full-time employment.
"Time is free, but it's priceless. You can't own it, but you can use it. You can't keep it, but you can spend it. Once you've lost it, you can never get it back." – Harvey Mackay.
Small Steps, Big Shifts
When Dave and Katie hit 55, they decided to get organized for retirement. This seemingly small step – “let’s get organized” started a significant shift in their lives. They still had a lot on their plates, but they felt a sense of urgency when their good friend passed away suddenly. They started to imagine what it might be like to relocate to be near their kids, have more fun, and work less. They knew they needed some expert advice to get a plan in place.
“Sometimes you will never know the value of a moment until it becomes a memory.” – Dr. Seuss.
When Dave and Katie hired a financial planner, they wanted someone who could help with the entire financial picture, especially taxes. They didn’t want someone to sell them things they didn’t need or pester them to manage their money.
As a result, they looked for an advice-only financial planner—someone with no conflicts of interest and who would be looking out for their best interests.
After getting to know Dave and Katie, their priorities and values, their advice-only planner ran thousands of possible scenarios. He brought a few possibilities for Dave and Katie to consider. This allowed the couple to settle on a plan they were genuinely excited about. Here’s a snapshot of what they could do:
- lower their expected lifetime taxes by hundreds of thousands of dollars
- increase their anticipated social security earnings by tens of thousands of dollars,
- know which accounts to draw from to receive their monthly “retirement paycheck.”
- start setting aside money regularly to self-fund any long-term cares need down the road.
But most of all, Katie and Dave found clarity and confidence and could focus on what they were genuinely passionate about.
Values Align: A Focus on Fun and Family
The planning process sparked conversations about having more fun and spending time with friends and family. In hindsight, they realized the stars were aligning. For example, they rented a house near their kids in Austin for two weeks and ended up buying the house they rented! Their daughter is expecting their first grandchild soon, and they will be in a position to be nearby. Each small step they took led them to the exact right next step, culminating in the achievement of their goals. For the first time in a long time, they felt like they were living their best lives.
It can feel intimidating to think about going from earning a paycheck and building a nest egg to having no paycheck and using those savings. There are ways to make this adjustment easier and even more enjoyable by getting organized and making the most of what you have.
Note: The above case study is hypothetical and does not involve an actual Mayfair client. A client or prospective client should construe no portion of the content to guarantee they will experience the same results or satisfaction if Mayfair Financial provides investment advisory services. Nothing in this hypothetical example should be viewed as tax, legal, or investment advice.