TPIR Ep 149 Full Show.mp3: this mp3 audio file was automatically transcribed by Sonix with the best speech-to-text algorithms. This transcript may contain errors.
Speaker 1:
Well, the data is showing that younger generations are saving for retirement differently and perhaps better than older generations now.
Speaker 2:
Welcome to Take Pride in Retirement, the podcast dedicated to helping members of the LGBTQ plus community protect and grow their hard earned money. Get set for a show full of education and insights with your host and advisor, Matt McClure. We recognize every family is unique. The goal of the show is to help you achieve financial freedom, so you and your loved ones can have the retirement you've always dreamed of, a retirement you can take pride in, no matter who you are, where you're from, or who you love. So now let's start the show. Here's Matt McClure.
Speaker 1:
Here to join me to talk more about that is Kai Walker with Bank of America. He is the managing director of Workplace benefits Research and Inclusion Transformation at B of A. Kai, thanks so much for being here. Really appreciate your time.
Speaker 3:
Oh, I'm so glad to be here. Thanks for having me.
Speaker 1:
Well, it's great to have you to talk about this because it could be surprising, I feel like, to a lot of people to hear this, but it really is bearing out in the numbers. Uh, Bank of America now out with the 2026 Workplace Benefits report. And it seems like, you know, Gen Z, at least compared to, um, you know, boomers and, and maybe some older generations as well, maybe Gen X and millennials also. Who knows? We'll find out though, uh, they're saving earlier those Gen Zers. Talk about that. And, uh, you know, at what age are they starting to save compared to those other generations?
Speaker 3:
Yeah, it's really interesting. Our research is showing that for this population of Gen Zers, they are starting, um, contributing towards their retirement at the age of 24 compared to their boomer counterparts who didn't start until the age of 34. And I think there are a few reasons behind that.
Speaker 1:
Yeah. Well, what are some of those reasons? Because, I mean, I actually have seen this a bit in, uh, just, you know, sort of everyday life. I was at a, at a festival recently and had a booth there and was talking to some, some folks and it seemed like I talked to more younger people who already, you know, told me, oh yeah, I've got a 401 K or I've got, you know, through through work, which isn't all that surprising. But a few of them were like, yeah, I've got a Roth or I've got this and that other type of retirement planning vehicle, a retirement account. Um, what are some of the reasons for that? Are we seeing?
Speaker 3:
Yeah, I would say our findings are quite similar. And I think, I think there's a couple of things that I would note. So first is if you think about Gen Z, they are the youngest generation in the workforce today. And they're the first generation that were born digitally native. And so they're connected 24 over seven online. And so when you think about the resources available to them at their fingertips online tools, calculators, news, financial information. They're the generation that has this. And the first to have it. Compared to their. Their Boomer counterparts. Secondly, they're also using social media for financial information and news. And so 63% of the population told us that that is their primary resource for financial news and, uh, and for information. I think there's a second thing. I think as they look over the horizon of the generations that came before, think of Gen X and boomers, they're realizing that they're going to have the need to be more self-reliant to prepare for their own financial future, particularly around the concept of retirement. And so what we're seeing is that they're doing their best to try to pay down debt. Uh, they're saving more. They're also looking towards emergency savings to kind of weather those economic storms, if you will. And certainly they're contributing to their retirement programs through their employers, such as for one K plans.
Speaker 1:
Yeah. And what would you say and advice might you have for people who are looking to build their retirement savings, whether, you know, early like this Gen Z generation or maybe if those maybe millennials or Gen Xers feel like they're a bit behind and need to play some catch up here.
Speaker 3:
Yeah. I would say just start today, even if it's starting small. Even small contributions can build up to wealth over time. So start now if possible. Uh, it doesn't mean you've got to start with, uh, you know, a huge retirement nest egg. And but it can mean that you can start today, let's say, contributing to your employer's rolling K plan at a 1% level. And maybe next year you try to bump it up by another 2 or 3 percentage points. And so start small and start now if possible. Um, the other thing I would note, and we see this through the Gen Z population as well. That is don't leave free money on the table. And what I mean by that is, again, assume that you've got access to a four one K plan through your employer. Oftentimes, those employers will make matching contributions up to, let's say 6%. Well, if you're contributing only four, you're leaving 2% of free money, those employer contributions on the table. And so to the extent that you can try to up those contributions to maximize that potential, the better you're going to be in the long run. So don't leave that free money on the table. And then like the Gen Zers are doing. Ensure that you're also saving for those rainy day funds, uh, emergency savings, just given the economic times that we live in. And who knows if the car breaks down, the refrigerator goes out. You want to have those those emergency savings to ensure that you've got resiliency built into your plan?
Speaker 1:
Yeah. And that point about free money, I mean, that's my that's my favorite kind of money. So there we go. Don't leave that on the table. Definitely. Um, and one more thing here, because I know that this is part of the annual workplace benefits research that you all do there. Um, talk about other workplace benefits as well and kind of the, you know, I mean, retirement planning is one piece of the puzzle, but talk about, you know, just taking advantage of the full sort of slate of workplace benefits no matter where you work.
Speaker 3:
Yeah, that's a great question. And often right now for many of us, we find ourselves in open enrollment, right? And so it's a great time to evaluate the benefits that are being offered to you. One quick example that I'll give is health savings accounts. That is a program that many employers are offering employees today. It's a way for you to save for healthcare expenses. And the beauty is the money that goes in goes in tax free, it grows tax free. And to the extent you use it for healthcare expenses, it comes out tax free. So we call that triple tax advantage. And so as part of open enrollment or just a phone call to your HR department, see if those are available to you and how you can access them and incorporate them into your overall financial plan.
Speaker 1:
Very good. Well, Kai, just about time to wrap things up here, but where can our listeners go for more information?
Speaker 3:
Sure. Certainly go to your HR department. They offer again, lots of online tools and resources. You can speak to a human being as well. But also Bank of America offers something called better money habits.com, a free resource that will help you from even how to just get started with a budget for your family all the way through. How do we think about saving for retirement and helping me along my retirement journey? That's better money habits.com.
Speaker 1:
All right. We'll send our listeners in that direction. Kai Walker, managing director of Workplace benefits Research and Inclusion Transformation at Bank of America, thanks so much for being here. Really do appreciate your time.
Speaker 3:
Thanks for having me.
Speaker 2:
Thanks for listening. To Take Pride in Retirement, members of the LGBTQ plus community deserve to work with a fiduciary financial advisor who puts their needs first. To schedule a free, no obligation consultation with Matt McClure and the team at Active Wealth Management. Call (855) 246-9211 or go online to take pride in retirement.com. Investment advisory services offered through Brookstone Capital Management LLC, BCM, a registered investment advisor, BCM and Active Wealth Management Incorporated are independent of each other. Insurance products and services are not offered through BCM, but are offered and sold through individually licensed and appointed agents.
Speaker 1:
Any examples used are for illustrative purposes only, and do not take into account your particular investment objectives, financial situation or needs and may not be suitable for all investors. It is not intended to predict the performance of any specific investment, and is not a solicitation or recommendation of any investment strategy. Registered investment advisors and investment advisor representatives act as fiduciaries for all of our investment management clients. We have an obligation to act in the best interest of our clients and to make full disclosures of any conflicts of interest. Please refer to our firm brochure, the ADV two A item four for additional information.
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