Monday, July 12, 2021

21st Century Tree-Hugging Stratei

The phrase “tree hugger” refers to an environmentalist who advocates for the preservation of woodlands. Its original historical reference is to an incident that occurred in India in 1730, when local villagers literally hugged trees in an effort to prevent foresters from chopping them down for materials to build a palace. In doing so, more than 360 villagers were killed by the foresters; but the slaughter finally stopped – and the trees lived.¹

That’s a pretty awful tale behind a phrase used to describe people trying to preserve nature. But the long-derided annals of tree huggers are now becoming an economic necessity. These days, environmental researchers say that the preservation and planting of forests is one of the easiest, most cost-efficient and most effective ways to remove harmful carbon dioxide from the atmosphere. According to the Intergovernmental Panel on Climate Change (IPCC), boosting the world’s total area of forestry, woodlands and woody savannahs – which absorb and store atmospheric carbon – could limit global warming to above pre-industrial levels.²

Why does this matter? The economic, health and financial impacts of global warming and subsequent extreme weather incidents are beginning to impact us already – and will only get worse. For example, flood and homeowners insurance premiums will continue to rise to reflect more frequent and intense weather vulnerability. It’s important to ensure your household finances – both hard and financial assets – are well protected from unforeseen events. Feel free to contact us for a comprehensive insurance review.

As floods, wildfires, hurricanes and volcanoes impact vulnerable countries and communities, economists expect a surge in migration, reduced productivity and increased crime. One groundbreaking report headed by a former World Bank chief economist predicted that the economic costs of climate change could lead to a potential 20% decline in global GDP.³

The good news is that climate action is expected to drive economic growth throughout the 21st century. The recent infrastructure package proposed by the Biden administration includes investments to help the U.S. “win” the global electric vehicle market and advance clean energy to secure our electric grid.⁴ These investments are important to help the U.S. keep pace with other developed countries. For example, Europe is investing hundreds of billions of euros in renewable-energy capacity, such as zero-emission trains. China also is spending hundreds of billions of dollars to build manufacturing capacity for electric vehicles, solar panels and other clean-energy technology.⁵

Not only can tree-planting and other strategies help shore up global economies and household budgets from the detrimental effects of extreme weather events; there are aesthetic benefits as well. For example, the city of Paris is looking to replace half of its 140,000 on-street parking places throughout the city, including in residential areas, with a variety of green projects. Citizens have the option to weigh in on local projects that include planting more trees and shrubbery, urban vegetable gardens, food composting areas (similar to recycling centers), children’s playgrounds, bicycle lock-up areas and hygienic public restrooms.⁶

In short, the “green industrial revolution” is poised to provide the biggest financial opportunity since the last industrial revolution. And with the backing of every major country in the world, it may well become the biggest in history.⁷

We take pride in assisting our clients with incorporating all aspects of their life into their Retirement Roadmap 360®. Take control of your financial future and give us a call at (734) 769-1719 today to see how we may be able to help you!

¹ Cyrena Lee. Getaway House. Oct. 13, 2018. “A History of Tree Hugging.” https://journal.getaway.house/a-history-of-tree-hugging/. Accessed May 5, 2021.

² Simon L. Lewis, Charlotte E. Wheeler, Edward T. A. Mitchard and Alexander Koch. Nature. April 2, 2019. “Restoring natural forests is the best way to remove atmospheric carbon.” https://www.nature.com/articles/d41586-019-01026-8. Accessed May 5, 2021.

³ Justin Worland. Time. April 15, 2021. “The Pandemic Remade Every Corner of Society. Now It’s the Climate’s Turn.” https://time.com/5953374/climate-is-everything/. Accessed May 5, 2021.

⁴ Ibid.

⁵ Ibid.

⁶ Natalie Marchant. World Economic Forum. Dec. 7, 2020. “Paris halves street parking and asks residents what they want to do with the space.” https://www.weforum.org/agenda/2020/12/paris-parking-spaces-greenery-cities/. Accessed May 5, 2021.

