PF SMS icons - Military Families Learning Network · Family Readiness Policy, U.S. Department of Defense under Award Number 2015-48770-24368. Financial Planning Transitions for Different

PF SMS icons PF SMS icons

learn.extension.org/events/3108

This material is based upon work supported by the National Institute of Food and Agriculture, U.S. Department of Agriculture, and the Office of Military Family Readiness Policy, U.S. Department of Defense under Award Number 2015-48770-24368.

Financial Planning Transitions for Different Generations: Touchstones,

Tasks, & Teaching Strategies

1

Connecting military family service providers and Cooperative Extension professionals to research

and to each other through engaging online learning opportunities

militaryfamilies.extension.org

MFLN Intro

Sign up for webinar email notifications at militaryfamilies.extension.org/webinars

Today’s Presenters

3

Barbara O’Neill, Ph.D., CFP®, AFC, CHC Extension Specialist and Distinguished Professor Rutgers University

Lisa Hinz Extension Educator, Leadership and Civic Engagement University of Minnesota Extension

Brian Fredrickson Extension Educator, Leadership and Civic Engagement University of Minnesota Extension

Increase knowledge about characteristics of generations living and working in the U.S. today

Increase knowledge about generational personal finance practices

Increase knowledge about generational personal finance action steps

Increase knowledge about generational financial education resources

4

Today, we’ll …

5

What do you hope to learn today?

Share in the chat pod.

To understand the man you have to know what was happening in the world when he was twenty.

― Napoleon

6 6

It has been said already, but bears

repeating: no blanket statement can sum up an entire group of people. No book, no chapter, no study, no research report can

attempt to do that either.

―Charlie Caruso, author, Understanding Y

7 7

a group that shares birth years, age, location, and significant life events at critical developmental stages

Wikimedia Commons Wikimedia Commons

A generation is …

8

Pere/ Flickr CC2.0

9

Who are the generations? Traditionalist ~ before 1946

Baby Boomer ~ 1946 – 1964

Gen X ~ 1965 – 1980

Millennial ~ 1981 – 1995

Gen Z ~ 1996+

Generational labels and years are not absolute. For this presentation, sources are drawn from research as much as possible and adapted for clarity from Pew Research Center and the Center for Generational Kinetics

Licensed by UMN Extension

10 10

Births by Generation

11 11

25oryounger

26-30years

31-35years

36-40years

41&older

AgeofTotalMilitaryForce(N=2,120,505)

Source: 2015 Demographics: Profile of the Military Community; Department of Defense, Office of the Deputy Assistant Secretary of Defense for Military Community and Family Policy

Generations in our Military

12

25oryounger

26-3031-35

36-40

41&older

AgeofTotalMilitaryForce(N=2,120,505)

Millennials & Gen X

Gen X

Millennials

Gen Z & Millennials


Generations in our Military

Gen X, Boomers, & Traditionalists

13

0

100,000

200,000

300,000

400,000

500,000

600,000

Ac=veDutyMembers

Ac=veDutyEnlisted

Ac=veDutyOfficer SelectedReserveMembers

SelectedReserveEnlisted

SelectedReserveOfficers

AgeofAc=veDuty&Selec=veReserve-Enlisted&Officers

25oryounger 26-30 31-35 36-40 41&older

n  25 or younger – Gen Z & Millennials n  26-30 years old – Millennials n  31-35 years old – Millennials & Gen X n  36-40 – Gen X n  41 and older – Gen X, Boomers, &

Traditionalists


Active Duty & Selective Service

14

020,00040,00060,00080,000100,000120,000140,000160,000180,000200,000

Enlisted Officers Enlisted Officers Enlisted Officers Enlisted Officers

Army Navy MarineCorps AirForce

NumberofAc=veDutyEnlistedMembersandOfficersbyServiceBranchandAge

25oryounger 26-30 31-35 36-40 41&older


Traditionalists


Active Duty by Service Branch

15

0

20,000

40,000

60,000

80,000

100,000

120,000

140,000

160,000

Enlisted Officer Enlisted Officer Enlisted Officers Enlisted Officers Enlisted Officers Enlisted Officers

