401k_Balances_by_Generation
00:00:00.000 | - Hello everybody, it's Sam Ansinni
00:00:02.660 | from the Financial Samurai Podcast.
00:00:04.420 | And in this episode, we want to talk about why
00:00:08.060 | the 401k balances by generation,
00:00:11.060 | from Gen Z to boomers, are so low.
00:00:15.260 | So, Fidelity recently came out with its average
00:00:18.200 | and median 401k balances by generation.
00:00:21.280 | And they are as follows.
00:00:22.920 | Gen Z, the youngest generation,
00:00:25.420 | the average 401k balance is 7,100,
00:00:28.580 | and the median is 2,500.
00:00:31.680 | I don't fault those numbers at all.
00:00:33.920 | Seems pretty normal.
00:00:35.640 | But the millennials, the millennials generation,
00:00:39.240 | many of which are now 40 and over, early 40s,
00:00:43.280 | late 30s for sure, early 40s,
00:00:45.040 | the average 401k balance is 44,900,
00:00:48.480 | and the median 401k balance is 15,500.
00:00:53.080 | Now we move on to Gen X,
00:00:54.760 | which I am technically a Gen Xer, born in 1977.
00:00:58.940 | The average, 145,500,
00:01:02.800 | but the median is only 44,000.
00:01:05.740 | And then finally, we have the boomers,
00:01:08.080 | with an average of 215,000,
00:01:10.880 | and a median of 61,200.
00:01:14.740 | So, these numbers, millennials, Gen X, boomers,
00:01:19.100 | and if we look at the median numbers,
00:01:21.100 | this is a problem, folks,
00:01:22.860 | because how on earth are you gonna be able to retire
00:01:26.720 | with a 401k balance of only $44,000?
00:01:31.300 | And then for boomers, 61,200,
00:01:33.960 | I mean, how are you gonna live off that?
00:01:36.040 | Were these numbers shocking to you, Cindy,
00:01:37.560 | when you saw them?
00:01:38.680 | - Yeah, they were way lower than I expected,
00:01:41.600 | so I was pretty shocked too.
00:01:43.580 | - And this is the thing, though.
00:01:45.740 | You don't hear a retirement crisis in America
00:01:48.560 | where our elders are getting thrown out of their houses
00:01:52.980 | or starving on the streets.
00:01:54.540 | I mean, I don't see any kind of articles like that.
00:01:56.900 | Do you, Cindy?
00:01:58.020 | - No, nothing comes to mind.
00:02:00.400 | - Well, there must be a reason
00:02:01.460 | why there's no retirement crisis,
00:02:04.160 | given how low the average and median balances are.
00:02:07.000 | Really, we need to look at the median numbers
00:02:09.220 | instead of the averages,
00:02:10.240 | because several rich folks bring up the averages.
00:02:13.640 | So, we look at the medians and we say,
00:02:15.140 | well, things seem to be okay.
00:02:17.180 | And one of the reasons why is because our older generation,
00:02:21.260 | a greater percentage of them have pensions.
00:02:24.140 | Right now, something like only 16%
00:02:26.500 | of American working population has a pension.
00:02:29.860 | So, if you have a pension, consider yourself very lucky.
00:02:32.460 | It's like winning the lottery,
00:02:34.740 | because the value of a pension,
00:02:36.100 | if it's a lifetime pension,
00:02:37.760 | could be worth in the millions and millions of dollars.
00:02:40.260 | And I wrote a very detailed post
00:02:41.900 | about how to calculate the value of your pension,
00:02:45.460 | which you should check out in the show notes.
00:02:48.060 | Now, what other reasons could there be
00:02:51.940 | for why there's no retirement crisis
00:02:53.540 | with the median balances so low?
00:02:54.980 | What do you think, Cindy?
00:02:55.900 | - Well, one thing that you talked about in your post
00:02:57.900 | that is true for me is people change jobs,
00:03:01.420 | and typically when that happens,
00:03:03.180 | they roll over their 401(k) into a rollover IRA.
00:03:07.020 | And that's exactly what I did.
00:03:08.260 | So, I don't have a 401(k) anymore.
00:03:10.140 | I have a rollover IRA.
00:03:11.460 | So, Fidelity is just focusing on the accounts that they hold
00:03:15.380 | that are 401(k).
00:03:16.540 | So, there's other types of retirement accounts
00:03:18.620 | that people hold.
00:03:19.740 | - Right, and there's other 401(k) providers
00:03:22.340 | like Vanguard and Principal and many, many other ones.
00:03:26.020 | So, if you just look at the Fidelity numbers,
00:03:28.380 | it's like, okay, they're not that large,
00:03:31.160 | but Fidelity doesn't account for the entire 401(k) market.
00:03:35.300 | And me too.
00:03:36.580 | When I left my job in 2012, I rolled it over into an IRA.