⁷ Dale Vince. City A.M. April 30, 2021. “The hippie economy: tree-huggers and capitalists are a match made in heaven.” https://www.cityam.com/the-hippie-economy-tree-huggers-and-capitalists-are-a-match-made-in-heaven/. Accessed May 5, 2021.

We are an independent firm helping individuals create retirement strategies using a variety of insurance products to custom suit their needs and objectives. This material is intended to provide general information to help you understand basic retirement income strategies and should not be construed as financial advice.

The information contained in this material is believed to be reliable, but accuracy and completeness cannot be guaranteed; it is not intended to be used as the sole basis for financial decisions.

Investment Advisory Services are offered by Imber Financial Group, LLC., a Registered Investment Adviser firm. Insurance services are offered through Imber Wealth Advisors, Inc. Imber Financial Group, LLC. and Imber Wealth Advisors, Inc. are affiliated companies

Tuesday, July 6, 2021

How Infrastructure Spending Affects Municipal Bonds

According to the American Society of Civil Engineers, the 10-year tab to meet the country’s basic infrastructure needs is about $6 trillion. The report, published in March, includes $125 billion needed for bridge repairs, $435 billion for roads and $176 billion for the nation’s transportation systems.¹

For more than 200 years, municipal bonds have been used as public financing instruments in the U.S. Today, two-thirds of infrastructure projects such as schools, hospitals, highways and airports are financed by municipal bonds.²

In addition to providing revenue for infrastructure projects, muni bonds offer an attractive investment opportunity. They provide tax-advantaged yields for current income, stable credit quality and a risk-averse allocation for an investment portfolio. One way to diversify municipal bond investments is through a municipal bond fund or ETF. Given the potential for increased interest and investment in infrastructure in the foreseeable future, we’re happy to discuss opportunities suitable for your portfolio. Give us a call if you’d like to learn more.

President Joe Biden recently proposed a $2.3 trillion plan to invest in the nation’s infrastructure. One funding option Congress may consider is the Build America Bonds (BAB) program, which was introduced during the Great Recession as a means to fund recovery efforts through infrastructure repairs and development. BABs were originally structured for states, cities, schools, airports, mass transit agencies and other public entities to sell for a limited time. They were particularly attractive because the federal government kicked in 35% of interest costs.³

Stimulus packages over the past year have benefited the municipal market by making funds available to state and local governments to make up for lost sales tax revenues due to lockdowns and the beleaguered economy.⁵ Now, with more revenue available, local public agencies may be inclined to issue debt for capital purposes.

Bonds backed by states and cities tend to have high credit ratings and low default risk, and the federal government underwriting municipal debt makes them even more attractive. Historically, muni bonds have offered rates as high as 7% or more.⁶Furthermore, given the potential that an expensive infrastructure bill may be supported by an increase in income tax rates, municipal bonds offer an opportunity for investors to shield income from taxation.⁷

¹ Thomas Franck. CNBC. March 26, 2021. “Build America Bonds may be key to financing Biden’s infrastructure plans.” https://www.cnbc.com/2021/03/26/build-america-bonds-may-be-key-to-financing-bidens-infrastructure-plans.html. Accessed May 5, 2021.

² Jenna Ross. Visual Capitalist. Nov. 4, 2019. “From Coast to Coast: How U.S. Muni Bonds Help Build the Nation.” https://www.visualcapitalist.com/municipal-bonds-build-nation/. May 5, 2021.

³ Karen Pierog. Reuters. March 31, 2021. “Build America Bonds may stage a comeback in Biden’s infrastructure plan.” https://www.reuters.com/article/usa-biden-infrastructure-bonds/build-america-bonds-may-stage-a-comeback-in-bidens-infrastructure-plan-idUSL1N2LR1UZ. Accessed May 5, 2021.

⁵ Sanghamitra Saha. Nasdaq. April 7, 2021. “4 Factors Why Muni Bond ETFs Could Rally.” https://www.nasdaq.com/articles/4-factors-why-muni-bond-etfs-could-rally-2021-04-07. Accessed May 5, 2021.

⁶ Ibid.