ArmyNa=onalGuard

ArmyReserve NavyReserve MarineCorpsReserve

AirForceReserve CoastGuardReserve

NumberofSelectedReserveEnlistedMembersandOfficersbyReserveComponentandAge

25oryounger 26-30 31-35 36-40 41&older


Traditionalists


Selective Reserve by Component

16

0

20,000

40,000

60,000

80,000

100,000

120,000

140,000

160,000

180,000

25oryounger 26-30 31-35 36-40 41&older

AgeofMilitarySpouses-Ac=veDuty&SelectedReserve

AgeofMilitarySpouses-Ac=veDuty&SelectedReserveAc=veDuty

AgeofMilitarySpouses-Ac=veDuty&SelectedReserveSelectedReserve


Spouses: Active Duty & Selective Service

17

U.S.Genera6onsbythe#s

Now-2050

18

Poll: Which generation are you?

19

Tradi=onalistsa.k.a“GreatestGenera=on”,

Silent,Builders• Great Depression • WW II • Rural Life • Automobile • Family-Faith-School • Telephones (party line) • Silver Screen • Big Bands

Image via Photospin

20 20

•  Can-do attitude matched with Will-do accountability

•  Most financially secure in recent years

•  Value obedience & duty over individualism & pleasure

Strengths of Traditionalists •  Loyal •  “We are all in this

together” mentality •  Value training •  Believe in law and order •  Thrifty

21

Baby Boomers

• Suburbia • Vietnam • Civil Rights • Kennedy Assassination

• TV • Beatles & Elvis

22

Randstad Canada/CC BY 2.0

22

Randstad Canada/CC BY 2.0

Strengths of Boomers • Size of their cohort – political leverage

• Sense of equality • Value hard work • Team Players • Challengers of status quo

• Notoriously good networkers

• Drive to learn and improve, become self-actualized

• Own considerable proportion of nation’s wealth

23

Generation X a.k.a. Gen X, Busters, Post-Boomers

• Disco, Rap, Michael Jackson, & MTV

• Watergate •  Iran Contra Scandal • Challenger Disaster • Berlin Wall down • AIDS • Computers


24 24

• Survivor mentality • Adaptable • DIY / Start from scratch

(means no rules) • Pragmatic

Strengths of Gen X • Prioritizing • Risk Takers • Willing to rock the boat • Independent • Tech Savvy

25

Millennials a.k.a. Gen Y, Nexters, Internet Generation

• Tech Boom • Multiculturalism •  9/11 Attacks, Oklahoma

Bombing, & Columbine High School Shootings

• TV Talk shows and Reality TV

•  Internet, email, cell phones


26 26

Strengths of Millennials • Size of their cohort

– 1/3 of the U.S. pop. – 1/4 of the world’s pop.

• Civically engaged • Tech-able • Positive expectations -

hope • Carefully weigh options

before making decisions*

• Continuous learners • Value collective action • Coming in to money • Strong team ethic • Driven to make a

difference • Open to adaptation • Achievement oriented

27

Gen Z Digitals a.k.a iGen, Centennials

28

• Technology revolution • Considerable diversity •  Instant results; constant

feedback • Skill gaps • Global mindset - local reality

28

Strengths of Gen Z (after 1996) • Size of their cohort • Stronger work ethic and

entrepreneurial sprit • Skilled web researchers • Diversity breeds

awareness

• Most diverse “rainbow” generation

• Autodidactic mindset: can and will teach themselves what they need to know

• Flexibility

29

• Funding Entitlements vs. Program Sustainability

• Time and Effort – To understand – To build relationships

• Innovation vs. Institutional Knowledge • Racial shifts

30

Potential Challenges or Tensions

30

31

ü Continuous learning, experimenting, and adapting is essential at all ages.

ü Encourage frequent and meaningful contact across all generations

ü Follow reports based on data.

31

32

Thoughts?

Questions?

