The world is obsessed with Millennials. Thank you Snapchat.
The largest, most diverse generation cohort in the U.S., born between 1980 and the mid-2000’s with a social spoon in their mouth, dominate the app economy and the media attention graph. There’s talk they may even be able to save the U.S. economy — if we’re #lucky.
But what about us, the proud “I want my MTV!” Gen Xers? Is all our hard-earned money for nothing :(
Retirement is slowly creeping us, rearing its ugly head, like a video in the night. Results from an Ameriprise Financial Retirement study on Generation X point to a new and evolving vision of retirement where traditional ways of thinking may no longer work. The time is now to get serious about planning our financial futures, since those of us born between 1965 and 1980 are turning 50 and working well into our mid to late 60s, even snapchatting with our Millennials cousins at some distant point in the future.
So listen up all of my fellow Gen Xer Madonna fans, don’t just stand there, let’s get to it! Here are ten retirement tips for ladies with an attitude:
1. Stop telling yourself you can’t do this, because you can.
I am going to challenge you to know exactly what it going on with your money and your life. Not all at once. Begin to examine all of the places where you take money in and let money out. That includes your checking account, savings account, credit cards, mortgage, auto loans, school loans, 401(k), Roth, HSA, etc. You’re smart enough to get this information albeit you’ll have to go to multiple places to find it. Just make a pile so it is corralled all in one place. Why? Because where you are today determines the specific set of actions needed to get to tomorrow.
2. Invest in yourself, especially your health and your relationships.
Don’t underestimate the multiplier effect of a healthy lifestyle, daily exercise, and a positive outlook on your career mobility, earnings potential, future business opportunities, and overall bottom line. Nutrition, sleep, and exercise are not just connected to your Fitbit but finances as well. The quality of your relationships is also major predictor of health, as was discovered by Dr. Robert J. Waldinger, a Harvard psychiatrist who performed the longest and most complete studies of adult life ever conducted. The study’s major finding: Good relationships keep us happier and healthier (and I say wealthier) in later years.
3. Paint the picture, before you do the math.
While doing the math is super important for retirement planning, the vision of what that looks like is even more significant. You need to imagine all aspects of your future self and clearly define the life goals most important to match the plan. The concept of life planning is nothing new however few of us, myself included, devote an entire day to the process, making it intentional by design and as comprehensive as it should be. How would you like to change that? I am working on my own life plan right now can recommend a great program designed by Michael Hyatt and Daniel Harkavy called Living Forward. Why don’t you join me?
4. Make sure you have hard, cold cash, before you invest.
Start saving for that rainy day because I guarantee, you’re gonna need it. Sock away a minimum of six months, ideally twelve, of living expenses in a regular checking or savings account at an FDIC (Federal Deposit Insurance Corporation) member bank (hint: look for the FDIC logo). Do not invest this money. It needs to be completely liquid, by that I mean you can withdraw it immediately from a local bank branch and use it pay your bills online. Keep in mind this money is also FDIC insured. This means that if your bank fails, the first $250,000 in your account is insured by the FDIC and will be returned to you in the event of a bank failure.
5. Find a way to accelerate retirement savings, big time.
Having the big 5-0 Partay this year? You can supercharge your retirement savings by depositing up to $24,000 into your 401(k), since the federal government provides a catch-up contribution of $6,000 to the usual $18,000 contribution limit. Furthermore, most of us have either a 401(k) or a 403(b) retirement savings plan at work and some workplaces may even offer a company match between 1 to 3%. Take advantage of this free money, if it is available and you are eligible for the program. Retirement savings this year may also be accelerated with an additional $6,500 (ages 50 or older) with a Traditional IRA and/or Roth IRA – restrictions apply, make sure to consult with a financial professional before you invest. Related: Roth to the Rescue, Four Uber Awesome Benefits The more you put away, the better.
6. Go mobile with your investments, monitor your money.
Don’t just check into Facebook but with your money on a regular basis. In today’s smartphone economy, you should have mobile accessibility to all checking, savings, and investment account information, not to mention trade confirmations and other important notifications such as tax documents by email. Only use the apps provided by your bank and/or financial institution such as TD Ameritrade and Fidelity and put a password on your phone for security reasons.
7. Attack your credit card debt, aggressively.
According to CreditCards.com the average APR (annual percentage rate) on retail credit cards has risen to 23.23%! These high and outrageous interest rates will reduce the amount of retirement funds that could have been invested and compounding over time and deplete your cash quickly if you’re not careful. Also, be sure to get a copy of your credit report each year to ensure that all the information is correct and up to date. Federal law allows you to get a free copy of your credit report every 12 months from each credit reporting company – Equifax, Experian, and TransUnion at annualcreditreport.com An effective strategy is to put your credit cards on ice (in the freezer) as you work towards paying off the debt as quick as you possibly can. Watch Our YouTube Video: Freeze Your Credit Cards
8. Make prudent investing choices, align your decisions.
Every decision you make in your life has an overall effect on your wealth, either positive or negative. Make investment choices that are smart, not made on the basis of emotion but on concrete data and facts. Look at your entire life picture and pay special attention to how much risk you may inadvertently have in your total investment portfolio. Do the numbers and closely examine the financial ramifications of each major life decision – a divorce, mortgage, education, new business, vacation, car, change of career - before you make it. Align spending, investment, and life decisions with your personal goals and things most important to you.
9. Begin to educate the NextGen, the Millennials in your life.
Gen Xers can remember a time when talking about money was taboo. We simply didn’t have these types of conversations at the dinner table. That’s no longer the case. We all have an obligation to pass along our financial know-how with the next generation, particularly if they are listed as beneficiaries on an investment account. Begin the education process early and be sure to acclimate your beneficiaries to the concept of investing and what it means. Invite them to Skype or FaceTime with your financial advisor and help them get started with their own investment account, no matter how small. SheCapital is happy to help :)
10. Work with a financial advisor you know, like, and trust.
You deserve to work with someone who understands you, cares about who you are, and treats your relationship with care and respect. Finding that right person to work with is not always easy and takes time. Start by asking your friends, family, and people you work with on a regular basis. Once you have the name of a potential advisor, research their company and background on the U.S. Securities and Exchange Commission website sec.gov Conduct multiple interviews, over the phone and in-person. Do not sign anything until you are absolutely sure you want to work with them. Make certain to ask the following questions as you evaluate the relationship and any potential conflicts of interest: 1. How does she get paid; 2. Does he receive commissions; and 3. Is she a fiduciary or a broker? A fiduciary, registered investment advisor or RIA, like SheCapital, is required by law to put the client’s needs before their own. Unlike many, we do not accept commissions nor sell commissioned investment products.