George Kamel - The Boomers Are Headed For Trouble… I Don’t Feel Bad About It

Episode Date: May 15, 2024

💵 Create a free budget. Sign up for EveryDollar today!   About This Episode The youngest baby boomers are facing a retirement crisis. In today’s video, find out how their problem could actually become yours and how to make sure you don’t end up in the same situation.  Next Steps 📗 New! FPU and Breaking Free From Broke Bundle   Offers From Today's Sponsors  This episode is also sponsored by Laurel Road. 💸 Open a high-yield savings account and make your savings work harder for you. Check it out here: https://www.laurelroad.com/george 🤑  This episode is sponsored by DeleteMe. 🔒 Remove your personal information from the web at JoinDeleteMe.com/George and use code GEORGE for 20% off. 🙌    🎙️ The Ramsey Show    🍸 Smart Money Happy Hour  💡 The Rachel Cruze Show  💸 The Ramsey Show Highlights  🧠 The Dr. John Delony Show  💼 The Ken Coleman Show  📈 The EntreLeadership Podcast     Ramsey Solutions Privacy Policy  Learn more about your ad choices. Visit megaphone.fm/adchoices

Yeah, yeah, I heard Wanda told me last Thursday at Bingo. Oh, hey, I got to go, Sandy. I'm getting another call. See at your walking club. Hello? My computer has a virus? You can help? Oh, thank goodness, yes, to verify my social's 867-5-3. Okay, that's enough boomering for one day.

But I got to say, it was cathartic, and I think it helped my arthritis. All kidding aside, I sometimes get accused of being a boomer in a millennial's body, Probably because of my conservative financial advice and generally cantankerous demeanor. Apparently I've got a real get-off-my-law and energy. But to be fair, it just got air-rated and I can't have those clover patches coming back. I already got that warning from the HOA. Anyway, we all know what a boomer is, but have you ever heard of a late boomer? These are the youngest of the baby boomer generation, Americans born between 1960 and 1965.

And they're the subset of our geriatric friends currently facing a retirement crisis. But listen, even if you're not one of these late boomers, their financial crisis could become yours. Oh, I certainly hope not, George. We'll talk about how in today's video, plus what you can do to make sure you don't end up in their shoes. Although, those planter fasciitis orthotic inserts, game changer. But first, hit those like and subscribe buttons and share this video with all of your friends who have boomer traits like I do. You know, the ones who eat dinner at 4 p.m. and are part of the Wheel Watchers Club. If you know, you know.

Actually, I don't know. So here's the crisis. According to new research, late boomers have much less retirement savings than older boomers and war babies, generations born between 1942 and 1959. And they also have less wealth altogether. Whomp? So how did this happen? Well, before you start pointing fingers, it's actually not all the boomers' fault.

They may have survived smoking on airplanes and cars with no seatbelts, but a good chunk of these late boomers didn't fare so well in the Great Recession. You see, during the 2007-to-Mid 2009 financial crisis, the late boomers were in their mid-to-late 40s. a.k.a. what should have been their prime earning years. But instead, joblessness was up, home values were down, and the stock market lost more than half of its value. So their 401ks looked more like 201Ks. Am I right? Yeah? Okay. On top of that, a lot of these late boomers were the very ones who lost their jobs.

In fact, 98% of late boomers surveyed said they were working at age 44. But by age 50, only 77% said they were still in the workforce. So it seems that a lot of late boomers left the workforce early and just never went back. Again, in what should have been their peak earning years. But you know what, young folks, late boomers walk so that you fire people could run. These people were the accidental pioneers of the fire movement, except it was more like a financial, not so independent retire way too early. Yeah, the acronym is not acronyming here.

And even if they did keep working or eventually got back to work, a lot of them ended up way behind on their 401K contributions. Missing out on their peak earning years also meant missing out on their prime retirement contribution years. And again, it's not entirely their fault that they ended up there. They couldn't control what was going on in the economy. But you know what? I still don't feel bad for them. And here's why.

They could control how they responded to what was going on. Remember, you're responsible for your retirement savings. Even if things don't go the way you planned, you need to respond accordingly and do what it takes to make sure you're not up a creek in your golden years. And yes, there's Social Security, but that will only get you so far. According to the Social Security Administration, the benefits are only meant to replace about 40% of your income from when you were working. So before you stop working, you got to do the math to make sure you have enough to retire. And never, ever rely on Social Security as your retirement plan.

Think of it as icing on the congealed salad if you even do get it. Sorry, just pictured it. And remember, you don't have to do this alone. You can meet with a financial advisor to help you figure out a plan. Just know that the plan might include working a little bit longer so you can, can, you know, have some money. It's my money, and I need it now! Now, even if you're not one of these late boomers,

their retirement crisis could actually end up being your crisis, which is something nobody wants. First of all, if this is your mom and dad we're talking about here, you're probably going to end up taking care of them, not just as they age, but also as they run out of money. Healthcare costs go up as they get older, and long-term care is expensive. The typical cost of just one month in a nursing home in the United States

is $8,910. We're talking six figures a year. And we're starting to see more aging parents move in with their adult children, which honestly sounds kind of fun because now you get to take away their allowance when you catch them sneaking out of the house at midnight. You're in big trouble, mister, and I'm in trouble with the capital. But if this is the case for you, you'll need to factor taking care of your parents into your financial plan, which could put a damper on your prime earning years.