32

• Books –  Deal - Retiring the Generation Gap –  Taylor – The Next America (& interview)

• Web –  Pew Research Center –  Center for Generational Kinetics –  interview: “Millennialstobeartheburdenofboomer’ssocialsafetynet”-DavidGreeninterviewsauthorPaulTaylor,TheNextAmerica

http://creative-commons-images.com/handwriting/h/human-resources.html

33 33

Generational Personal Finance

Practices

34

https://www.youtube.com/watch?v=sU5KBUGvM3U

Talkin’ ‘Bout My Generation

35

The Influence of Early Environments

“What imprints on younger people impacts them for the rest of their lives”

- Cam Marston, Generational Insights https://generationalinsights.com/about/

36 36

NEFE Generation Definition

37

Generational Touchstones

Source: National Endowment for Financial Education

38

Life Cycle Tasks That All Generations Pass Through

Source: Take Charge Today, formerly known as Family Economics and Financial Education (FEFE)

39

The Financial Life Cycle

40

Source: Take Charge Today, formerly known as Family Economics and Financial Education (FEFE)

40

Generations Defined

Source: Dr. Ethel G. Jones, Louisiana Tech University, School of Human Ecology

Source: Wall Street Journal: https://www.wsj.com/articles/analysis-of-the-generations-isnt-an-exact-science-1468575000

41

Generational Differences Activity


42

Question #1: How much do you know about generations and

personal finance?

43


Practices

44

Poverty Levels by Generation

45

Spending Behavior

Source: Bank of America/Merrill Lynch

Take-aways: Millennials spend the most on eating out, Gen X spends the most on housing, Baby Boomers spend the most on furniture/building, and Traditionalists spend the most on groceries.


46

Source: Bankrate Spending Index, July 2017: http://www.prnewswire.com/news-releases/millennial-spending-habits-differ-from-older-generations-300491437.html

Millennial Spending vs. Others

47

Payment Behavior

Source: Next Gen Personal Finance: https://docs.google.com/presentation/d/1e6qcFBx6K-UNpXmzllpGalXKgU4t4XoNspucTFeUJ24/edit#slide=id.g18210699ce_1_6

48

Comfortably Cashless

Source: Next Gen Personal Finance: https://docs.google.com/presentation/d/1-2R_jszVMwlVW2mUvrnPM-EFo6GqhIpRIK9z1LfuinE/edit#slide=id.g1821408edd_0_0

49

Credit Cards By Age

Source: Next Gen Personal Finance: https://docs.google.com/document/d/170znpcLfVahk3H7O4GqbS1u124ABMvuxsvc4DD3X0kM/edit

50

Credit Card Debt by Age

Source: Next Gen Personal Finance: https://docs.google.com/document/d/1LcYwZIXZf1AC0i7v3I6sJEumCt9xZBsAXu8OSAYbx7Y/edit 51

Credit Scores By Age

Source: Credit Karma: https://www.creditkarma.com/trends/age

52

Source: Value Penguin via Next Gen Personal Finance: https://docs.google.com/document/d/1sgTUFbCvNyUbEyAiIiUNsXIAxX9PD4OSoACjt0xzczE/edit

Auto Insurance Premiums by Age

53

Source: Value Penguin via Next Gen Personal Finance: https://docs.google.com/document/d/13kyHDBg91oCZUzmWip7PRCi9CUmFDmg89d1kXHBkuLM/edit

Health Insurance Premiums by Age

54

Health Care Barriers by Generation

55

Income Tax Filing by Generation

Source: GO Banking Rates: https://www.gobankingrates.com/personal-finance/43-percent-americans-file-taxes-comfort-home-survey-finds/ 56

Question #2: Comments so far?

57

Saving and Investing Behavior

Source: T. Rowe Price Report, Issue 135, Spring 2017, p. 14-15; https://individual.troweprice.com/staticFiles/Retail/Shared/PDFs/pricereport_spring.pdf?van=pricereport-spring

58

Cash Asset Allocation

Source: Blackrock survey via Investopedia: http://www.investopedia.com/news/millennials-are-risk-averse-and-hoarding-cash/?lgl=rira-baseline-vertical

59

Savings Goals

Source: Merrill Edge Report, spring 2017: https://olui2.fs.ml.com/Publish/Content/application/pdf/GWMOL/Merrill_Edge_Report_Spring_2017.pdf

60

Generational Saving Perceptions

Source: Merrill Edge Report, spring 2017: https://olui2.fs.ml.com/Publish/Content/application/pdf/GWMOL/Merrill_Edge_Report_Spring_2017.pdf

61

Multi-Generational Housing Arrangements

Source: Next Gen Personal Finance: https://docs.google.com/presentation/d/1RgiqeOwXdA6_HsyjhTyKhq1S51tB3GOj0kInQsItLh4/edit#slide=id.g99918596f_0_129

62

Young Adults Living with Parents

Source: Pew Research Center: http://www.pewsocialtrends.org/2016/05/24/for-first-time-in-modern-era-living-with-parents-edges-out-other-living-arrangements-for-18-to-34-year-olds/

63

Question #3: Thoughts? Comments?

