Is the Old Approach to Retirement Broken? A Millennial Guide to Financial Planning

The Money with Katie Show

Money with Katie

Self-improvement, Education, Business, Investing, How To

4.8 • 1.3K Ratings

🗓️ 15 March 2023

⏱️ 23 minutes

🔗️ Recording | iTunes | RSS

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Summary

Retirement is a new concept in human history, but the way we fund retirement is even newer. After all, the 401(k) and IRA were legislated into existence less than fifty years ago. To assume a millennial or Gen Z retirement will look anything like a boomer retirement might be wishful thinking—so this week, we’re exploring what might be a better way to structure our financial (and life!) plans. Learn more about our sponsor, TaxAct: https://www.taxact.com/moneywithkatie Transcripts can be found at podcast.moneywithkatie.com. — Mentioned in the Episode The Money with Katie 2023 Wealth Planner: https://moneywithkatie.com/new-2023-wealth-planner The history of retirement: https://www.theatlantic.com/business/archive/2014/10/how-retirement-was-invented/381802/ 1978 legislation on the 401(k): https://www.gpo.gov/fdsys/pkg/STATUTE-92/pdf/STATUTE-92-Pg2763.pdf Nat Eliason article on Type 1 and Type 2 fun: https://blog.nateliason.com/p/de-atomization-is-the-secret-to-happiness Replacement rate for retirement income: https://www.troweprice.com/personal-investing/resources/insights/how-to-determine-amount-of-income-you-will-need-at-retirement.html Bloomberg study on retirement: https://www.bloomberg.com/news/articles/2022-05-24/most-americans-say-1-1-million-they-need-to-retire-comfortably-is-out-of-reach?srnd=wealth-savings-and-retirement The 4% rule for retirement: https://podcast.moneywithkatie.com/the-most-dangerous-misconceptions-about-the-4-safe-withdrawal-rate/ Average social security check: https://www.bankrate.com/retirement/average-monthly-social-security-check/ The earlier you start investing, the easier it will be: https://ofdollarsanddata.com/go-big-then-stop/ Study on having higher debt when earning more: https://www.washingtonpost.com/business/personal-finance/you-may-be-surprised-by-who-carries-the-most-credit-card-debt/2019/12/20/3ea084e8-20f7-11ea-86f3-3b5019d451db_story.html Study from American Advisors Group on working in retirement: https://www.forbes.com/sites/palashghosh/2021/05/06/a-third-of-seniors-seek-to-work-well-past-retirement-age-or-wont-retire-at-all-poll-finds/?sh=5bda7b916b95 Compounding interest calculator: https://www.investor.gov/financial-tools-calculators/calculators/compound-interest-calculator — Follow Along at Money with Katie: https://moneywithkatie.com/ Watch on YouTube: https://www.youtube.com/@MoneywithKatie Follow Money with Katie! - Instagram: https://www.instagram.com/moneywithkatie/ - Twitter: https://twitter.com/moneywithkatie Subscribe to The Money with Katie Newsletter - Sign up for free today: https://www.morningbrew.com/money-with-katie/subscribe/2 Follow the Brew! - Instagram: https://www.instagram.com/morningbrew/ - Twitter: https://twitter.com/MorningBrew - TikTok: https://www.tiktok.com/@morningbrew Learn more about your ad choices. Visit megaphone.fm/adchoices

Transcript

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0:00.0	We've always been told to work in whatever capacity we can get for 30 years, preferably
0:12.0	a highly paid one, so we can save enough to GTFO of the corporate world as quickly as
0:17.7	possible and never work again.
0:20.4	But so much has changed economically for millennials and Gen Z compared to their Gen X and boomer
0:26.0	predecessors should retirement planning still be approached in the same way.
0:31.5	Or is it time to revisit this strategy?
0:41.0	Welcome back to this week's episode of The Money with Katie Show Rich Family.
0:44.7	Today we're talking about the tactical and not-so-tactical elements of planning for retirement
0:51.1	when you might feel like you're way too young to be thinking about retirement.
0:55.9	That could go wrong.
0:57.4	And you might be questioning why I wanted to talk about this topic because I'm still in
1:02.0	my 20s myself, but look, I've always been a planner.
1:06.2	There is nowhere I feel more at home than inside the cozy boundaries of a thoughtful agenda
1:11.9	complete with at least two backup plans, preferably built in a well-leabled Google sheet.
1:16.9	Which 2023 wealth planner anyone will link it in the show notes.
1:20.9	But for me, the best antidote to anxiety is a plan.
1:24.7	And while some people thrive under the pressure of an impending deadline, I would much rather
1:29.8	wrap up a month ahead of schedule so I can sleep soundly.
1:33.2	Case in point, I wrote the first draft of this episode in December of 2022.
1:38.8	So bearing that in mind, it's probably no surprise I became preoccupied with the ultimate
1:43.2	future plan in my 20s.
1:46.0	Because the second act of life requires a ridiculous amount of financial forethought, logistics,
	...

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