Carrie Hannon (6:06)

Thanks Jean. I love being on this show with you.

Jean Chatzky (6:10)

Let me just Start from the top. The title of your book, Retirement Bites, is clever. I think I get the reference. It's also a little ominous. Tell me about it.

Carrie Hannon (6:22)

Oh, well, good question. Because frankly, I was kind of. I said to my editors over at Hachette, I said, doesn't this sound a bit negative? Can we do Money Nirvana? Talking about, you know, off of the band. But no, they wanted to go with Retirement Bites. And the thing is, Gene, what it refers to is, you know, obviously it's a. It's a flashback to the movie that came out back in the 90s and looking at sort of the anxieties and the uncertainties of Gen X as they approach adulthood. And so this is really referring to that same sort of angst and anxiousness and nervousness about approaching retirement. And. But, you know, we give it a positive spin in the sense that we're saying, yeah, Retirement Bites. We're going to go with that. We understand the anxiety, but guess what? We're going to help you take that away.

Jean Chatzky (7:11)

I got to say, I loved Reality Bites. I mean, when it came out, I loved it. I think it was one of those movies that I had on repeat on cable for quite a few years. What is it about retirement right now, though, that feels like it bites for so many Gen Xers?

Carrie Hannon (7:25)

Well, I think in your intro, you alluded to this really nicely. It's that Gen X really is caught between this massive boomer generation and the millennials coming up behind them. It's a generation that a lot of people, frankly, don't they forget about. Like, they'll go right from boomers to millennials. Nobody even mentions Gen x when there's 64 million gen Xers out there. And so there's a lot of people in this cohort between age roughly 44 and 60. And the fact is, there have been these economic challenges. The. The whole business with the 401k coming on stream, oh, my goodness. Nobody knew what it was, what we were supposed to do. Nobody gave us the financial education to even know what to invest in. And frankly, there weren't very many options, nor could you put very much money into a 401 at that time. But do it yourself. Retirement, all of a sudden, that was the name of the game.

Jean Chatzky (8:19)

I think I was a classic case. I got my first job in 1986, right after graduating from college, and my employer had a 401k and I was put into the 401k, but never told what it was. Never told what to do with it. Never told, oh, you should be Putting X amount of your paycheck into this account and then investing it in things that I had never even heard of, like mutual funds. And so as a result, when I left that job about two years later, I didn't do anything. And so I got a check in the mail on which I had to pay taxes. And I just was, frankly, I was thrilled. I took the money and I went shopping for clothes for my new job. But I did go back through the exercise of figuring out if I had done that 401k right at the time, what the money would be worth worth. And it is really not insignificant. Which is why I think when we do a Google search, we come up with headlines like Gen X is in Trouble and Retirement plan in crisis. Do you think that this generation is more unprepared for retirement than others?

Carrie Hannon (9:41)

I frankly do. And. And I don't think that means to be a roadblock. I mean, I think there is still Runway ahead to change this dynamic for many Gen Xers. But I do honestly believe the financial education piece just wasn't there. I think millennials have a better opportunity and definitely Gen Z because they're automatically being enrolled in these accounts into target date funds, which are a nice asset allocation kind of helping giving them that boost in automatically increasing that contribution each year if you have an employer plan. But the Gen Xers often are contractors. They're not always in house. They don't always have an employer provided retirement plan. Boomers, some of them did have traditional pensions, some of them had both. I mean, and so they had that opportunity. Gen X really never got pedal to the metal quite in the same way that the focus in the younger and the older generations were and the wealth of the boomer generation because of rodding, some pretty good times. I think it's a different retirement scenario in many ways. I will add though, some Gen Xers, and this is more. It's almost like Gen X is two different groups, but the younger ones may very well get an opportunity to have that generational wealth transfer from boomer parents. I mean, that is a possibility. So they may get a bit of that. The older Gen Xers probably not so much.

Jean Chatzky (11:04)

You mentioned that this is an optimistic. But which I appreciate. And part of the reason that you're optimistic, I know about Gen X, is that you say we're scrappy, which is a great. It's a great quality. How will that help us deal with these issues?