⁷ Franklin Templeton. March 18, 2021. “Stimulus and Infrastructure: Boon for Muni Bonds?” https://www.franklintempleton.com/investor/tools-and-resources/investor-education/talking-markets-podcast/stimulus-and-infrastructure-boon-for-muni-bonds. Accessed May 5, 2021.

The information contained in this material is believed to be reliable, but accuracy and completeness cannot be guaranteed; it is not intended to be used as the sole basis for financial decisions.

Tuesday, June 29, 2021

How to Plan for Old Age

Thelma Sutcliffe turned 114 years old in April, making her the oldest living American and the seventh-oldest person in the world, according to the Gerontology Research Group. The Omaha, Nebraska, resident attributes her relative good health and longevity to the fact that she never had children, never smoked and made it a habit not to worry.¹
Not many people make it to 114, but those who do outlive their friends and loved ones. That’s why it’s important to develop passions and hobbies you can enjoy for the rest of your life, no matter how long you live. It’s also a good idea to establish a plan that provides a confident retirement. That may include living below your means and casting a wide net of friends to help ensure you have close ones to grow old with. It also may include buying insurance policies that offer reliable income. If you’d like help planning, please give us a call.

One key factor to consider is where you want to live in retirement, particularly during the later years when you may need help. Paying for full-time care in your own home can be very expensive. However, COVID-19 has caused some hesitation moving to assisted living and nursing homes due to the potential for disease outbreaks in the future. You may want to start thinking and talking with family members about the possibility of moving in with them later in life, if necessary. You could even use proceeds from the sale of your home to build an accessory dwelling unit (ADU) next to their home. Also known as a backyard cottage or granny flat, an ADU can help cut expenses to pay for in-home care – so there is less burden on family members.²
Some ADU floorplans even feature two bedrooms, so you could hire a full-time caregiver and provide room and board. Later, your heirs can use the ADU for rental income or to plan for their own long-term care.
Apart from financial and housing plans, consider developing hobbies you can enjoy later in life. You may cultivate a love of history, art or music early in retirement through volunteer efforts. For example, work as a docent, usher or fundraiser for a local museum, art gallery or concert hall. A heartfelt appreciation of the arts has a way of eliciting joy, even if you develop mobility or cognitive issues.

We take pride in assisting our clients with incorporating all aspects of their life into their Retirement Roadmap 360®. Take control of your financial future and give us a call at (734) 769-1719 today to see how we may be able to help you!

¹ Leah Asmelash. CNN. April 29, 2021. “She just became the oldest living person in the US and all she wants is to be able to eat meals with her friend again.” https://www.cnn.com/2021/04/29/us/oldest-living-american-trnd/index.html. Accessed May 3, 2021.

² Zillow. March 18, 2021. “What is an Accessory Dwelling Unit (ADU) – and Tips for Building One.” https://www.zillow.com/resources/stay-informed/2021/03/18/how-to-build-accessory-dwelling-unit-adu/. Accessed May 3, 2021.

The information contained in this material is believed to be reliable, but accuracy and completeness cannot be guaranteed; it is not intended to be used as the sole basis for financial decisions.

Tuesday, June 22, 2021

2021 Tax Strategies

In an effort to pay for new legislation, the Biden administration has proposed higher taxes for the nation’s highest earners. The president advocates returning the top tax rate to 39.6% for individuals earning $452,700 or more, and married couples with more than $509,300 in combined taxable income.

This top tax rate was just reduced in 2017 (to the current 37%), which emphasizes a very important point: Tax rates are going to rise and fall. While it may be prudent to make adjustments to income, investments, deductions and other tax strategies in response to changes, it’s always important to do what’s best for your circumstances. Making adjustments every few years could end up derailing your long-term goals. Before making any changes based on proposed or even enacted tax laws, be sure to consult with experienced financial and tax professionals to develop a sound strategy that works for the long haul. Feel free to call us if you’d like to discuss tax strategies.

