← The Prof G Pod with Scott Galloway
The Prof G Pod with Scott Galloway
The Future of 401(k)s, Choosing Single Parenthood, and Caring for Aging Parents
00:18:28
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Tuesday on NBC Jimmy Fallon and Bozma St. John host the highly anticipated new competition show. I hired 10 creatives from all walks of life. They will be battling it out to see who can impress the world's biggest brands. This is a huge opportunity. This is the battle for the next big idea. Not play play. We're spending millions of dollars. I'm so excited to embark on this adventure with all of you. May the best idea win on Brand with Jimmy Fallon. Series Premiere Tuesday on NBC welcome to Office Hours of Prophet G. This is the part of the show where we answer your questions about business, big tech, entrepreneurship and whatever else is on your mind. If you'd like to submit a question for next time, you can send a voice recording to office hourspropertymedia.com Again, that's office hourspropertymedia.com or post a question on the Scott Galloway subred and we just might feature it on our next episode. First Question I have not seen or read these questions. Our first question comes from AgentSanity5596 on Reddit. They say hi Prof. What is your view on the success of 401s as a way of building retirement savings in America? They've been a great tax efficient way to build wealth. On the other hand, they seem to favor higher income earners with steady employment. Not everyone has access to a 401k including gig workers. Not everyone can afford to contribute and life expectancy is increasingly longer. As Americans, we rely on our employers for good healthcare and retirement savings. I Also know some people have saved well but have been laid off in their jobs mid career and face ageism while trying to get back into the workforce. So my question is, what do you think about this and what might you suggest as an alternative way for Americans to fund their retirement other than Social Security, which is a whole other discussion. Okay. 70% of private sector workers now have access to some sort of 401k style plan and that's up from 60% a decade ago. So it is growing. The average savings rates are about 14% of income and that's great. Actually one in seven dollars, that's close to the recommended 12 to 15%. As of early 2025 the average balance is $127,000. And the number of 401 millionaires is near record highs around 600,000. Thanks to stock market gains compounding and long term saving habits. The drawbacks, as you mentioned, 30 to 60 million workers, especially low wage, part time and gig workers, lack access to employer retirement plans. Gig workers are disproportionately undersaved. Roughly 30% have no retirement savings at all. And even though adoption has picked up recently, about 40% of the working population isn't saving enough to maintain their lifestyle throughout retirement. There is some risk here. 401 accounts are more stock heavy than ever. Workers in the late 30s now hold about nine in 10 of the assets in their 401 and equities. That's up from 82% decade ago. Because the returns of Spode is so exceptional that people are, you know, if you're under the age of 40, you don't believe that stocks go down more than one year in a row. They can, they can go flat for a decade or even down even early 60 savers have 60% in stocks and total equity exposure in 401ks reached $9 trillion in 2024 driven by strong demand. And there kind of is no alternative mentality reliance on a few mega stocks including Nvidia. Now 8% of the S and P raises concentration risk. So first off, the first thing you do when you take any job is you want to find out what type of tax deferred or tax advantaged investments and matching programs there are and immediately max them out. Because one just a human nature. 90% of us will spend everything that comes into our hands. So you want to find saving mechanisms that keep the dollar out of your hand. You are going to be hit. The smartest people on the planet aren't trying to put a person on Mars or solve world hunger. They're trying to figure out a way to use technology to you on a screen at the exact right moment when you're in the exact right move. So they can sell you a pair of bomba socks with your on running shoes at the exact right moment, or get you to upgrade from economy to economy comfort. It is nearly impossible not to spend as much or more money than you have in this environment. And the deepest, deepest, most talented companies in the world are basically there just to do that. And that's to figure out a way to grab you by the ankles, turn you upside down and shake you. So forced savings are a great way to build wealth. Housing or owning a home has been a great way to build wealth. Now, is that because it outperforms other asset classes? No, if you include maintenance and taxes, it's probably, probably underperformed the stock market. But people don't like to have their home foreclosed on, so they generally make that mortgage payment and slowly but surely the value in their house should grow tax deferred to kind of build wealth. Because of its forced savings mechanism that's built into