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Welcome to How to Retire on Time, a show that answers your retirement questions. Say goodbye to the oversimplified advice you've heard hundreds of times. This show is about getting into the nitty-gritty so you can make better decisions as you prepare for retirement. Text your questions to 913-363-1234 and we'll feature them on the show. Don't forget to grab a copy of the book, How to Retire on Time, or check out our resources by going to www.retireontime.com.
Welcome to how to retire on time, a show that answers your retirement questions. Say goodbye to the oversimplified advice. This show is about getting into the nitty gritty so you can determine what is right for you. My name is Mike Decker. I'm a fiduciary financial adviser, and with me is my associate, David Franson.
Mike:As always, text your questions to (913) 363-1234, and we'll feature them on the show. David, what do we got today?
David:Hey, Mike. How would you plan retirement if your kids still live at home? Do you run into this often? Is this a
Mike:Yeah. Yeah. All the time.
David:Are people just retiring at a younger age, or how are their kids still at home? That's my question.
Mike:Yeah. So let's address the elephant in the room.
David:Alright.
Mike:Why are kids at home? Why are kids struggling today? Anyone that's 30 years or older, it is a very polarizing kind of like, oh, kids are helpless today. That's just not an accurate depiction of what's going on. Okay?
Mike:So today, the average wages for someone getting out of college is not even close to comparable from an affordability standpoint to those that were in the fifties, sixties, seventies, eighties, and even nineties. A home was affordable at minimum wage back in the day. It's not today. Even rent. There's a good chance you're gonna have to travel way outside of where jobs are just to afford a place to rent or to live.
Mike:So people today are starting out not disadvantaged. I don't wanna play the victim card in any way here, but it's going to be a more aggressive uphill battle. It is a more competitive environment. More people have gone to the colleges and earned a degree, but the degrees may not all have as much practical skill sets that translate into the workforce. Okay?
Mike:So there's another disadvantage here of a lack of career preparation to the masses. Now, yes, if you wanna become an attorney, you wanna become a doctor, like those certain skills, you can more easily, but not easily, get into the workforce. But notice how if you wanna become a doctor, if you wanna become an attorney, if you wanna become an engineering, and like get a master's in engineering, if you wanna become a CPA, these specialized jobs, it's not just a four year degree, it's a four year degree, and then additional education and licensing that's very difficult. So now let's take that same mindset and apply it to all of the other careers. If you want a job in sales, how do you really build up the curriculum or the proof in the pudding that you're in sales?
Mike:How do you really figure out you're a marketer, and you're looking for your first round of marketing. Yeah. You've got this kind of portfolio, but it's it's just there's a ton of people competing for very few jobs. So that's one kind of problem, and those jobs, the wages haven't kept up with inflation. In addition to that, you also have to consider, just for a moment, that AI is replacing most all entry level jobs.
Mike:Mhmm. That's another difficulty that people are going to have to overcome. Now for all of those that maybe college failed them, and I know many people have told me college failed me. It didn't fail you. There's a lack of planning.
Mike:I'm not saying that's your fault. That's what you were sold. You were sold the idea that college is gonna get you a job. It's just not true anymore.
David:Yeah. It used to be, but not anymore.
Mike:Used to be, but it's not anymore. And then so you have all of these factors that are playing against people. You just need to understand it's different. A lot of people like to blame the idea, oh, well, millennials and gen z or whatever, they're just lazy. Some are.
Mike:There's a lot that are not. Oh, well, they're just not working as hard. Some are, and some are not. So let's get rid of the semantics of overgeneralizing the entire generation of people, and understand that a portion are working their butts off to try and get ahead of life, and a portion are not. Now let's forget about the ones that are playing the victim card for a moment and talk about the ones that are really trying to get ahead in life.
Mike:Okay? For them, you need to look at the behavior. When I say the behavior, are they working their butts off to get ahead live, or are they going to work, or applying kind of part time, and then just letting the chips fall where they lie? Because the reality is, today, a more competitive environment today for the few jobs that are available, if they're not working round the clock on emotional intelligence, if they're not working around the clock on developing their skill set, if they're not working around the clock in all of these other areas to make them more competitive to get a well paying job, then I would question the helping them be a part of your retirement plan. And here's why.
Mike:I think the average household income is, like, 88,000 a year. It's hard to live off of that nationally. Now that's oversimplified because here in Kansas, that would be a lot easier to live off of than, say, San Francisco or Seattle.
David:Right.
Mike:K? So there's variation in the jobs and and the wages. But to get ahead in life, you've got four quadrants of everyone's life. You first got your your personal self, so, you know, working out, exercise, taking care of yourself. You've got your professional, so developing a skill set and working somewhere.
Mike:You've also got your family, and then you've got your social. Okay? Now think about just for a moment what a doctor goes through. Doctors are well paid, but they sacrifice their family and their personal and their social and dedicate their life for years to develop a skill set to get ahead in life professionally.
David:Yeah. I have a friend that I know very well that went through medical school, and he gave me some statistic, and I can't remember the exact stat, but that so many marriages don't survive medical training. Because it's so gruesome.
Mike:Yeah. Now just take for a moment, what if your kid wants a career in sales? Which by the way, sales, when done right, is a very important career. It's a very high paying career. Mhmm.
Mike:Okay? What maybe your career wants to be in marketing. You wanna be a graphic designer, which is a very wonderful, could be high paying career. Maybe your kid got an English degree, and wants to be a copywriter, or whatever it is, and that's really what they wanna do. Okay?
