Episode 40 – Gen X: never too late to start saving for retirement
Episode transcript:
[music intro]
Jenny
Welcome back to Fund Your Future with DRS. And today, we’ve got a couple more Gen-Xers in our studio with us. And Gen X is often times referred to as the Lost Generation because it’s sandwiched between two much larger generations, the baby boomers and the millennials. But Gen X is kind of in this sweet spot where a lot of them are starting to think about and prepare for retirement.
So, we’ve got two of our DRS team members in the studio with us today, and we’re really excited to have you guys on here. So, Devi, you said you really feel that moniker of being the Lost Generation?
Devi
Yes. I realize that so many of my peers and friends that are of similar age to myself spent so much of our time figuring out who we were in the world, maybe jumping from job to job. Or, trying out different college courses or educational paths, just trying to understand who we were. And I think a lot of us came into ourselves or came into our own much later in life than other generations.
Corinne
I mean, I definitely agree with that because I’m on the younger side of Gen-X, because I’m 43. You know, I grew up without a cell phone. We barely used computers in school, and now I’m full-fledged, a grown up with a phone and a computer. So, it’s definitely different for me now.
Seth
I think we oftentimes forget how much demographics plays an impact in our lives or major life events. We’ve talked about, you know, generations that start in really economically challenging times or people that, you know, grew up in the depression, had a very different life than people who grew up in the in the late 40s or early 50s, who had many more economic opportunities.
And that, like, continues to play out for all of our lives. But sometimes you don’t recognize it until you look back and realize like, oh, I did bounce around from job or career and trying to figure out, like what I was going to do with my life. And I think a lot of that for Gen X, Jenny, as you were saying, there’s a lot of baby boomers in the workforce, and so maybe there weren’t as many career opportunities or career paths where people who are in a younger generation or older generation might have had different paths to follow.
Jenny
Yeah. So, we could just kind of start off, maybe share with us a little bit about what’s been your experience and being in Gen X and finding that career path, and especially as it relates to your finances and just budgeting.
Devi
Sure. I am 54 years old. I have been working since I was age 15. I spent a large part of my life working in the hospitality industry. And so, a lot of it was, tip based, kind of easy come, easy go. And so, I never really thought about saving for my future. It was also one of those things that people didn’t talk about at that point in time.
And then as I got a little older, had some education. I was involved in a career as a massage therapist for a long time. And so that is another career path that does not bring benefits with it. And so now I am here in my 50s and really starting to get serious about my retirement, which is a bit late to the game, but late is better than never.
Jenny
Yeah, I think that’s true. And do you mind sharing a little bit about how that kind of shift happened for you? Like you said, not really thinking about retirement, to then, starting to focus on that. Was there a particular “ah-ha” moment or…?
Devi
It was definitely around the time that I turned 50. I started to look at the trajectory of my life and start to take things more seriously. I felt that now I could see my future and my retirement and realized it was much closer than I ever thought it was before. When I was younger, even in my 40s, it seemed like I was just so distant and it was easy to get caught up in the day to day.
Just working, earning, living my life and then it was like one day I woke up and it was bam, like in your face, like a cat first thing in the morning. And I couldn’t deny it. So, I had to really start changing the focus of my life.
Corinne
I hate to say the exact same thing, but exactly the same thing as Devi. I worked in the restaurant business since I was 15 years old. Haven’t taken a break. I did try and try for state jobs for many, many years. I moved from state to state, applying for different jobs for the state. So, I was a restaurant manager, a bartender, you name it.
And so, I did live off tips I never once thought in those years, “oh no, what about my retirement?” And no one ever really said anything about your retirement, you know? From what I can remember, I just wanted to make money and make money and make money, pay my bills, hang out with my friends, you know. And it hit me like one day I woke up and I thought, “oh my gosh, I’m 38 years old and I have no retirement.
What was I thinking?” And then just it all fell into place. But getting a job for the state and learning about, you know, how I can save and additional ways to save. And I’ve learned a lot. So, I feel very grateful.
Seth
It’s interesting. I think we don’t talk about this a lot in our lives. I think because as public employees, oftentimes we have set salaries. We have much more predictable incomes. And what I hear both of you talking about is people at different stages in their lives, especially, might have much more flexible incomes. I think, especially in hospitality work, like for some people, it’s like you can make as much money as you want because you can just keep working.
There’s more shifts available. I can pick up a second job. And in that way, your work kind of adjusts to your lifestyle, as you’re saying, like, “maybe I only want to work ten hours a week because I want to go play and I’m going to live as cheaply as possible, or maybe I’m going to spend tons of money and I’m going to buy all these things, but I’m going to go work 80 hours a week so I can pay for it.”
There’s a lot more flexibility in your…or variability in your income. Sometimes that’s really scary. I think a lot of times it’s really scary for people, but it’s also it doesn’t have that built in culture of saving. It’s a built-in culture of spending and living. Yeah.
