#GreatWealthTransfer #BabyBoomers #wealth #inheritances #EstatePlanning
A few generations back, the parents of Baby Boomers turned, or were about to turn, huge amounts in inheritance to their children or other heirs.
Those parents had built usually modest homes for relatively modest prices, though they didn’t think so at the time. Much of that homebuilding was thanks in large part to the federal GI bill that was passed as veterans came home from World War II to start families and new lives.
Those modest homes increased in value many times over during that generation’s lifetime.
That gave the children of that generation a big chunk of wealth to inherit.
And, many of them did – big time.
Now, the Baby Boom generation has a bunch of wealth to pass on to its children – the GenXers and Millennials.
Wes Moss, who writes a Money Matters column for The Atlanta Journal-Constitution and has a similar weekly program on WSB radio in Atlanta, calls this “The Great Wealth Transfer.”
He discussed it in his column published April 24. 2022.
Moss writes that between $30 trillion and $68 trillion in wealth will be passed down from Baby Boomers.
To put that in perspective, the U.S. GDP (gross domestic product) for 2021 was $22 trillion, Moss writes.
When you take the 136 million people who are GenXers or Millennials, and you use the $30 trillion figure, that would mean each of those folks – statistically speaking — would get $220,000, Moss writes. We know that not everyone will inherit that much individually, and some will inherit much more.
Think you don’t have that kind of money in your family? Moss sites a person with a great aunt who died. The great nephew didn’t realize how much money she had. She was able to give all her great nephews and great nieces a nice chunk of change.
In other words, there could be that kind of money somewhere in your family, and you may not know it until a death occurs.
For Baby Boomers, this lesson brings about the need for proper estate planning. Yes, you may have more than what you think you have. How it gets distributed upon your death, or even before, should not be left to chance – or probate court. It would be worth the investment to draw out an estate plan, such as a will or living trust, to make sure the money goes where, or to whom, you want, when you want.
If you are a GenXer or Millennial, talk to your parents and other family members about how THEY want their estates distributed. Make sure that, if you believe you may have something coming to you, that your interest is protected.
Of course, if there are no heirs or your family members have not shown themselves worthy of inheritance, having an estate plan is even more crucial, so that your money goes where you want.
If you are transferring your wealth, get an adviser you trust to tell you how, when and to whom to give your assets – according to your wishes. Keep in mind that you should do all YOU want to do while alive with your assets. Don’t think about your heirs first. Think of you first.
Remember, too, that how, when and to whom you give will likely have tax consequences. Know those consequences, and what could happen if a mistake is made, well ahead of time.
It’s certainly great to reward loyal, loving family members or other heirs with your wealth. But if you think about you first, and plan carefully, all concerned should be, if not happy, assured that the distribution was done as you wanted it to be done.
Peter
Tag Archives: Baby Boomers
HARD TO RETIRE? WORK ON IT
#HardtoRetire #retirement #jobs #LeavingAJob #OtherInterests
It’s one thing to like a job.
It’s also one thing not to want to give up a business that you had founded.
But, eventually, there will be a time to go – particularly if you are 70-something.
In an article for the Washington Post, reporter Sindya N. Bhanoo discusses a couple of Baby Boomers who, even after they had “retired” officially, could not stop going to the office. The article was also published March 6, 2022, in The Atlanta Journal-Constitution.
What eventually got them to stay away? COVID-19 and remote working.
Of course, these gentlemen were important to their companies. They were highly respected, One had even sold his share of the company, but did not stop hanging around. Staff did not know what to do, how to approach him, whether he should participate etc.
This wasn’t just transitional. The guys just didn’t know how to retire.
There have been numerous stories about people, particularly those 55 and older, who were essentially forced to retire because of the effects of COVID-19, or other reasons beyond their control.
The problem was they were not ready, financially, to retire. In the people profiled in the article, money was not the problem. They were just so comfortable at their offices they didn’t want to leave.
We all long to have jobs we love. Many people do. Most will want to leave them eventually. They hope that when they do, they won’t have to worry about money.
Most people who love their jobs also have other interests they put on the back burner while they are working, intent on pursuing them when they have the time – and money.
That’s certainly a healthy way to look at work. Today’s work environment changes so often – and often radically – that a job a person loves suddenly turns sour. The work life they so embraced becomes difficult, even toxic.
The best thing a working person can hope for is that when it’s time to go, the worker can go on his or her terms, with a smile.
Not everyone – in fact, relatively few – can say that’s what happened to them.
You’ll notice the caveat “when it’s time to go.” The worker may not know when that time is. But he or she can seldom dictate when that time will come.