Carrie Hannon (11:26)

I think Gen Xers get it done right. Gen Xers were the group that like they got home from school Nobody was there. They figured out how to do their homework all by themselves. They didn't have helicopter parents and very self sufficient. And this comes to a real benefit when they get to this stage in life because they're nimble, they can figure out, okay, what are the solutions. They may like go like be kind of uber cool about looking at it, but in fact they get it done because they're nimble and they can say, okay, you know what, I think I'm going to work a little bit longer. In fact, most Gen Xers who I spoke to for the book and Jana did all said that they don't have any hard retirement date in mind. They plan to continue working, maybe not as hard as they do right this minute, but they see work as part of the retirement plan, paid work. So they're thinking about career transitions, they're thinking about ways to be flexible and how they look at their life holistically. And because Gen Xers often thought about the balance of life in a different way than maybe the hard driving boomers might have been, they, they've always been about putting a little more balance, you know, whatever it might be, they're a little more holistic in the way approach it. But I, the ones I spoke to really know that they have the capacity to learn about finances. They understand that it's easier than ever to get going with a great investment plan.

Jean Chatzky (12:46)

You write about a fascinating survey from the FINRA Investor Education Foundation. It looked at Gen X's financial behaviors compared to Gen Z and millennials and boomers. And on paper, interestingly, the numbers aren't terrible for Gen X. Retirement savings are happening, but our feelings about money are overwhelmingly negative. Why do you think the disconnect is there?

Carrie Hannon (13:15)

It's this sort of angst that sort of identifies this generation in a way because I think they were caught up in a lot of economic and society and cultural changes and they, they took on an attitude like it doesn't matter whatever. And so that does translate, I believe, in the way they answer some of these surveys and the way they address that. That said, when I look at another study like Transamerica did, one where there's increasing number of Gen Xers who are super savers, like they're saving like crazy. So I mean there's sort of this contrast in how they express themselves and what they're actually might be doing. And in addition, I love that FINRA study because there's one point that they made is people who are optimistic about their future, their financial future, tend to get there. You know, they tend to be the most successful ones. So it's a lot about changing your mindset and being able to approach this not with wringing your hands but saying, well, how can I not? How can't I?

Jean Chatzky (14:16)

And the ones who are optimistic, how are they getting there? I mean, when I think of Gen X, one of the other factors in the equation that I think has been maybe not talked about as much, but a real challenge is debt. I mean, Gen Xers were the first generation with significant student debt, lived through the housing bubble and burst where we were using our homes as ATMs and credit card balances were off the charts. Can you tell me how they're navigating this optimism with this big factor of being able to borrow so much more than previous generations?

Carrie Hannon (14:59)

Oh gosh, Jean, I'm so glad you brought that up. That is a huge factor for this generation is that credit cards became ubiquitous. You know, it was the easiest thing to do is to pay off one credit card with another credit card, sign up for another credit card. There was a lot of marketing as this generation became adults to get as much plastic as possible. And the fact is debt is a huge stumbling block for Gen X in a way that, that it's hard to imagine. As you mentioned, student debt is they may have more student debt than any generation at this point and credit card debt and student debt are the two biggies for them. But we mentioned the home equity bit and though they did use it as an ATM going forward, many Gen Xers actually have built up some pretty good equity in their homes. So that is going to be a bright light as they move forward into this stage where they may want to pull more of that equity out or relocate to a place where the cost of living is a bit less, that kind of thing, be more intentional about where they live. So that's a plus. But you are absolutely correct. This debt is something that often when I'm sure the people you speak to, as I do, that's one of the first things you say. Yeah, you want to start investing, you want to make sure you really understand what you've got going here and by all means make sure you've got equities and stuff to have some growth. But you've got to tackle this debt. You know, people often have that choice, do I pay down my credit card or do I? And the other piece the Gen Xers are stuck between, they've got their kids, you know, maybe college age kids at this point they're paying for their tuition. So they not only have their own student debt. They have their kids student debt. They're monitoring as well. And then they have aging parents so that they're taking care of and they're responsible financially for in many ways. So as they call it what the sandwich generation. This is a real concern.