Jenny
Yeah, definitely. Because there’s not as many of those employers that are sitting down with their employees and talking about retirement and 401(k)s because they don’t offer it. Yeah. So, it’s kind of a good segue. But Corinne, do you want to kind of share some of those tips or as you were kind of figuring out retirement and where did you turn to…
Corinne
Well, I think the thing that taught me the most, because when I started working here, I was in the imaging department. So, we just scanned the mail and I had an opportunity to join the retirement specialist class. And, I mean, I think within two weeks I knew, like, “I need to put more money into this.” I mean, I have 24 years until I’m 65.
I’m going to retire right at 65. I need to make sure I have enough money to live when I retire. And my fiancé, he’s the same age as me, but he doesn’t have retirement at all with his job and he’s worked there 20 years. I’m like, I need to make sure that we’re taking care of. So, I think educating yourself and making sure you’re informed and speaking to your employer about, you know, can I put more into my retirement?
What can I do to elevate these things? I think those were things I learned in the class that really helped me plan for what’s going to happen with me in the next 23 years.
Seth
It’s interesting to me, it sounds like one of the things that really triggered for you was like having a specific date and being able to see, like, Devi, you kind of in your earlier answer, it was kind of the same thing. It was like, “oh, I can actually see and visualize that on the horizon.” And Jenny and I have talked a little bit about this, previously.
One of the things that always fascinates me and, and I’m sure both of you have experienced this in your work here as well. Police officers and firefighters really know about their retirement. And they think about their retirement a lot. But I think oftentimes that’s because they know their career is going to end. They can’t physically continue to do that job forever.
So, there is this clear transition. And for a lot of public employees, it doesn’t quite feel that way. Like “I’m a teacher, I’m just going to keep working because I love my job. This is like everything about my life. And so, I’m going to continue to do it forever.” And I think both of you, what I hear you say, like it’s really helpful to think about the transition, like what comes next.
And it’s sometimes hard to do that in your 20s and 30s because there’s so many more next before you actually stop working.
Jenny
Yeah, I think this is true for a lot of people. What you have shared that you kind of get to this certain age, usually in your mid 30s or maybe in your 40s or 50s, but then you start to see that point beyond the horizon and go, “oh my gosh, I need to start, start planning.”
Corinne
Yeah. And even if your job doesn’t offer it to you, start asking questions. Because I worked a job where I had no idea that I had retirement. And then I found out last year that I had an employee stock option as well. I had no idea and no one communicated that to me. So, my advice would be to ask questions, start trying to find out what you can do.
Jenny
Yeah, absolutely. Because we’ve talked about Roth options for those who are in the private sector. And how about you Devi? Do you want to share a little bit about some of your research and in starting to financially prepare for those milestones?
Devi
Sure. Well, I’ve realized the one thing you cannot get back is time. And so, if you don’t start investing early, then you need to really increase your savings and investments as much as possible. And so, I’m really focusing on minimizing my debt and cutting back on my expenses and increasing my savings, and adding more to my DCP so that I can have some liquid funds, for emergencies or unforeseen expenses in retirement, and then also have my pension.
Seth
So, I’m curious what you would consider or if you have thought about this, what the most unique financial challenge or opportunity for people your age would be? Devi, we can start with you.
Devi
There’s a couple of different things. One of them is just a lack of financial knowledge or literacy. In my household growing up, we did not talk about money. It was never discussed. And so I went out into the world not understanding how to create a budget. Anything about investments, saving for the future. I thought the stock market was for brokers who lived in New York and worked on Wall Street.
I didn’t realize that regular people could invest in stocks and make money for their future. The other thing I think maybe even more important, was unrealistic expectations. So, my generation saw our parents retiring at an early age or retiring with big pensions from their careers and also retiring with pretty low overhead. And so, I think that we underestimated the amount of money we would need to retire well and live comfortably.
Devi
And I think a lot of folks in my generation just stop working too early. And then years down the road, they have to go back to work, you know, because they’ve run out of money or they haven’t planned well. And I think that is probably a big, big piece of the puzzle for us.
Seth
I just saw some study about I’m going to forget the percentages, but it was something like a third of all workers retire before 65. But the vast majority of them, it wasn’t intentional, like they got sick. There was a disability. They had to care for an elderly family member. There were these things that were outside of their control.
And I just think your point is a really good one, that you don’t really know what the long-term future is going to look like. And having additional savings gives you more flexibility to maybe stop work early and then come back to work and but have that be your decision versus being forced upon you. Corinne, do you have other thoughts on unique challenges that your age group might be dealing with?
Corinne
I feel like inflation is a big one for my age group, because my first apartment was $650 a month, and now you can’t get a one-bedroom apartment for under like $1,400 a month here. So, I think inflation has a lot to do with how I budget, because it’s hard to pay for life these days. You know, you really have to think about, “okay, I can’t overspend.