00:03:40.480 | And the reason why I did so was because,
00:03:42.580 | one, I didn't have another job,
00:03:44.340 | so therefore I couldn't roll it over to another 401(k) plan
00:03:47.980 | because there was no other 401(k) plan.
00:03:50.340 | And just as a side note,
00:03:52.940 | I wrote a new post on the 60-day rollover rule,
00:03:56.460 | and the rule states that you have 60 days
00:03:58.540 | to roll over your 401(k) or IRA to another plan,
00:04:02.700 | and during those 60 days,
00:04:03.800 | you could actually withdraw some money
00:04:06.940 | and use it to do whatever you want,
00:04:10.580 | penalty-free, tax-free,
00:04:12.100 | so long as you put that money back within 60 days.
00:04:16.420 | It's a little bit complicated.
00:04:18.180 | It's not as easy as I just said,
00:04:20.020 | so take a look at that post,
00:04:21.380 | but if you need funds
00:04:22.980 | and you wanna tap your tax-advantaged accounts,
00:04:25.820 | there's the 60-day rollover rule.
00:04:28.520 | So, I decided to roll it over to an IRA
00:04:30.620 | because there was more flexibility.
00:04:32.760 | I didn't have to invest in the funds
00:04:36.020 | that were offered in my 401(k),
00:04:37.580 | so I was not a prisoner.
00:04:39.060 | I had maximum flexibility to invest in whatever I wanted,
00:04:43.140 | ETFs, low-cost index funds, single stocks.
00:04:47.140 | I had carte blanche flexibility,
00:04:49.500 | including fixed income as well.
00:04:51.900 | And so, overall, that has turned out pretty well
00:04:54.500 | because I invested for the long-term
00:04:56.380 | and I didn't trade my IRA,
00:04:58.700 | and that is something that people need to be aware of.
00:05:00.920 | When you roll it over to an IRA,
00:05:02.780 | you could have the temptation
00:05:04.860 | to start trading your portfolio,
00:05:07.220 | and that is almost always a bad move
00:05:10.340 | for returns long-term.
00:05:12.460 | So, guess what, folks?
00:05:13.580 | My 401(k) balance is actually quite small.
00:05:16.180 | I looked on my Fidelity account,
00:05:17.980 | and I have a solo 401(k),
00:05:20.620 | and it's about $267,000,
00:05:24.260 | and that's pretty small for my standards
00:05:27.780 | for what I think people should have in their 401(k)s
00:05:30.380 | if they continuously max them out at the age of 46,
00:05:33.460 | which I'm at right now.
00:05:35.240 | Now, $266,000 compared to the median
00:05:38.240 | for my generation of 44,000 for Gen X is quite high.
00:05:43.140 | But man, if I only had $266,000 right now
00:05:47.940 | and that's all I had for my retirement,
00:05:50.940 | I would probably be panicking right now.
00:05:53.240 | Well, what I would probably be doing
00:05:54.460 | would be working right now.
00:05:55.340 | I wouldn't be not working.
00:05:57.000 | I would get a job and try to beef that up.
00:06:00.260 | But because I also have the rollover IRA
00:06:02.840 | and I have a SEP IRA and I have a solo 401(k),
00:06:07.340 | combined, these tax advantage counts is over a million.
00:06:11.420 | So, Sydney, what type of tax-advantaged
00:06:14.660 | retirement accounts do you have,
00:06:16.700 | and how much are you counting on them
00:06:19.420 | for traditional retirement?
00:06:21.580 | - So, I actually don't have any 401(k)s anymore.
00:06:25.760 | I have a rollover IRA,
00:06:29.060 | I have a SEP IRA,
00:06:30.840 | and I have a Roth IRA.
00:06:32.880 | So, I have three different types of retirement accounts.
00:06:35.560 | And I am not counting on Social Security for my retirement,
00:06:39.800 | although I'm gonna treat it as a bonus if I do get it.
00:06:42.480 | Altogether, I don't have a million,
00:06:45.920 | but I'm pretty close to that.
00:06:47.640 | So, I'm also investing in my after-tax investment account
00:06:52.640 | as a supplement to my retirement accounts.
00:06:56.320 | - Right.
00:06:57.160 | For those who wanna achieve financial freedom
00:06:58.940 | sooner, fire, in other words,
00:07:01.680 | you really need to beef up your taxable portfolio,
00:07:05.340 | your after-tax investment accounts,
00:07:07.080 | your rental property portfolio,
00:07:08.520 | because these investments, these portfolios,
00:07:11.440 | are what's gonna spit out that tappable passive income
00:07:16.320 | that you can use to live your life until 59 1/2,
00:07:20.400 | when you can touch your 401(k) and IRA money penalty-free,
00:07:23.760 | and also until 62 1/2 plus
00:07:28.120 | when you are eligible to withdraw from Social Security.
