The joy of the holidays is bringing everyone together around the dining room table. Three or more generations can come together at this time of year and no other. We have the opportunity to catch up and reacquaint ourselves with stories and camaraderie and perhaps talk about topics that are best discussed in person.
One of my first articles for Kiplinger.com, 8 Financial Conversation Starters for the Thanksgiving Table, was a daydream in 2017 for what we could (mostly) be grateful for. My primary audience then was and continues to be Baby Boomers and Grandparents – now six years older but statistically in the Baby Boomer age range of around 58-77.
In this article, I imagined three generations at the table with the Boomer grandparents at the controls. (Not all grandparents can host the event because, of course, in-laws are also vying for that honor.) And with the next generation in the wings, baby boomers are considering a transition not just from turkey cooking, but also their lifestyle and finances. However, they are always ready to help the younger generations.
You may want to wait until the grumpy uncle is engrossed in the soccer game, but don’t be afraid to bring up important financial discussions while everyone is in the same place.
Below is what’s changed since 2017, along with a list of other possible Thanksgiving talking points. You decide which ones are best to bring up during hors d’oeuvres, the main course, dessert, or while Uncle Bob naps on the couch.
New topics for discussion
Prices have increased, as they almost always will over the years. The difference is a rapid and frightening post-pandemic price rise that has changed the way we think about our economic security, which is often centered on housing and paying for college, two expensive pillars of modern life that are much more expensive today, as is the case. the cost of living in general. Not only are houses more expensive, but mortgage rates rose from 4.0% in 2017 to 7.44% today.
Financing these growing costs also looks a little different than it did in 2017. The stock market was rising for most of the period through 2020, when it was underwater, but has now bounced back. Show this S&P500 chart to the annoying cousin who seems to be a market expert.
Performance of the S&P 500 Index from November 2013 to November 2023
Boomers, for their part, will focus on Social Security and overall health. They worry about whether their payments will continue at current levels, with Congress having done nothing so far to improve the long-term health of the program. (See my article How to Fix Social Security and What to Do in the Meantimein which I propose a way to help deal with the possibility of shortfall.)
Everyone is older and has new financial problems
Oldest granddaughter is no longer a teenager who likes you to come to her soccer games. She starts college in two years!
Son and daughter-in-law are looking to move to a less expensive market to save on housing costs. In fact, the grandparents are also considering selling their house and downsizing.
So, the children ask themselves questions:
- Can you finance the Plan 529 at a higher rate to help pay for college?
- Can you help us with interim financing for our house if we want to sell it first?
- By the way, what are you going to do with the money you get from the sale of your house?
My advice to baby boomers is: before answering these questions, put your own retirement plan in place.
Some good news about the new planning
Don’t be surprised if artificial intelligence becomes a hot topic as word gets around. I place myself between the prophets of doom and the true devotees (see my article Can AI plan your retirement better than me?). I argue that planning has improved not because AIbut because some of the typical rules of thumb didn’t hold up during the down years of the pandemic – the 4% rule for starting income, the “100 minus your age” rule for stock investments, etc.
More and more experts have come to understand what I have been saying for 40 years, namely that annuity payments can improve your retirement in a variety of ways. (Preview: The next major expansion will be to increase your income security by using home equity without selling it.)
Other discussion points and reasons for the improved outlook include:
If you would like an annuity quote based on current annuity rates, visit annuity calculator at Go2Income.
The dinner table may be the place to start these important financial and lifestyle changes, but conversations must continue afterward to reach the best conclusions. To move beyond casual conversation and into action, everyone needs to do some homework, find an advisor whose practice matches your needs, and create a plan that achieves as many of your goals as possible.
We will accelerate this process and reveal the results in a future article.
What makes Jerry grateful?
I’m lucky to have our family of three generations gathering for Thanksgiving in California and Connecticut – while I’m Uncle Jerry at an in-law’s table. We are healthy and happy (even teenagers).
And I appreciate the people who read my column. This is a great group of DIYers who want to take charge of their retirement and make it better. They ask me questions and develop options to Go2Revenue. Let’s get to work to offer everyone the best retirement possible!