The lesson here is, if you like your job, stay as long as your employer or company will have you. When the company doesn’t want you anymore – it may not be a decision against you personally – you usually know it. Things will start to happen to make your life difficult.
Preparing throughout your career for that day, since you almost never know when it will be, is the most prudent action you can take.
If you dedicate your life to your job, try to find some time to develop other interests. That will make departure a bit easier.
If you have no interests other than your job, be confident enough in yourself to believe you will find other interests as time permits.
Jobs and careers don’t often end with a handshake and a party. But if you get the handshake and party – or even if you don’t — go quietly thereafter.
Peter
BANKROLLING ADULT CHILDREN
#AdultChildren #BankrollingAdultChildren #AdultChildrenLivingAtHome
Four out of five parents provide some type of financial support for their adult offspring.
They spend twice as much on them as they do saving for retirement.
Half of parents are willing to draw down savings, and a quarter would go into debt or pull from retirement savings to support kids who’ve left the nest.
These are facts according to a new survey from Merrill Lynch and Age Wave, a research firm, which provided the results to USA TODAY exclusively.
Janna Herron tackled this topic in a USA TODAY article that was also published Oct. 3, 2018, in The Atlanta Journal-Constitution.
And it’s not just giving them daily financial report. Parents pay rent for their kids. They pay for weddings and vacations. You might expect parents to pay for college, or loan their child money for a down payment on a house, but they also cover groceries, cell phones and other expenses, the article quotes the survey.
It had been predicted a few years ago that the Baby Boom generation would see the greatest transfer of wealth from their parents, largely because their parents’ houses had increased dramatically in value over their lives.
Now, it appears, that same Baby Boom generation is helping their kids, to a greater or lesser degree, live the lives they want.
As these parents struggle to have enough financial security in retirement, will their children be in a position to repay them for all they had done for them?
As we break this down, it helps to have some perspective. Just a few decades ago, job security was more prevalent. One could rent an apartment or buy a home in most locales for much less than it costs now.
Kids are graduating college with much more debt. They are postponing things like marriage because many of them can’t even afford to move out of their parents’ house. The jobs they have could go away tomorrow – and many have.
On the other hand, lifestyles are more expensive today. Years ago, one didn’t have all the gadgets that make life easier today. Not only do the kids today have them, they need them. It’s tough to survive today without a computer or cell phone, but they make life much more expensive than it was years ago.
If you are a young adult, you should seek to gain independence, financial and otherwise, from your parents.
If you went away to college, you probably had a roommate. Think about a roommate, or roommates, to make living on your own more affordable.
Watch your daily expenses. If you have a $5 a day coffee shop habit, get a Thermos and brew your own. If you buy lunch every day, think about brown-bagging it.
And, thinking further outside the box, think about using a few part-time non-work hours a week pursuing one of the many vehicles that can help you make potentially a lot of extra money. To check out one of the best, message me.
Remember, too, that Mom and Dad deserve the best retirement they can have. If they have helped you in your youth, it behooves you to help them later on, and pay them back.
Life as a young adult is different for you from what it was for your parents. That should not give you license to live off them forever. Because life is different for you, YOU have to learn to think differently.
Peter
THE DREAM OF BEING YOUR OWN BOSS
#BeingYourOwnBoss #entrepreneurs #BusinessOwners #freelancers
The trend is growing.
Americans say they intend to become their own boss, with all the flexibility that may entail.
According to MetLife study on employee benefits trends, 57 percent of workers say they are interested in becoming a freelancer, according to an article by Charisse Jones for USA Today. It was also published April 22, 2018, in The Atlanta Journal-Constitution.
The 57 percent, the article says, is up from 51 percent just last year.
Millennials were the most interested in such work, with 74 percent of those in that age group saying they were curious about becoming a freelancer. That compares to 57 percent of those in Generation X and 43 percent of Baby Boomers, the article quotes the study.
Certainly, the lack of job security working for someone else has contributed to this feeling. Younger folks can look forward to a work life of not knowing whether they will still have a job when the walk into work on a given day.
Younger folks, it seems, want more out of life than just working, working, working. But they may not realize that becoming a freelancer has many pitfalls.
First, until the U.S. can figure out how to make health insurance affordable, buying such insurance on the individual market is incredibly expensive.
Second, it’s been said that one doesn’t own a business. A business owns him or her. If you want to be successful as an entrepreneur, you can’t really tell yourself that you are only going to work X number of hours, with certain days off etc. You have to work when work finds you, and, you have to keep hustling to make sure you have enough work to make a living.
Third, there are duties that you have to do – or pay someone else to do – to keep your enterprise afloat. There is bookkeeping, keeping records for taxes etc. – the kind of work you may not like to do, or find boring.