64


Action Steps

65

Generational Overview

Source: Hagen Jokela, Hendrickson, & Haynes (2013). Teaching Financial Literacy Across the Generations. Journal of Extension, 51(1); https://www.joe.org/joe/2013february/tt6.php 66

General Financial Action Steps

Source: David Lerner Associates’ Guide to Smart Retirement Strategies, David Lerner Associates, Inc., Syosset, NY

67

Blog Post about Generations Source: https://moneytalk1.blogspot.com/2017/07/personal-finance-tasks-by-decade.html

68

Millennials (Gen Y) Age 17-35 in 2017 (b. 1982-2000) • Train for a career and establish a household • Learn to budget and “pay yourself first” • Organize a repayment plan for student loans • Build an adequate emergency fund • Fund a Roth IRA account for retirement savings • Start 529 plans or other savings plans for

children • Build a positive credit history • Minimize taxes (e.g., tax credits)

69

•  Explore financial institutions (bank, credit union, etc.) •  Increase investing expertise •  Invest for the long-term in stocks/stock mutual funds •  Buy life insurance to protect dependents and/or

private student loan co-signers •  Teach children about personal finance •  Balance YOLO/FOMO mindsets with financial

security •  Avoid “hoarding cash” to avoid investing •  Develop a personal financial identity

Millennials (Gen Y)

70

Generation X Age 36-52 in 2017 (b. 1965-1981) •  Don’t forget about old retirement savings plans •  STILL invest for the long-term in stocks/stock funds •  Diversify investments and rebalance portfolio •  Enhance employment skills (build human capital) •  Try to “max out” retirement savings plan deposits •  Talk to aging parents about their finances

•  Consider hiring a financial adviser

71

•  At age 50, save more for retirement with catch-up provisions for IRAs and employer savings plans

• Manage increased need for credit and insurance

• Understand that retirement savings generally trumps college savings

• Don’t neglect health in pursuit of wealth •  Prepare a will if one wasn’t already created

Generation X

72

Baby Boomers Age 53-71 in 2017 (b. 1946-1964) • Decide when to take Social Security benefits • Determine a retirement income strategy (e.g., 4%

Rule) • Learn about Social Security, Medicare, and pension •  Investigate later life housing and living costs • Learn about required minimum distributions (RMDs) • Try to pay off all debt (including a home mortgage)

before retirement • Start taking advantage of “senior discounts”

73

Baby Boomers

•  Consider long-term care insurance or earmark a portion of savings to “self-insure”

•  Invest in college savings plans for grandchildren •  Consolidate accounts for simplification •  Consider taking classes and/or building networks

for a “second act” (e.g., freelance work) •  Review estate plan and adjust as needed •  Care for aging parents or other dependents •  Make the most of remaining paychecks to save for

retirement

74

Mature/Silent/Traditionalists Age 72-90 in 2017 (b. 1927-1945) •  Get more strategic about philanthropy (e.g., large

gifts, charitable trusts, donor advised funds, etc.) •  Talk to children/heirs about finances and estate

plan •  Streamline/consolidate financial accounts •  Gift heirlooms while alive to see recipient enjoy

them •  Downsize and/or donate “stuff” •  Hire help as needed (e.g., yard work, cleaning)

75

Mature/Silent/Traditionalists

•  Make it easy to manage money and pay bills (e.g., direct deposits and automatic withdrawals)

•  Make sure family members know where to find personal and financial documents

•  Adjust lifestyle to a declining real income, if needed •  Take RMDs from retirement savings plans •  Regularly review beneficiary designation on life

insurance and retirement savings plans

76

Don’t Forget Generation Z!

Video: https://www.youtube.com/watch?v=K1HyDn7dZ1o

Born 1994-2010 (approx.) next cohort of future employees

Video: https://www.youtube.com/watch?v=I7N1JJo6eFg

77

Gen Z Take-Aways

•  Make up 25 percent of U.S. population •  62% anticipate challenges: work with Boomers/Gen

X •  Realistic thanks to skeptical Gen X parents,

recession •  Competitive with “do it yourself” mentality •  74% prefer to communicate face-to-face •  75% say there are other ways to get a good

education than going to college Source: https://www.inc.com/ryan-jenkins/generation-z-vs-millennials-

the-8-differences-you-.html 78

The Military Lifecycle

Source: Consumer Financial Protection Bureau (CFPB) Office of Servicemember Affairs: https://s3.amazonaws.com/files.consumerfinance.gov/f/documents/201705_cfpb_OSA_Military-Lifecycle-Report.pdf

79

Question #4: Other action steps by

generation?