With that in mind, there are tactics you can use to help minimize your tax obligations and still remain aligned with your goals. For example, if you are currently retired and regularly make charitable contributions, you can use your required minimum distributions (RMD) to donate directly from your IRA account. Those assets would no longer be reported as income, so you would not have to pay taxes on them. It’s a way to continue your charitable goals but minimize your taxes.²

Another asset that could be targeted for higher taxes is an inherited home. Today, heirs enjoy a step-up in basis, which means the home’s cost basis is adjusted to market value at the time of the owner’s death. If the heir sells the home immediately, he or she will owe no capital gains tax. Also, heirs can defer paying taxes on that value until they actually sell the home. However, Biden’s proposed inheritance tax would remove the step-up and tax capital gains upon the death of the parent, as if the home was sold. The current proposal includes tax exemptions up to $1 million for single heirs and up to $2.5 million for couples.

That may sound like a lot, but the heirs may have to sell the property if they don’t have ready cash to pay the gains tax. For example, say a son inherits his parents’ home. It was originally purchased for $300,000 and is valued at $1.5 million when he inherits it. Under the Biden proposal, he can subtract both the original cost ($300,000) and the exclusion rate ($1 million), but that still leaves $200,000 on which he would owe capital gains taxes.³

Another tax strategy being pursued by this administration is to collect taxes legally owed that are not currently being collected. According to the IRS, that’s about $1 trillion a year based on analysis from 2011 to 2013. However, between the proliferation of virtual currencies and the impressive growth in billionaire wealth just over the past year, the amount of uncollected tax revenues could be a lot higher than that now. In fact, IRS analysis has found that illegal and foreign-sourced income that is not currently being reported would yield an additional $175 billion in tax revenues from America’s wealthiest households. In an effort to avoid raising taxes on middle and lower-income households, Biden has proposed a 10.4% increase in IRS funding to help enforce tax laws already on the books.⁴

^{We take pride in assisting our clients with incorporating all aspects of their life into their Retirement Roadmap 360®. Take control of your financial future and give us a call at (734) 769-1719 today to see how we may be able to help you!}

¹ Kate Duffy. Business Insider. April 29, 2021. “Biden’s tax hike will hit married couples earning more than $510,000 combined, report says.” https://www.businessinsider.com/joe-biden-tax-rise-hits-married-couples-earn-less-400000-2021-4. Accessed May 3, 2021.

² Steven A. Morelli. Insurance News Net. April 9, 2021. “Advisors Dealing With A Flood Of Tax Anxiety.” https://insurancenewsnet.com/innarticle/advisors-dealing-with-a-flood-of-tax-anxiety. Accessed May 3, 2021.

³ Kate Dore. CNBC. April 29, 2021. “Biden’s plan for inherited real estate may impact more people than just the wealthy.” https://www.cnbc.com/2021/04/29/bidens-tax-plan-for-inherited-homes-may-impact-more-than-the-wealthy.html?recirc=taboolainternal. Accessed May 3, 2021.

⁴ Aaron Lorenzo. Politico. April 13, 2021. “IRS chief says some $1T in taxes going uncollected annually.” https://www.politico.com/news/2021/04/13/irs-one-trillion-taxes-uncollected-annually-481128. Accessed May 3, 2021.

The information contained in this material is believed to be reliable, but accuracy and completeness cannot be guaranteed; it is not intended to be used as the sole basis for financial decisions.

Monday, June 14, 2021

The Labor Market in the Post Pandemic Era

According to the most recent Future of Jobs Report by the World Economic Forum, 50% of employees will need new skills training by 2025 as the pace of technological innovation continues to grow. Among business leaders, 94% say they expect employees to learn new skills while on the job, compared to just 65% who made that claim in 2018.¹

However, the amount of time it takes to reskill will depend on the industry, according to the online learning platform Coursera. For example, only one or two months is necessary to acquire skills in emerging professions such as content writing, sales and marketing; in contrast, it could take up to three months to expand skills in product development, data and artificial intelligence. Skills needed for roles in cloud computing and engineering could take up to four months. Among soft skills that will increase in demand, critical thinking and problem-solving top the list. But post-pandemic, skills in resilience, stress tolerance and flexibility also are highly valued.²

This recognition of the need for new skills training opens up avenues for all types of people, even retirees and middle-aged professionals who would like to change careers. After all, the acquisition of skills based on new technologies means no one will have a huge edge in terms of experience. Therefore, people with the ability to learn technical skills quickly – who already possess high-value soft skills – have strong potential to vie for a new career. If you’re thinking about making such a move, we’d be happy to review your financial portfolio to help make sure you are on the right path toward your retirement.