In short, the flexibility you sought by not working for someone else may not be there for you.
Certainly, there are advantages.
There is something to be said for starting a business from the ground up, and making it successful.
Perhaps, eventually, it can be successful enough that you can pay others to do much of the work, so you can be more flexible.
Usually, though, that takes many years to achieve, and many, many hours of being chief cook and bottle washer.
Perhaps there is a happy medium – having a regular W-2 job that pays the bills, while using some of your own time – say, a few hours a week — building a business for yourself – one that potentially could allow you to eventually ditch the W-2 job and be on your own.
There are many vehicles out there that would allow you to do that. To check out one of the best, message me.
No matter how you decide to earn a living, there is good and bad about each. Independence is a lofty goal, but it’s not for everyone, or every situation.
Here’s a rule of thumb, as you contemplate how you construct your life: if it is to be, it’s up to me. Working for someone else has some benefits, but those benefits can be taken away at any time. Working for yourself has many benefits, but you have to know whether your skill has a market and, if you believe it does, be willing to go out to find it.
Write out your dreams for your life, then put together a game plan that will get you to those dreams.
Peter
TAKING THE LONG VIEW OF FINANCES
#millennials #BabyBoomers #economy
Home prices in Seattle are soaring.
So, Kathryn Jacoby, 30, and Jeff Whitehill, 32 came to a sobering conclusion: buy now, before prices went up further, or they may never afford to own a home. They bought a 72-year-old house for $550,000. It may be more than they can afford on their combined $110,000 annual income, but they felt time was not on their side.
George Erb wrote of the couple’s plight, and that of other millennials, in the Seattle Times.
Meanwhile, Rodney Brooks writes of how baby boomers are bridging the Generation Gap. His article for The Washington Post was based on Lori Bitter’s book, “The Grandparent Economy: How Baby Boomers Are Bridging the Generation Gap.” The book focuses how baby boomers may be taking care of several generations of their family, be they their parents or their children who may not have recovered financially from the Great Recession of 2008.
“The real story is they (boomers) may have two or three generation of people living in their homes that they were working their butts off to support,” Brooks quotes Bitter. That puts their retirement plans in some peril.
Both Erb’s and Brooks’ articles were published in the March 6, 2017, issue of The Atlanta Journal-Constitution.
Meanwhile, Ron Lieber wrote in the New York Times of financial trade-offs people make, whether they know it or not. Some take two or three jobs just so they can raise their kids in a certain neighborhood. Others experience life now, perhaps after the sudden death of a relative, lest they not get to do it again, etc.
Lieber’s article was published April 24, 2017, in The Atlanta Journal-Constitution.
Let’s break this down a bit further. If you are young, you need to be actively engaged in financial planning, including not only what you earn, but what you spend and what you save. The young couple in Erb’s article believed that housing appreciation was going to continue for the foreseeable future, so they extended themselves a bit to buy a house.
If that holds true, they’ll appreciate that decision later. However, there is much peril in the meantime. They borrowed $30,000 from Jacoby’s parents, and Whitehill has a $60,000 student loan to pay off.
Hopefully, they can pay down those debts and they will earn more income over time. The latter is far from guaranteed, making the former more difficult.
Rather than borrow money from parents to help buy a house, some young people are still living with their parents, as Brooks’ article discusses.
The point here is that all generations alive today face financial challenges. The trick is doing what you need to do to overcome them.
With technology and globalization throwing a monkey wrench into job security, people in all generations might want to think about ways to earn extra income, preferably without taking a pound of flesh from themselves, or having no time to really live.
There are many options available to accomplish this. To hear about one of the best, message me.
With job security far from assured, no matter in what field one is employed, financial risks become that much riskier. Still, taking no risk at all generally doesn’t get one very far. As long as the risks are calculated, and one plans accommodations to alleviate some of the peril, there’s no telling what the payoff can be.
Here’s wishing the millennials great financial planning skill, and baby boomers great coping skills as they deal with their issues.
Peter
BOOMERS VS. MILLENNIALS IN THE WORK FORCE
#BabyBoomers #millennials #GenerationsInTheWorkForce
“Managing multigenerational workforces is an art in itself,” says a quote from Harvard Business School.
“Young workers want to make a quick impact, the middle generation needs to believe in the mission and the older employees don’t like ambivalence. Your move,” the quote continues.
Eric Harvey and Silvana Clark have compiled a book titled “Boomers vs. Millennials: Listen, Learn and Succeed Together.” Half the book is written from the viewpoint of the millennials. The second half is written from the viewpoint of the boomers.
There is no right or wrong on either side, the authors argue. It’s just a matter of how different age groups see the world.