And here's another way this could end up being a problem for you. According to the U.S. Census Bureau, by the year 2035, for the first time in U.S. history, there will be more adults 65 and older than kids 18 and under. Now, that's a lot of people getting Social Security benefits for a lot of years, if the program is even still around. And it's our tax dollars funding those benefits. So even if your parents aren't broke boomers, their retirement crisis could still end up costing you if you're a taxpaying American.

Now, like I said earlier, this isn't entirely the late boomers' fault. The Great Recession legitimately had a negative impact on a lot of people's finances. So how do we keep from finding ourselves in the same situation if things happen that are outside of our control. Well, there are two big things you can do. The first one is to get control of your money through the Ramsey Baby Steps, which is the plan I used to pay off my debt and build wealth. And if you've been following this plan and you're on Baby Step 4 or beyond, that means you'd have no debt other than your mortgage and you'd have an emergency fund of three to six months of expenses. So you'd be in much better shape when your face was something like an

unexpected job loss. And even if the market's tank for a while, you won't find yourself dipping into your retirement savings to survive or scrambling because you're upside down on your mortgage. And by the way, a great place to keep your emergency fund is a high-yield savings account where you can earn some sweet interest. I mean, you're basically making money while you sleep with these things. And that's why I love what online bank Laurel Road has to offer. Not only where your account balance earn 5% APY right now, but there's a ton of other great perks. No minimum balance, no monthly maintenance fees, and your deposits are FDIC insured. It's time your money started making money. So go to Laurelroad.com slash George or click the link in the description to get started.

And tell him George sent you. Or I guess just use the link because it has my name. They'll probably know I sent you. Now, I don't know if you know this, but seniors with money are a prime target for online scammers. But it's not just me ma' and pop pop getting conned by cybercriminals anymore. It's also millennials and yes, even Gen Ziers. So make sure to keep your personal info away from scammers, spammers, and big data brokers. And for that, I use and recommend Delete Me. They scour the internet and these creepy people finder sites and they remove your info from hundreds of these data broker sites and they send you an easy-to-read report outlining what they did. So help protect yourself from the risks of identity theft and online scams with DeleteMe.

And right now you can get 20% off by going to join DeleteMe.com slash George or just click the link in the description. Okay, the second big thing you can do to avoid a retirement crisis, don't retire too early. Sorry, not sorry, but you got to work until you don't. Until you're assets are generating enough money to cover your monthly expenses and then some, you are not ready to leave the workforce. And you fire people might want to listen up here. You might have enough now, but you don't know what the future holds. I mean, aside from hair loss and orthopedic clocks. So there's one other thing we haven't covered yet. What if you are one of these late boomers and you're in financial trouble? If you or a boomer you love is in this crisis, here's what to do.

If you're the boomer, the main thing is don't lose hope. I know that might sound hokey, but you might need to adjust your expectations about what retirement's going to look like for you, but there's still things you can do. If you're not working, you may need to rejoin the workforce or find a way to make some extra money, even if that's working part-time. You also need to make sure you're actively and aggressively working those baby steps to get out of debt completely. It's really hard to retire when you still owe people money.

Now, once you're there, max out your contributions to your retirement account. Take advantage of catch-up contributions and make sure that you're talking to a financial advisor who could help you make a plan that works for you and your goals. Now, if a boomer you love is in the situation, be brave and talk to them about it. And yes, it's going to be awkward, like the time you showed up to your friend's wedding wearing chubbies. But to be fair, it was on the beach, and I thought it would be fine, and they never sent a dress code, and that's on them. It's worth having this uncomfortable convo because this is important. Connect them with a financial advisor if they don't already have one, or talk to yours about how you can help.

And make a decision about how you or your family will or won't help support them. You've got to land on this. Maybe you and your siblings decide to help cover some of their expenses. Maybe you need to draw a boundary and stick to it. Maybe it's both. And if it's your parents who are in the situation, remember, money problems are not genetic. Unlike male pattern baldness, this is a pattern you can actually break. So start doing the right things with money, and who knows, maybe you'll be the first person in your family to become a millionaire.

Either way, don't lose hope and do not give up. Choose to do something about it. And if you need a good place to start, be sure to check out Financial Peace University. It's a nine-week class that will teach you step by step how to budget, beat debt, save money, and build wealth for the future. And in the month of May, you can get FPU and my new book, Breaking Free from Broke, all together for just $7,99. That's a killer deal. And by the way, this bundle also includes three months of the premium version of every dollar, which is my favorite budgeting app. So this is a great deal for you, and it can make a great gift for someone you love.

I'll drop a link below. Thanks for watching. We'll see you next time.