Jean Chatzky (16:51)

It's a concern. But you have developed a methodology to help people sort of harness all of these factors and get to the other side with a more positive approach to their coming retirement. It's called the hover method. I want to get into it in just a sec, but before we do that, we're going to take a quick break.

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Jean Chatzky (18:16)

We are back with Carrie Hannon, co author of the new book Retirement Bites. So you created with your co author a methodology called Hover that you use to help people create a positive mindset for their money in retirement. Because as you pointed out before the break, optimism goes a long way to ensuring success. So can we talk about how you develop this and tactically how to put it into play in your life?

Carrie Hannon (18:49)

I will do my best. It is such an individual opportunity to kind of tease apart the different aspects of your life. But the hover method for me is I think it's good for everything in life, but it certainly is good for looking at your future, the decades and retirement. So you the H stands for hope. And it's not a corny thing. I mean, hope is something that if you don't have this sort of essential world that in fact things can be better.

Jean Chatzky (19:19)

Right.

Carrie Hannon (19:20)

It's not optimism. Optimism is a bit different. Hope is sort of this inner feeling that you see a future ahead of you and that there is Something out there for you. So that often takes just really that self evaluation of trying to. These basic exercises that people tell us all the time about gratitude and trying to, you know, stay present and focused and look at the awesome things around you each day. It's kind of like, oh, my gosh, like right now I'm looking out at this beautiful crepe myrtle outside of my window that's this popping pink that's outrageously beautiful. And I'm thinking, God, nature is just amazing. So it's that kind of thing. Optimism is another thing. Optimism is understanding that things may not be great right now, but in fact, you have the ability to turn that tide to make a change. And there are ways that you become optimistic by adding value to your life. And many of those things are simply adding skills or learning new things. And again, this plays it into some of the other values. But I think if you start, even if you learn how to do glassblowing, I mean, it doesn't have to be related to work. It's learning something new, and that just excites you and it gives you this optimistic look at the world because you get excited again. V is value. Okay? Do you value yourself? You have got to say, hey, you know, I'm pretty cool. I got some amazing things to offer the world. And in fact, I value that. I am smart enough to figure out this retirement thing, and I don't need lots of hand holding. I might need a little. But value is, again, adding new things to yourself, constantly making new friends, reaching your network, and learning new things. The E is enthusiasm, which you can see, is one of my favorite things, because if you're enthusiastic, man, people want to be around you. People want to work with you, they want to want to be part of your team. They. It just makes the world a little bit brighter, but it often brings opportunities to you, and it also gives you this. This voom. And this energy to like, ignite all these other things. So we have H O V E and R is resilience. And my goodness, we all need to be resilient. There are setbacks over and over again through life. We do this again and again at every stage of our life, right? We become beginners, then we become experts, and that's the whole ebb and flow of our lives. So again, being resilient is what you're going to need to get through all of these next chapters. And if we're talking about investing, there will be setbacks in your. The value of your portfolios and your retirement accounts. And you, you Kind of get through all that. And again, resilience once again comes down to being willing to learn new ways of doing things.

Jean Chatzky (21:55)

Yeah. What I love, particularly about optimism and resilience, your O and your R, is the huge amount of academic research that says, yeah, there are some people who are born with more of these qualities than other people. But if you make an effort to become more optimistic, if you make an effort to become more resilient and totally possible, these are learnable skills, which is important because we are going to have to tap dance a little bit. We are going to have to make changes. Just to put one example on the table, a lot of Gen Xers have experienced lifestyle creep as our salaries have gone up. We've gotten bigger homes, we've gotten nicer cars, maybe we've gotten a second home. It's hard to give things up. But recently Goldman Sachs issued a report that said, look, if you are feeling behind, it's time to get a little lean and a little mean. How do you encourage people to do that without feeling like they are compromising to give up this life that they've worked so hard for?