I have to make sure that I have enough money for groceries in two weeks.” So, a big one in my life has been inflation. And how much the cost of things has gone up, especially here, because I grew up here. And then I moved to another state for ten years. And when I came back, the state was like a completely different state. Everything is so expensive. There’s apartments popping up everywhere, and I’m sure that’s the thing with everywhere. But I just notice it here because I live here and it’s crazy.
Seth
Inflation is really weird in that, like for most of our lives, and we’re all kind of similar age that it wasn’t something you really noticed that much because it happened so much more slowly. And then now just in the last few years, it’s been in many areas very obvious and I think it’s something like retirement planners have always talked about, “oh, you got to be aware of inflation.
You got to have money saved, that will continue to grow.” But for a lot of folks, it just wasn’t that obvious. Like, oh, gas went from a dollar a gallon to $2 a gallon. But it was over what felt like a decade, and it didn’t really impact your pocketbook as much as when it goes from $3 to $5 in three weeks.
You know, those sorts of dramatic changes really are tough, and especially when — both of you were talking about — trying to figure out your budget and savings and like having to rearrange things and being okay with that. Like, maybe that means I’m going to have to spend a little bit less, or where other areas I can readjust my priorities.
Devi
I think the pandemic really impacted the rate of inflation as well. I’ve seen the cost of common things like groceries just sky rise. You know, since the pandemic.
Jenny
And we talked a little bit about budgeting, do you maybe you want to share a little bit about how you like to budget? Do you prefer to use online apps or like, an Excel sheet or just…?
Devi
I love both of those options. I use an app. I love apps that help you round up and save money, and you don’t realize you’re saving, but I use those for short term things that, you know, like vacation funds or, you know, getting car repairs done. And so, I whatever extra I have, I’ll put an extra five, ten, $20 in there when I have it and it adds up quickly.
And it’s surprising how much those type of accounts really help you save. I also love using spreadsheets and looking at my budget and keeping an eye on things. And I would say another big thing to consider is health care costs in retirement and utilizing a health savings account. If you have it available, you know, VEBA or any other kind of flexible spending account, because I think those are going to be the biggest costs in retirement.
Jenny
And Corinne, how about yourself?
Corinne
Not that I’m an extreme couponer or anything, but I do use apps for coupons.
Jenny
Oh, nice!
Corinne
And that’s super helpful for me. I grew up not with a lot of money in in a single parent household. So, my mom always, you know, tried to make sure that we were well taken care of, but on a budget. So, I learned a lot from that. You know, not overspending, trying not to. I am a shopper, so I definitely like to go shopping, but I never buy something unless it’s on sale or clearance.
That’s like one rule that I have. So, I’m a big TJ Max, Burlington, Marshalls, kind of person, but I try to buy everything as cheaply as possible. That’s one thing that I’m kind of proud of.
Devi
You know, retirement is kind of like being on vacation. You want to take twice as much money and half as much stuff.
Corinne
Exactly.
Jenny
That should be our tagline for DRS. And then we’ve kind of touched on this a little bit, but do you have any advice for people your age who are maybe just kind of starting off with that conversation of, how do I save for retirement? How do I get prepared?
Corinne
When you set up your retirement, or if you have something that’s kind of like a DCP. One thing that I’ve learned is if I don’t see it, then I don’t miss it. So, start putting away your money to where you can’t touch it. I mean, coming from a shopper standpoint, I think that’s helped me a lot. Like once it gets to this amount, it’s a CD, put it away so you can’t have it. Yeah, keep it out of your mind. You know, out of sight, out of mind.
Jenny
That’s a great one. I like that one a lot too. I have a couple of things where it’s like, okay, every month I’m going to put $200 into this account, just have it go automatically on like the fifth of the month, so that that’s going to go towards saving for home expenses.
Devi
I take the squirrel approach. So, I have a lot of different accounts for a lot of different types of things. And so, I have these little pockets of money that I invest in and that’s really helpful. So, in some ways I’m planning for short term, medium term and long term, which is really helpful. If you haven’t started planning for retirement, no matter what age you are, don’t feel defeated.
Just start putting money away. Start creating a budget for yourself. Start looking long term and you’ll find that you get there faster than you realize.
Jenny
That’s great. And I think that’s why we wanted to start this podcast and get people thinking about it.
Seth
Yeah, just talking about it and making it, as you said, kind of at the start, there’s been a bit of a culture shift about being more comfortable talking about money and being just more open and honest and helps us all learn from what other people are doing. And maybe what you’re doing isn’t right for me, and maybe what I’m doing isn’t right for you, but you can maybe take a little nugget or two away.
And it’s been really great. So yeah, thank you. Thank you both for coming and sharing your stories with us.
Corinne
Thank you.
Devi
This is really great.
[music outro]
Disclaimer
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