it. And you want to implement the same type of thing for you. So for example, you want to download the Acorns app, which rounds up your purchases to the nearest dollar and then automatically invested for you and people, one of the flaws in our species is we just don't recognize how fast time is going to go. And that is when I was 22, I remember going to the beach with my friend Lee Lotus and he was putting money. We scrambled say I need to find $2,000 to put in my IRA or 401k and I'm like, dude, if in 50 years I needed $22,000 in my 401k, take me out and shoot me. Okay? Someone should take me on and shoot me. Because my friend Lee is now a multimillionaire and he's made really good money his whole life. But he's never been like, he's never sold a huge business or anything. But because he started saving 2,000 bucks a year, you save $100 a month from the age of 22, you're gonna be a millionaire by the time you're 65. 100 bucks start now. I moved to London yesterday. It's been over three years. I was applying to college yesterday. I drove my son to take the act on Saturday. Time is going to go fast. You want to have $100,000 to $800,000, $2 million in a forced savings IRA. 401 plan or not. If the answer is yeah, maybe I'd like that. Start now. Question number two also comes from Reddit, Morocco212 asks. Hi Scott, you speak a lot about the joy of being a parent, but I would love to hear your thoughts about consciously, deliberately deciding to be a single parent. I live in New York City and I'm getting to the age where if I don't have a child soon, I will not be able to easily have one. I have yet to meet someone with whom I want to raise a child though, and I'd strongly considering going through IVF raising a child on my own. I would love to hear your thoughts, pro or con. Thanks. This is a very personal decision, so a lot of it, quite frankly, just comes down to a couple things. One, do you have the money? If you don't, I just would take it off the table. I just don't think you want to create that kind of stress in your household. I was raised by a single immigrant mother who lived and died as secretary lie to my life. It worked out. We had a nice life, she had a nice life, I had a nice life. But there's just no getting around it. It was stressful not having money. And two, do you have a support system in place? And it doesn't have to be a man. It can be friends, family, good friends. But do you have either the economics or the support system to make sure that you're kind of playing not one on one coverage, but zone coverage? And that is you can have some semblance of time and a life yourself for working out for your own health, to advance your own professional career, because kids require a ton of resources and time and attention. One of the wonderful things about having kids is that I'm a pretty selfish, narcissistic person, which made it difficult when I had kids my first few years because I was pissed off I didn't get to go have brunch and be fabulous with my friends every weekend because of this little alien that I was charged with keeping alive on weekends. But the thing I really began to love about it was for the first time in my life, I began to think about something other than me. And I found that quite liberating. Actually, I found it sort of relaxing at a certain point. Like, oh no, how do I be more fabulous this weekend? Well, I don't need to worry about that because I'm going to soccer practice and then some lame birthday party on Sunday with the other dads where we all look at each other like Jesus to believe we have to put up with A shit of Chuck E. Cheese. But anyway, I like that women are having kids without necessarily having a romantic partner. I think it's a sign of progress, but there's just some reality. So I'm not going to sit here and say, yeah, go for it, girl. You know, These are difficult questions and they require really open, honest conversations around money and around the support system. Having said that, there is never the right time to have a kid and it's especially tough on women because the reality is you face a much more, I don't know, cruel or unfair clock than I do. So I understand the sense of urgency and I think if you're thinking this way, it means you want children. I don't know, do you really want kids or is it society telling you to have kids? If you really want kids, then I would say put yourself on some sort of financial plan and put in place the infrastructure such that you can do that. And I have friends who've had kids out of wedlock and said, that's it. I'm just going to take care of the kid on my own. Most of them had money and it's unfair. I'm not talking about the way the world should be, but the way the world is. Other countries have much more infrastructure. So let me finish where I started. Deeply personal decision. Having said that, having a kid has given me purpose. My purpose or kids, I should say. My purpose at the beginning of my life was to be rich and awesome such that I could take care of my mom and attract, you know, and attract potential mates. That's what I wanted. I wanted to be more interesting to other people. I wanted to be more attractive to women and