Another labor trend is the rise of remote work and its impact on employees’ lifestyles. With the pandemic clearing the way for many white-collar workers to work remotely, younger workers have been able to move to more affordable locales and buy their first homes. On the other hand, established homeowners can now consider relocating to wherever they’d like to retire, trading in their current home equity for their retirement home – with a plan to pay off that final mortgage while they’re still working. This way, they can move and start enjoying a retirement lifestyle near the beach, lake or mountains while still gainfully employed, albeit working remotely.³

Unfortunately, low-skilled, blue-collar professions are on the other side of that coin. Many either lost jobs during the pandemic or were classified as high-risk “essential workers.” Just because grocery store clerks became essential, it doesn’t necessarily mean an increase in pay or benefits. While the debate over raising the national minimum wage continues in Washington, there’s little doubt that many low-paying jobs will always be necessary, but experienced workers in those positions are not necessarily low-skilled.⁴

For example, what is the value of caregivers who can skillfully attend to mobility-challenged people? Or workers who serve multiple tables of hungry and thirsty patrons who want their meal yesterday? Skills like patience and equanimity have not traditionally received the same level of pay as an office worker, but they are no less valued or necessary. It will be interesting to see, post-pandemic, if these types of jobs begin to translate into fair pay and good benefits.⁵

After decades of steady decline, labor unions are hoping for greater respect and participation moving forward – based on support by President Joe Biden’s administration. Today, only one in five households has a union member, and the Economic Policy Institute estimates the decline of unions translates to an average loss of $3,250 per year for a full-time worker. Biden is advocating passage of the Protecting the Right to Organize (PRO) bill, which would abolish state laws that ban mandatory collection of dues as a condition of employment, penalize businesses that retaliate among union drives and extend federal labor rights to independent contract workers. So far, the House has approved the legislation, but it faces a more difficult path in the Senate.⁶

¹ Kate Whiting. World Economic Forum. Oct. 21, 2020. “These are the top 10 job skills of tomorrow – and how long it takes to learn them.” https://www.weforum.org/agenda/2020/10/top-10-work-skills-of-tomorrow-how-long-it-takes-to-learn-them/. Accessed April 30, 2021.

² Ibid.

³ Liam Dillon. Los Angeles Times. April 30, 2021. “The remote work revolution is transforming, and unsettling, resort areas like Lake Tahoe.” https://www.latimes.com/homeless-housing/story/2021-04-30/covid-wfh-boosts-palm-springs-lake-tahoe-housing-markets. Accessed April 30, 2021.

⁴ Annie Lowrey. The Atlantic. April 23, 2021. “Low-Skill Workers Aren’t a Problem to Be Fixed.” https://www.theatlantic.com/ideas/archive/2021/04/theres-no-such-thing-as-a-low-skill-worker/618674/. Accessed April 30, 2021.

⁵ Ibid.

⁶ Steve Matthews and Payne Lubbers. Bloomberg. April 15, 2021. “Biden Confronts Decades of Union Decline in Bid to Boost Pay.” https://www.bloomberg.com/news/articles/2021-04-15/biden-confronts-decades-of-union-decline-in-bid-to-boost-wages?sref=wFA4tJCq. Accessed April 30, 2021.

We are an independent firm helping individuals create retirement strategies using a variety of insurance and investment products to custom suit their needs and objectives. This material is intended to provide general information to help you understand basic financial planning strategies and should not be construed as financial or investment advice. All investments are subject to risk including the potential loss of principal. No investment strategy can guarantee a profit or protect against loss in periods of declining values.

The information contained in this material is believed to be reliable, but accuracy and completeness cannot be guaranteed; it is not intended to be used as the sole basis for financial decisions.

