Milestones | Retirement Communication & Monday Musings

Delaying Milestones: According to a recent Pew Research Center analysis of Census Bureau data, young adults in the U.S. are reaching key life milestones later than they did 40 years ago. Adults who are 21 are less likely to have reached five frequently cited milestones: having a full-time job, being financially independent, living independently, getting married, and having a child. By age 25, today’s young adults are somewhat closer to their predecessors in 1980 on two of these milestones: having a full-time job and financial independence.

One factor contributing to these numbers is that almost half of 21-year-olds (48%) are enrolled in college, whereas only three-in-ten (31%) were enrolled in 1980. With more in college, there are fewer with full-time jobs. By age 25, the differences between 25-year-olds today and in 1980 are narrower but still statistically significant. About two-thirds of 25-year-olds (66%) worked full-time in 2021, compared with 73% in 1980. And 60% were financially independent in 2021, compared with 63% in 1980.

About 88% of U.S. parents surveyed who have children younger than 18 say it’s extremely or very important to them that their children grow up to be financially independent and have jobs they enjoy—far higher than the shares who prioritize their children getting married or having children of their own.

What do you think? Where would you put emphasis and priority? If you have children, thinking through these things also affects your financial planning.

Communicating Retirement Plans: Some thoughts from advisor Glen Gangewer—

My wife and I have recently become empty nesters, which has us looking toward the next part of our planning. While we still have time and control over our lives before health or other issues may arise, how do we communicate our retirement plans to the people who will be most affected by our decisions, for our benefit and theirs? How much detail you choose to share will depend on several factors. One thing that is clear is that we need to be deliberate in our planning and communication of our financial matters. Areas to consider are:

• Housing: Stay put, downsize, move to another state, choose a retirement community or continuing care community
• Financials: 
  Debts (mortgage, HELOC, reverse mortgage, or another type of loan)
  Investments (account types (trust, taxable, IRA, Roth IRA, etc.) & custodians) Social Security incomes, Pension benefits
• Insurance: Life insurance, health insurances (Medicare, supplemental insurance, Medicaid, etc.), and long-term care policies
• Estate Plans: Wills, durable powers of attorney, living wills, and health care powers of attorney

How much you divulge is up to you, but you can certainly mitigate unpleasant surprises when you organize all your specifics together.

Here is a link to a resource called Peace of Mind Planner or touch base with your financial advisor about your situation.

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Business Briefing:

• Debt Ceiling Suspension: On Thursday, the Senate voted 63-36 to suspend the debt ceiling for two years and reduce government spending, sending the bill to President Biden’s desk and averting an unprecedented default on U.S. financial obligations that could have hit as soon as Monday. (The Wall Street Journal)
• Vanguard Fined: The Financial Industry Regulatory Authority (FINRA) fined Vanguard Group $800,000 for overstating projected yield and projected annual income for ninety money-market funds. The error appeared in 8.5 million account statements. FINRA said Vanguard sent out statements containing the errors for nearly a year and reported that the errors occurred when automated data stopped overwriting existing data. (The Wall Street Journal, Reuters)
• Job Openings Increased in April: U.S. job vacancies unexpectedly surged in April, according to the Labor Department’s Job Openings and Labor Turnover Survey released Wednesday. Available positions rose from a revised 9.75 million in March to 10.1 million in April. The report bumped up expectations that the Federal Reserve would raise interest rates again in June to cool the economy rather than pausing as inflation again shows signs of easing and trouble in the banking sector creates concerns about the economy’s health. (Bloomberg)

Monday Musings: We are consistently reading and considering different viewpoints, looking out for what applies to financial worldviews and inspiring us to live better lives. Here are a few we’ve come across lately. What do you think of these?

• “The fastest way to get rich is to go slow.” (Morgan Housel)
• “It’s good to have people in your life who you don’t want to disappoint.” (Warren Buffet)
• “It’s amazing what you can accomplish if you do not care who gets the credit.” (Harry S. Truman)
• “The world has not yet learned the riches of frugality.” (Cicero—during his governorship of the Roman province of Cilicia, he applied the principle of frugality, making him immensely popular among the local population)