Carrie Hannon (23:07)

Yeah, it is super challenging for people and there's some very basic ways to get started, but the number one thing is to really do that inner MRI, I call it, and like, get real with yourself. What do you really value? Yeah, you have all these accoutrements now. You've added these bells and whistles to your life, but how much meaning do they have for you? Like, get real with yourself. And this is not an easy exercise to do, but you can do it bit by bit of the different things in your life and say, how much joy am I getting from this? And that sounds like this sort of ethereal kind of thinking, but it really comes down to hard cash when you can monetize your joy this way. So look at it in that picture and it's doing. Gene, you talk to people about this all the time. The importance of budgeting. It's really. Do you know how you're spending your money? Many people don't actually at this stage in life, there's so many things are going in all kinds of different directions and they have lots of competing priorities for the money and they may have lost track of what actually goes out and, and what actually comes in. So it's doing that, that very basic exercise of what are my essential spending costs that I have to have every month and what is the stuff I'm doing because I've gotten in the habit of doing it or that Somebody else in my family is pulling on that string. So the budgeting is really the first step you can take to take control of those spending. And then you need to be willing to have that open mindset to plan ahead. Like where do you visualize where you want to be? We said that the oldest Gen Xers turning 60 this year say you're 55. Like what do you see yourself doing at 60? Like where do you really want to be, where do you want to live? What kind of work do you might want to do? And you can do this at 62. Where do you want to be at 65? Anywhere you can give yourself a bit of a space, that breathing room to dream a little, think about what's next and that helps you start figuring out your true priorities. And to get fit, when I say about getting financially fit, is also your home is going to be one of the biggest things that you spend money on.

Jean Chatzky (25:10)

Right.

Carrie Hannon (25:10)

So if you can somehow figure out how could you downsize in a way that you're going to find is okay, do you really need two houses or do you, are you going to be just as happy living in a slightly different kind of situation? So housing and the other way to get financially fit going, and this is again, you need space, you got to get healthy, you've got to be paying attention to your health because that's going to be one of your biggest costs in retirement. Out of pocket medical costs.

Jean Chatzky (25:35)

Yeah. I'm always shocked at the proportion of our money that goes to just taking care of chronic diseases. Right. The asthma, diabetes. It's a huge portion of the health care spending in this country. You mentioned earlier that a lot of Gen Xers want to continue not just to work in retirement, but to work and earn in retirement. That's always been a goal for me. Right. Just to not to stop working, just to do a little less maybe of what I'm doing right now. But the landscape has gotten really, really challenging for people with particular skills. My soon to be son in law sent me this chart of and it was a look at an earlier generation. It was a look at recent college grads where the unemployment rates were the highest. Computer folks, tech people, software engineers were very high on the chart because AI is starting to change everything. So if you've got these skills that have been valued but are looking like they've got a future that might be on the line, how do you reskill right now and what do you think are the fields and the jobs that actually have a 10 year future at this point?

Carrie Hannon (27:03)

Yeah, it's tricky to say a really solid answer there, right? Because everything's changing so fast and AI is going to revolutionize the workplace. It's here, it's happening, it's coming. It may not be as quick as everyone says it's going to be, but there are ways to sort of embrace it and make it part of the way you do your work, to use it for research. There's all kinds of great ways AI can make our jobs easier, better allow us to add more value in a way maybe we didn't before. So again, it goes back to having that open mindset about lifelong learning or long life learning as people call it is you've got to constantly be adding new things and it doesn't mean getting a certificate or a degree, but always be open. If you hear about something, have that curiosity to think about. How can I add that to my, my wheelhouse in some way? So again, it's been open to the changes like that. And I think a lot of fields are dramatically going to change. I think the human element, for example, what you and I do, Gene, communication, AI, sure, it can do a lot with writing, it can do a lot with avatars too. You don't need you and me sitting here. That could be just, you know, bots talking to each other. But there's this human element that I believe is never going to go away and, and that added value that comes from it. So you just have to find a way to stay in the game that way. Of course, the big fields, education, healthcare, these things are part of our world. They are changing with AI, but they still, they're new jobs being created all the time, particularly jobs to riding this age wave. Jobs that help as people live into their 90s. There's jobs being created for people and to do those jobs.