Wednesday, June 9, 2021

Ranking the World's Nations

What’s the best country? After several years at No. 2, Canada leads the globe, according to U.S. News & World Report’s “Best Countries” rankings for 2021. It’s followed by Japan, Germany, Switzerland, Australia and the United States.¹

The criteria used to make Best Country determinations included quality of life, agility, entrepreneurship, an “open for business” climate, a strong job market and commitment to social justice and human rights. At No. 6, the United States received high marks in power and cultural influence, and scored highest in agility, which represents traits such as adaptability and responsiveness.²

Agility is an important trait for individuals and families, too, because it means you can pivot, adapt and respond to life’s challenges and move forward. Please call us if you’d like us to help make sure your financial picture remains agile no matter what challenges you may encounter.

Over the past year, the global perception of “best countries” has in many ways been shaped by responses to the pandemic. According to the Global Health Security Index, the U.S. has traditionally ranked highest in preparedness in terms of its ability to prevent, detect and respond to infectious disease threats. Unfortunately, that preparedness apparently wasn’t an advantage with COVID-19, as the U.S. ranked worst globally in terms of case numbers and deaths since the onset of the pandemic.³

Fortunately, the U.S. has picked up in more positive perceptions as it rolled out vaccinations this spring. In April, it advanced to No. 17 in Bloomberg’s Covid Resilience Ranking. Singapore, New Zealand and Australia top that list as the best places to live during the pandemic. By tracking recovery rates in the 53 major economies across the globe, the Bloomberg index is designed to help predict how they may grow in the future.⁴

For now, global travel remains tenuous. Countries still struggling with outbreaks and low vaccine rates are largely off limits, while countries doing well in these areas are restricting citizens from traveling places where they might return with a new strain of the virus. In April, the U.S. State Department updated its travel advisory guidelines, warning Americas not to travel to about 80% of the world.⁵

All in all, 2020 was not a great year anywhere on the globe. Even countries that had success containing the virus suffered economically due to lockdowns, while the opposite was true for economies that stayed open. Still, the World Economic Forum published its annual World Competitiveness Ranking in December 2020, albeit without country competitiveness rankings due to incomplete data. Based on the indicators of reviving and transforming the enabling environment, human capital, markets and the innovation ecosystem, the U.S. led in areas such as digital legal framework and new business creation.⁶

¹ Knowledge@Wharton. April 20, 2021. “Why Canada Took the Top Spot on This Year’s ‘Best Countries’ List.” https://knowledge.wharton.upenn.edu/article/canada-took-top-spot-on-this-years-best-countries-list/. Accessed April 26, 2021.

² Ibid.

³ National Center for Biotechnology Information. Oct. 7, 2020. “The Global Health Security Index is not predictive of coronavirus pandemic responses among Organization for Economic Cooperation and Development countries.” https://www.ncbi.nlm.nih.gov/pmc/articles/PMC7540886/. Accessed April 26, 2021.

⁴ Jinshan Hong, Rachel Chang and Kevin Varley. Bloomberg. April 26, 2021. “The Best and Worst Places to Be as Variants Outrace Vaccinations.” https://www.bloomberg.com/graphics/covid-resilience-ranking/. Accessed April 26, 2021.

⁵ Kenneth Kiesnoski. U.S. News & World Report. April 24, 2021. “State Department has warned against travel to 80% of the world. Here’s what you need to know.” https://www.cnbc.com/2021/04/24/covid-80-percent-of-world-is-unsafe-for-travel-amid-pandemic-state-dept-warns.html. Accessed May 14, 2021.

⁶ Klaus Schwab and Saadia Zahidi. World Economic Forum. 2020. “The Global Competitiveness Report. Special Edition 2020.” http://www3.weforum.org/docs/WEF_TheGlobalCompetitivenessReport2020.pdf. Accessed April 26, 2021.

The information contained in this material is believed to be reliable, but accuracy and completeness cannot be guaranteed; it is not intended to be used as the sole basis for financial decisions.

