If you are part of what is considered to be Generation X (like me), you likely know that you have 20 or 30 years until your so-called retirement at age 65 — or at least that’s what the government and most pension plans peg as a “normal” age of retirement. It seems everyone is always talking about retirement, especially in the media. However, we’re often too busy to listen, as we focus on other aspects of life, such as advancing careers, growing families and businesses, and sending kids to college, all while trying to accumulate a decent net worth along the way.
So why address a topic that is seemingly more appropriate for your baby boomer parents?
This whole conversation came about when I was speaking with a couple at a dinner party recently. They are in there early 40’s, own a successful business, and have done a good job saving. And thus, they decided it was time to meet with a financial advisor. The first question the advisor asked them was “When do you want to retire?” They didn’t have an answer. Asking a member of Gen X when they want to retire is like asking a 14-year old what they want to be when they grow up. If you were like me at this age, I was too busy crafting mix tapes for my sweetheart and dominating 8-bit Atari.
Let’s face facts - we’re not getting any younger. We’re well into our 30’s and 40’s. Life is happening fast. As a 35-year old financial planner that works primarily with Gen X clients, here are some questions that can help re-frame the conversation so you can actually attach some meaning to your money.
What do you want your money to do for you?
Money is a resource, not a goal. Most people have things they want their money to do for them besides simply “retiring”. You may dream of buying a vacation home or a new boat. Or maybe you want to start a non-profit, a food truck, or a yoga studio. Dream big, and use this as motivation to put a financial plan in motion.
After you leave work, what will your life look like?
Work optional! That has a nice ring, doesn’t it? For most of you Gen X-ers, you’d rather “retire” earlier and have the financial freedom to pursue your dreams before you become too old to actually enjoy your nest egg. This may be launching a business or traveling the world three months a year. Or, maybe you simply want to have the flexibility of working because you want to and not because you have to. Making smart choices with your money now will give you that freedom down the road!
Is creating and implementing a plan something you want to do on your own?
You should consider yourself the CEO of your family finances, and you need to run your household like a business and coordinate all areas of personal finance; cash flow, investments, insurance, taxes, and legal services. So, ask yourself this question, “Do I want to commit the time and energy to doing this job myself, or should I delegate this critical task?” What’s the first thing a smart CEO does? You guessed it, hire a CFO. In this one life, time is your most precious commodity. A long term relationship with a reputable financial planner can give you the gift of time.
Whether you do it yourself or work with a financial planner, take the time to make sure your money is aligned with your most important goals and values, and I’m confident you’ll find the motivation to create a solid financial plan, as well as follow through on making it happen!