David:It's their passion. They're good Now at
Mike:what if they just go along the motions, they show up to whatever job they were able to get, and just kind of expect things to work out? Kick them out of the house, and let them figure out life how it really is gonna be. Yeah. But what if for just a moment, they gave up a large part of their social life? They sacrificed their own personal well-being, and, you know, still try and help them eat well.
Mike:Maybe they can go for a run or whatever. But what if they were like a doctor in that they sacrificed their personal, their social, and their family to some extent and focused all on their profession. Those kids, if that's what they're doing, have them be a part of your retirement plan, keep them at home, because they have the best chance of getting ahead in life. It's that grit. You have to have that tenacity, and in those situations where they're really focusing, they're spending money in extra classes, extra training, yeah.
Mike:Don't kick them out of the house. Don't call them lazy or pathetic. They're the ones that are gonna beat out the competition. Mhmm. The rules have changed today.
Mike:In college, don't be scared about helping a child establish itself, but expect them to treat their development, to create a foundation like as if they were working like a doctor. I cannot say that emphatically enough because you don't just get to play along and get wealthy in America anymore. All of the jobs that allowed that lifestyle to exist have been exported to other countries. That's what globalization looks like. When we became a global economy and other countries and other people were willing to work for less than the American was, all of the entry level jobs kept going out.
Mike:Now AI just cut out the other ones. So you now have to develop yourself, which is more difficult to do because college doesn't really prepare people, in my opinion, for this. You have to kind of go to college and do all this extra work, so that you're not applying for an entry level job, but you're applying for a job that's almost like two, three, four, five years into the experience, and that means you're hiring personal development coaches, or you're taking additional training, whether it's emotional intelligence and how to work with people, leadership training, it could be additional skill set and so on. This is career planning. Doesn't mean that it's wrong.
Mike:It means that it's just different. So don't expect any of your kids to take the same path that you did. Times have changed, but the American dream is still alive. You just have to do it differently. So the question is, how do you plan retirement if your kids still live at home?
Mike:Yeah. Do they show healthy behavior that they really want to get ahead in life, or are they just showing up and trying to live off the experiences and the lifestyle and kind of just you have to differentiate the two. And I highly recommend, if you don't know kind of where that line is, get a counselor. You don't need to have your kid there. Talk to a professional that isn't going to just kind of give the kid a get out of jail free card, and say, oh, well, they're trying, and they're struggling, and here's some anxiety, and here's some medication.
Mike:You want a counselor that's more like a coach that's gonna allow pain to be in the relationship, where you're gonna hold boundaries with civility, that you're gonna allow them to grow. All growth is painful, and I have these conversations often with clients. How do you structure the household so kids can come in, they're welcomed home, they're safe at home, but it's not a vacation at home? You don't need to charge rent. Sometimes that makes sense, sometimes it doesn't.
Mike:But you need to understand where are they going and what behavior supports the decision. Do they stay at home, or do you allow them to experience pain and let the world teach them certain things? You can't fix your kid. Do not expect that to happen, but you can create the environment and hold them accountable so that they can grow.
David:Yeah. If your kid is gonna be home for a few years early in retirement, do you have to change your, like, cash flow plan?
Mike:I mean, the food budget typically goes up, but it's not your responsibility to be taking your kid on vacation with you.
David:Oh,
Mike:right. It's not your responsibility to be taking kid out to dinner. Your job is to give them food and shelter. And even then, you could still charge them for it, but it's making it more affordable so that they can go I mean, imagine your kid maybe had an English degree and just hasn't been able to apply it well, but now wants to become an electrician. Awesome.
Mike:It might be financially difficult for them to become an electrician, so maybe they come in for a couple of years as they're going through the schooling. Do you see how there's a clear plan and path? Yes. There was a discussion, like, know what they're gonna do. That's what you're looking for, is that kind of clarity.
Mike:What you're not looking for is, well, I kinda wanna you know, maybe I'm gonna be a shrimp farmer. Yeah. I'm gonna try that out, and then they come home and it doesn't really work, and then they change the idea, I'm gonna be a holistic chicken farmer. And then they try that and it doesn't really work. Those are red flags.
David:That sort of aimlessness or
Mike:Yeah. That's one that's very dear to me. I really appreciate what he said. He said, I hated every second of my career, but I did it because it paid well, it provided for my family, and I was able to do it in support of my family. I was able to be there for the moments that mattered for my family.
Mike:Let's get rid of this idea that every moment in your career is sunshine and roses. Allow them to pick a not a practical career. I mean, it could be anything, but it's practical, and it supports the lifestyle that they want, that there's reasonable expectations. That they're not saying, well, I wanna work forty hours a week and make $203,104 100,000 a year, which is an expectation today. It's not that way.
Mike:So these are very normal conversations. If they feel uncomfortable, it's because they are, but don't avoid it. You need to understand this could be a part of your retirement plan, and it's okay. It is absolutely okay. Just make sure you're holding boundaries with civility, you're not enabling, and that you don't feel like you have to give more than is appropriate.
Mike:They're adults, and they should be treated as such because if they're not, you're only hurting them. That's all the time we've got for the show today. If you enjoyed the show, consider subscribing to it wherever you get your podcast. Just search for how to retire on time. Discover if your portfolio is built to weather flat market cycles or if you're missing tax minimization opportunities that you may not even know exist.
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