Wednesday, June 2, 2021

Gen X Prepares to Ascend the Throne

Generation X, comprised of adults between the ages of 40 and 55, have entered their prime earning years while at the same time enjoying a bull market for stocks. This demographic represents about a quarter of households in the U.S. (26.8%) and a similar share of

household net worth (26.9%). However, many economists see Gen X as the next generation to hold significant wealth.1

While the declining Baby Boomer generation now accounts for only 22% of American consumers, Gen X is expected to grow to more than 38 million households by 2027. Furthermore, this group is expected to reach $34.6 trillion in investable assets during that same time frame, up from holding $9.2 trillion in in 2017.2

If you or someone you know is earning a good income but has little investment experience, we’d be glad to help. Forming a trusted relationship with a financial professional can be the key to designing and achieving a plan for a financially confident retirement. Please feel free to give us a call or refer us to family, friends and colleagues.

A new study of Generation X women found that more than half (54%) of those with partners earn as much as or more than their spouse. In fact, nearly a third of Millennial and Gen X women report that they are the primary breadwinners of their household. With earnings and financial planning top of mind, about 77% of Gen X women say they are making sure their children learn about managing finances.3

However, Gen X largely represents the last of the old guard. This generation grew up believing in the American dream – get an education, work hard, buy a house with a 30-year mortgage and save for retirement. In contrast, the generations following are more skeptical of these principals. Having lived through and witnessed the effects of two recessions and a global pandemic on their parents’ finances, Millennials and Generation Z are more likely to question the cost-value proposition of a college education and the wisdom of committing to a 30-year mortgage – especially while carrying student loan debt and an auto loan.4

Gen X may be more interested in a job that provides health benefits, while younger generations tend to be more entrepreneurial, and choosing the entrepreneurial path, benefits are not always included with the job. As such, Gen X is more old school when it comes to investing, contributing to traditional savings vehicles and adopting a buy-and-hold mindset. In some ways Millennials are proving more sophisticated; using apps to actively buy and sell stocks, invest in fractional shares, and mix up their savings vehicles among tax-advantaged accounts such as a 401(k) or a Roth IRA.

In many ways, Generation X is in a prime position. Although overlooked by the larger, more influential Baby Boomers and Millennials, Gen X has benefited from being sandwiched in the middle. They’ve inherited the values of the American Dream. Many got their college education before tuitions skyrocketed and student loans became prevalent. Some had bought their first house and had a firm foothold in their career before the 2007 recession.

At the same time, they grew up with computers and easily adapted to smartphones and other new technology. Gen X has accumulated assets that are well positioned to continue growing and help ease them into retirement, not to mention the potential for inheriting wealth from their parents.5

1 Howard Schneider. US News & World Report. March 29, 2021. “Gen X Emerging From Pandemic With Firmer Grip on America’s Wallet.” https://money.usnews.com/investing/news/articles/2021-03-29/gen-x-emerging-from-pandemic-with-firmer-grip-on-americas-wallet. Accessed April 11, 2021.

dont-call-them-slackers-why-gen-x-is-really-gen. Accessed April 11, 2021.

3 Jacqueline Sergeant. Financial Advisor Magazine. April 1, 2021. “The Buck Increasingly Stops With Millennial, Gen X Women.” https://www.fa-mag.com/news/the-buck-increasingly-stops-with-millennial–gen-x-women-61202.html. Accessed April 11, 2021.

4 Andrew Lisa. Yahoo Finance. April 6, 2021. “What Millennials Can Learn From Gen X’s Money Mistakes.” https://finance.yahoo.com/news/millennials-learn-gen-x-money-201401828.html. Accessed April 11, 2021.

5 Andrew Lisa. Yahoo Finance. March 24, 2021. “Surprising Ways Gen X and Millennials Are Worlds Apart Financially.” https://finance.yahoo.com/news/surprising-ways-gen-x-millennials-110017806.html. Accessed April 11, 2021.

The information contained in this material is believed to be reliable, but accuracy and completeness cannot be guaranteed; it is not intended to be used as the sole basis for financial decisions.