Jean Chatzky (28:45)

Well, you, you talk in the book about people in their 50s and 60s doing jobs that serve people in their 70s, 80s and 90s. I think that's really interesting. Can you elaborate on that a little bit?

Carrie Hannon (28:57)

There's just all kinds of new ways that you get the. And some of them are just simply basic, like being almost a patient navigator for somebody who is going through as someone ages and they have more doctor's appointments, they have specialists, they have trouble with mobility. They need somebody who, who can help them navigate the insurance system, the Medicare system, Medicare Advantage, for gosh sakes. So if you have that ability, yes, there's a way AI probably could help that person, but they actually need a person like a human being who can help sit down with them and help them navigate it, whether it's taking them to appointments, whatever, that kind of thing. There's a service to be had there. There's a service to be had financially with financial management for people as they age. Someone who can, simple as bill paying stuff, you know, a senior fitness instructor. If you know any way to add value in those ways, move managers. People are downsizing. Can you help them? So there's all ways to slice or dice. I think it's a little like being creative about what could be out there, that I can add my skills to help somebody who's aging navigate their world a little bit better.

Jean Chatzky (30:02)

As we head toward the end of this conversation, Carrie, you quote Brad Sherman, Bradley Sherman in the book, and he says, retirement is not sexy. It is a traumatic period in your life. Can we focus on that for just a second? Traumatic is not the message that most of us have been sold about retirement. Why is the reality so jarring for people?

Carrie Hannon (30:23)

I just think we go for years without. It's somewhere down the road. It's out there. Retirement's like this hazy, like, oh, yeah, right. Someday maybe we think of our grandparents or our parents retiring, but it's certainly not us. So it's kick it down the road mentality. I think it's human nature to do that to a certain degree. And, and then you start hearing all this, all the sales jobs from all kinds of financial services companies scaring you, right? Saying this is, you're a mess. You don't, you have nothing saved. What is wrong with you that you kind of like hit the brakes and like say, I don't want to think about this at all. And then all of a sudden the reality that. And this could happen, Gene, and it's happened a lot in recent, in the recent years. You could lose your job, right? You could lose your job, be laid off, what have you at 60 and you're really not ready, or at 50 and you haven't really even addressed what retirement might look like. It's like one of those words that sounds just the word retire sounds like you're doing, you're stepping backwards in time and not like, oh, this is going to be a really great stage of my life. And I got to think about how I want to approach it so that it's affordable, that I have fun, that I'm all of those things. And you can do it. But you have to have a plan.

Jean Chatzky (31:35)

You have to have a plan. We are going to leave it there because the plan is in the book. Carrie Hannon is the co author of the new book Retirement A Gen X Guide to Securing your Financial Future. She wrote it with Jana Herron. Fascinating. Carrie, thank you so much for doing this with us today.

Carrie Hannon (31:54)

Thanks Jean. What a pleasure. I appreciate it.

Jean Chatzky (31:56)

If you love today's episode, please take a moment to leave us a few five star review on Apple Podcast. Your feedback means the world to me. And if you're ready to keep the Money conversation going, HerMoney has three amazing programs designed to help you feel more confident and in control of your money. There's Finance Fix. It's our four week coaching program that helps you rethink your spending, find hidden savings and make smarter choices for the future. Our pre retirement program runs for six weeks and walks you through building a retirement strategy that's personalized for your next chapter. Finally, there's Investing Fix, our investing club for women. It meets every other week on Zoom. It is a supportive space to learn, ask questions, grow your your investing confidence and build your portfolio. And your first month is absolutely free. These programs are truly helping level the playing field for women financially. I'd love for you to join us. Her money is produced by Hailey Pascalides and our music is provided by Video Helper. Thanks so much for listening and we'll talk soon.

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