I wanted to take care of my mom. And then when I was fortunate enough to check those boxes, it was kids that now are my sense of purpose. My only goal right now in sense of purpose, as I barrel towards the end and I ask myself, what's this all about? It's simple. I'm here to raise good men, full stop. That's why I'm here. And it's been very rewarding. So I empathize and understand your desire to do it. I think having kids is wonderful, but there's some practical realities that the world forces on us. Oh, my God, what a word salad. I wish you the best around this important decision. Thanks for the question. We'll be right back after a quick break. Support for the show comes from LinkedIn. We say this all the time on our show, but it bears repeating. Running a small business isn't just a full time job it's about a dozen full time jobs that you rarely, if ever get to clock out of, at least until you get to the point where you can start hiring the dream team. And if you've made it that far, you already know there's no time to mess around. That's you where where LinkedIn jobs comes in LinkedIn makes it easy to post your job for free, share with your network and get qualified candidates that you can manage all in one place. And LinkedIn's new AI feature can even help you write job descriptions and then quickly get it in front of the right people with deep candidate insights. And if you decide you want to go the extra mile to find the perfect candidate, LinkedIn says that promoted jobs get three times the number of qualified applicants. It's all these little things that let you find help fast without compromising on quality, which add up to you finally having extra time in the day for, I don't know, relaxing or knowing my listeners. You'll probably use that extra time to expand your empire even further. Post your job for free@LinkedIn.com Prof. That's LinkedIn.com Prof. To post your job for free. Terms and conditions apply. Support for the show comes from Upwork Hiring shouldn't be a hassle or drain on your budget. Thankfully, Upwork is your one stop shop to find, hire and pay top freelance talent, saving you time and keeping costs in check all in one place. Upwork is the hiring platform designed for the modern playbook. With more than two decades of experience, Upwork has a simple and ambitious goal to pioneer a better way of working. Companies at every stage turn to Upwork to get things done and find more flexibility in the way they staff key projects and initiatives. By accessing a global marketplace filled with top talent in it, web development, AI design, admin support, marketing and more. Plus, Upwork makes posting your job easy with no cost to join, you can register, browse freelancer profiles and get help drafting a job post or even book a consultation. Post a job today and hire tomorrow with Upwork, visit Upwork.com right now and post your job for free. That is Upwork.com to post your job for free and connect with top talent ready to help your business grow. That's upwork.com upwork.com foreign we all have goals in life. Maybe you want to start a business, maybe you want to start a family, or maybe you want to throw a couple of pairs of socks and a frame pack and travel around the world. Whatever your hopes and dreams are, betterment can help you save and invest to get there. Betterment helps people and small businesses put their money to work. They automate to make savings simpler, optimized to make investing simple, smarter, and build innovative technology backed by financial experts. Whether you're saving for retirement, a down payment on a house, or your kid's education, Betterment's goals based outlook helps you ground your financial decisions in your actual life. Their globally diversified portfolios help give you a solid financial foundation in turbulent times, and their tax smart features can help you save money. So if you want to stop worrying about how you're going to get there and start thinking about where you want to go, betterment might be a good option. Don't just imagine a better future, start investing in one with betterment. Be invested in yourself. Be invested in your business. Be invested with betterment. Go to betterment.com to learn more. Investing involves risk Performance not guaranteed welcome back onto our final question.
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Hey Prof. G. This is a question about balancing career and personal pursuits with the responsibilities of being a good son. My brother and I both live in major cities far away from our aging parents. While we've benefited from city living, I feel guilty about the distance, especially with my father's declining health. My parents would never ask us to move. They don't want that for us. Moreover, they seem committed for staying for financial and social reasons. But I don't see how this works as they age and as they need more support. What advice would you offer young men who have chosen to live far from aging parents but worry about responsibilities that they hold as sons? P S I'm sorry to hear about your father. It's clear in the way you've spoken about him that his life left a lasting impact for many. Thanks very much.