Millennials are tech whizzes. Boomers? Not so much. Millennials want things to happen quickly. They want to get immediately recognized for everything they do. They need constant feedback, the book says.
Boomers are a little more patient. They can be left alone without much feedback to get their jobs done.
Millennials look for a good work-life balance. Boomers can, and have, put their jobs first in many cases.
Regardless of your age group, we all want work to be rewarding. We all want to be paid fairly for what we do. We all want the time to have a full life and we all want to have enough in our elder years to feel comfortable about retirement.
Too often, jobs lack some of those provisions. Chances are, if you are paid well, you are working long hours. You are putting the rest of your life on hold to keep those paychecks flowing.
If you are not paid well, unless you have a certain degree of personal satisfaction from your work, chances are you are not happy.
It’s always good to find something good in any job, lest you do something rash and quit.
Boomers, and workers who are even older, have grown up with some degree of job security. Generally, if one worked hard and stayed out of trouble, he or she advanced at work. Millennials probably will not have that. They will go from job to job — sometimes by their own choosing, sometimes not — looking for the ideal situation.
Employers have to understand this phenomenon if they want to keep good people. The Harvey and Silvana book provides some insight to employers, as well as employees, to understand those from different generations.
If you are a millennial, and you bounce from job to job looking for the ideal, wouldn’t it be nice to have an income that is not dependent on a traditional, W-2 job? If you are a boomer, and approaching retirement age, wouldn’t it be nice to have an income that will augment what you will get when you retire? Wouldn’t each generation like to leave a legacy of helping others? In any case, you may find an answer at www.bign.com/pbilodeau.
We all have different needs. We may not always understand the folks from our children’s or our parents’ generation. But we all must work and live in the same world. It’s best if we try to empathize with each other, rather than criticize each other.
No one is right or wrong, the authors contend. So let’s accept each other for who we are, and try to understand where each is coming from. All will be more productive in that case.
Peter
GETTING OLDER? REIMAGINE YOUR LIFE
When we look at Jane Pauley, we think she has had a good life.
After all, she was the co-host of the “ Today” show and “Dateline NBC.” But, at age 63, her life is not done.
Pauley has written a book titled, “Life Calling: Reimagining the Rest of Your Life.” Reporter Kerry Hannon discussed the book in a Feb. 5, 2014, article in USA Today.
The book encourages Baby Boomers to look at life anew as they move into their 50s and 60s. Pauley’s book takes a look at career paths others have taken in the belief that you will learn from their stories, Hannon writes.
We are living longer. We are getting older. But that doesn’t mean we should think about packing it in, heading to the rocking chair and await death.
Sure, some employers are downsizing. Some see older workers as expensive and less productive, despite their experience. Perhaps you’ve reached your 50s or 60s, and your employer has said goodbye to you.
But Pauley’s book looks at that as a second chance. “We’ve been given a second chance – to do the thing we’d always wanted to do, or never had a chance before to do, or never imagined we could. I think of these as ‘trying times,’ a time to try new things,” Hannon quotes from Pauley’s book.
So getting the boot from your employer could be the best thing that ever happened to you, if you choose to look at it that way. Perhaps the message was to pursue your dream, spend more time on a favorite hobby – perhaps even turn it into an income stream.
You see, it’s not about circumstances, because most circumstances are out of your control. But you have absolute control over how you respond to those circumstances.
Getting older is one such circumstance. You can’t do anything to stop it. You can’t relive what was, in your mind, the best time of your life. You need to train your mind to believe that the best years of your life are ahead.
So what’s ahead for you, if you have passed the half-century mark of life? Perhaps it is starting your own business. Perhaps it is going back to school. Perhaps it is enjoying your children and grandchildren.
Whatever you decide, do it with joy. Do it knowing that the past has passed, and the future is bright.
Of course, some of you may not know what you will do next. Don’t approach that with angst. Approach it with optimism. Keep looking for the opportunity to be inspired. There are lots of great opportunities out there. For one of the best, visit www.bign.com/pbilodeau. You’ll see a bunch of happy people of all ages pursuing their dreams.
Some people get bored in retirement. Others use retirement to pursue things they’ve always wanted to. Retirement is not a precursor to death. It can be an impetus for a new life.
Remember, too, that it may take time to find that new life. It took Pauley four years, Hannon writes. It’s been said that it’s not the success that matters. It’s the journey.
It also goes for younger people who find themselves at a crossroads – between jobs or downsized out. The modern world encourages constant invention and reinvention. You can accept circumstances as fate and die, or you can accept circumstances as another opportunity for reinvention.
As you get older, you can find a new you.
Peter