80


Resources

81

Journal of Financial Planning Blog Post

Source: https://practicemanagementblog.onefpa.org/2017/06/27/be-a-gen-savvy-planner-take-off-your-generational-lenses/

82

A Classic: Journal of Family and Consumer Sciences Article

Source: O'Neill, B. and Brennan, P. (1997). Financial Planning Education Through the Life Cycle. Journal of Family and Consumer Sciences, 89(2), 32-36.

83

Military Saves: Financial Strategies by Generation

Source: https://militarysaves.org/blog/1296-financial-strategies-by-generation 84

Life Cycle of Financial Planning

Source: Family Economics and Financial Education: http://www.ktufsd.org/cms/lib/NY19000262/Centricity/Domain/94/Life_Cycle_of_Financial_Planning_PPT.pdf and http://mainstreetwealthgroup.com/wp/wp-content/uploads/2011/12/Life_Events_of_Financial_Planning.pdf

85

Financial Tips for Generations

Source: http://www.360financialliteracy.org/Topics/Budgeting-Spending/Budgeting-Saving/Real-life-Financial-Tips-for-Different-Generations 86

Teaching Different Generations

Sources: https://www.joe.org/joe/2013february/tt6.php and https://www.slideshare.net/sondramilkie/teaching-financial-literacy-engagement-of-multigenerational-learners

87

NEFE® White Paper

Source: http://toolkit.nefe.org/Portals/0/NEFE%20Evaluation%20White%20Paper%20October%202016.pdf?ver=2016-10-31-154554-707

88

Question #5: Other good

generational personal finance resources?

89

Key Take-Away for Practitioners: Don’t Impose YOUR “Social Clock” on Other People! Social Clock: “a cultural timeline of expectations of what people should do at a certain age” (William Doherty, U of Minnesota)

–  Late 20s/30s: “So when are you two going to have a baby?”

–  Late 50s/60s: “So when are you going to retire?”

–  Late 60s/70s+: “Are you still working? Why?”

https://www.wsj.com/articles/its-ok-to-party-when-you-turn-60-1500914273 90

Connect with MFLN Family Transitions Online!

MFLN Family Transitions

MFLN Family Transitions @MFLNFT

MFLN Transitions

91

Connect with MFLN Personal Finance Online!

MFLN Personal Finance

MFLN Personal Finance @MFLNPF

PF SMS icons PF SMS icons

92

MFLN Intro

We invite MFLN Service Provider Partners to our private LinkedIn Group!

https://www.linkedin.com/groups/8409844

DoD Branch Services

Reserve Guard

Cooperative Extension

Evaluation and Continuing Education Credits/Certificate

MFLN Personal Finance grants 1.5 credit hours for today’s webinar for AFC-credentialed through AFCPE and CPFC-credentialed participants through FinCert. MFLN Family Transitions issues a certificate of attendance to those interested in receiving one from today’s webinar. Please complete the evaluation and post-test at: vte.co1.qualtrics.com/jfe/form/SV_ebMoeIoNIBF2eZT Must pass post-test with an 80% or higher to receive certificate.

94

Personal Finance Upcoming Event

2017 Personal Finance Year in Review •  Date: Tuesday, Dec. 5, 2017 •  Time:11 a.m. ET •  Location: learn.extension.org/events/3070

For more information on MFLN Personal Finance go to: militaryfamilies.extension.org/personal-finance For more information on MFLN Family Transitions go to: militaryfamilies.extension.org/family-transitions 95

militaryfamilies.extension.org/webinars

This material is based upon work supported by the National Institute of Food and Agriculture, U.S. Department of Agriculture, and the Office of Military Family Readiness Policy, U.S. Department of Defense under Award Number 2015-48770-24368.

Documents

PF SMS icons - Military Families Learning Network · Family Readiness Policy, U.S. Department of Defense under Award Number 2015-48770-24368. Financial Planning Transitions for Different