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Look, this is a tough one and my general sense is it sounds like your parents have each other. It sounds like they're doing pretty well and it sounds like you are benefiting from living where you are. So my gut is that as you get older they're going to get sicker and at some point you and your brother are going to have to be pretty involved in their lives. And I'm not saying this is the right way, but this is my way. And it's two different sides of the coin. I was much closer to my mother than my father. My mother raised me on her own. I was her top priority. It was me and her against the world. So when she got sick, I actually moved in with my mom. I took nine months leave of absence from nyu. I was fortunate. I had some Money, some resources, and I had the ability. And I moved into a seniors community, the Del Webb Active Living Community. True story. They sent a letter to my mom's house saying, it's become clear you're cohabitating with a man under the age of 50 in violation of HOA, Del Webb Community rules. And I had to go down there and say, I'm her son. She's dying of cancer, and I've moved in to help take care of her. And they said, we're sorry. No problem. Anyways. And during the day. Let's get this back to me. During the day, I would manage my mom. It was her third time with cancer. She said. I said, all right, what do you want? What's your bucket list? She said, I only have one thing on my bucket list. I want to die at home. And I'm like, okay, I can think. I can figure that out. So during the day, I would manage her healthcare, a nurse. There's certain things I just can't do for my mom. And at night, I would head down to the Strip. She lived in a suburb of Las Vegas called Summerlin. And I would party with entrepreneurs and strippers and get really shitty drunk and sometimes spend the night on the Strip at a cheap hotel during the week for 49 bucks. And then the next day, I'd go back and hang out with my mom all day and watch Jeopardy. And take her on walks and push her wheelchair and watch Everyone Loves Raymond and then go out again. Kind of a weird time in my life. Kind of a weird time. And then when those. That thing resolved, I then started my life again. And that is something that I would treasure the rest of my life. That I had made enough money, had enough flexibility to give my mom, like, a fraction of the love back she had given me. That was. I will treasure that for the rest of my life. You know, these are, again, very personal questions, but some people, their reason for being, their center of gravity is family, and they want to be around their family. And if that's the case, okay, make those sacrifices. But if you're doing well, especially in a city. You mentioned the term city living. Two thirds of all economic growth is going to be in one of 20 super cities. And what I tell young people is if you want to be economically secure, you got to get to a city. Or if you want to be in the top 10%, much less the top 1%, of economic security or influence, you got to be in a city. And if you're just an economic animal, which I was in my 20s, 30s, and 40s. Get to the biggest city in your country, get to a super city, and that's where you make your career. That's where you find opportunities. You're just in a. You're in a room of opportunities all the time when you're in a city. Long winded way of saying the following My gut is your parents are doing well and they have each other. My gut is you are benefiting based on what you're saved from being in a city which says to me there's no reason you can't be close to your parents now and kill it professionally, personally and emotionally. Sticking where you are, knowing that at some point you're going to have to be more involved in their lives and that mental and economic wellness that you will accrete by that point will help you do a better job with a reduction in the amount of stress that is naturally part of the process when they get really old. In sum, I'd probably stick where you are. And finally, I don't know all the nuance of the situation, so I'd have very open and honest conversations with your brother and friends or people who understand the situation and can better advise you. I very much appreciate the question and the fact that you're even thinking this way means you're a good son and means your parents are good people or did a good job with you. That's all for this episode. If you'd like to submit a question, please email a voice recording to officehoursovagingmedia.com that's office hourspropagymedia.com or if you prefer to ask on Reddit, you can just post your question on the Scott Galloway subreddit and we just might feature it in an upcoming episode. This episode was produced by Jennifer Sanchez. Drew Burrows is our Technical director. Thank you for listening to the Prophecy Pod from the Vox Media Podcast Network.
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