00:07:32.800 | I think the maximum Social Security benefit amount
00:07:35.760 | an individual can take is over $4,000 now.
00:07:40.340 | So, if we keep on going the way we're going,
00:07:43.700 | we're gonna be able to get to the max,
00:07:45.140 | because the FICA tax limit is something like 122,600,
00:07:50.140 | where the FICA tax and Social Security and Medicaid tax,
00:07:54.320 | it taxes income up to that level.
00:07:56.480 | So, we've been able to make that for a long time now.
00:07:59.040 | So, in retrospect,
00:08:00.440 | if we do get Social Security payments in 15 years,
00:08:04.300 | it should be pretty good, because inflation adjusted,
00:08:07.620 | it's gonna be well over $4,000 a month.
00:08:10.720 | Do you think you can live off 4,000 plus a month?
00:08:13.080 | - I think so.
00:08:14.060 | I don't plan to change my lifestyle habits
00:08:16.920 | dramatically in any way.
00:08:18.080 | I think readers know that we are frugal
00:08:21.120 | in the way that we live our lifestyle.
00:08:23.160 | So, I think it's doable.
00:08:25.560 | - Yeah, oh, so let me clarify, folks.
00:08:29.280 | The 2023 FICA tax rates and limits,
00:08:33.320 | it's not 122,000 or whatever I said.
00:08:36.320 | It's actually 160,200 of your earnings
00:08:41.320 | are subject to the Social Security tax,
00:08:44.040 | and that's up from 147,000 in 2022.
00:08:48.480 | And then there's an additional 0.9% surtax
00:08:51.440 | on top of the standard 1.45% Medicare tax
00:08:55.760 | for those who earn over 200,000 for single filers,
00:08:59.600 | or 250,000 for joint filers.
00:09:03.040 | So, that is, whoa, that's a lot.
00:09:06.400 | It's interesting how I haven't been in the workforce
00:09:09.880 | for so long that I didn't realize,
00:09:11.840 | whoa, I guess inflation adjustment,
00:09:13.640 | the FICA tax has gone up that high.
00:09:15.360 | Did you realize that was 160,200 per person?
00:09:17.960 | - No, I wouldn't know exactly off the top of my head.
00:09:20.800 | 122 or 23 or whatever you said did sound a little bit low,
00:09:24.360 | but I didn't know it was as high as 162.
00:09:27.200 | - No, it's 160,200.
00:09:29.520 | - Oh, sorry, yeah, that's high.
00:09:32.120 | - That is high.
00:09:33.920 | And so, you know what?
00:09:35.360 | Every dollar you make above 160,200
00:09:38.040 | isn't subjected to the FICA tax,
00:09:41.320 | which specifically is 6.2% Social Security tax,
00:09:46.520 | aka OASDI, and then a 1.45% Medicare tax.
00:09:51.520 | Now, if you're self-employed,
00:09:56.400 | aha, you've gotta pay both sides.
00:09:58.800 | So, we're talking double 7.65%, and that is a lot.
00:10:03.800 | And this is one of the reasons why people
00:10:06.720 | who are self-employed often incorporate as an S-corp,
00:10:10.240 | where they pay themselves a lower salary,
00:10:12.800 | which faces the FICA tax,
00:10:14.600 | and then they pay the rest of their profits
00:10:16.360 | in terms of distributions, which don't pay the FICA tax.
00:10:20.680 | And this is a little bit complicated in the weeds,
00:10:24.120 | and I also have a post on this,
00:10:26.020 | but you don't wanna have your distributions
00:10:27.880 | really be much greater than 50% of your total compensation.
00:10:32.880 | And another reason why the median
00:10:35.300 | or the average 401(k) balance is so low
00:10:38.320 | is because I think life just gets in the way.
00:10:41.080 | Many readers have told me about their situations,
00:10:43.960 | and I'd like to share it with them.
00:10:45.960 | So, here's Joe.
00:10:46.840 | He's 42 years old, and he makes $120,000 a year
00:10:50.180 | as an engineer.
00:10:51.280 | He's been working for 19 years,
00:10:53.440 | and he has 80,000 in his 401(k), right?
00:10:57.480 | He said he never considered maxing out his 401(k)
00:11:00.200 | because he always thought he wouldn't have enough money left
00:11:02.720 | to take care of his wife and his son.
00:11:05.520 | His wife worked for the first eight years
00:11:07.320 | and decided to stay at home after giving birth.
00:11:10.160 | Going from a two-income family
00:11:11.560 | to a one-income family is difficult
00:11:13.200 | if you're not used to saving half.
00:11:16.560 | Case study number two, Sally's 32 years old
00:11:19.780 | and makes $75,000 a year plus bonus
00:11:22.420 | as a medical equipment sales rep.
00:11:24.520 | She got her master's degree in health
00:11:26.400 | and graduated with $27,000 in debt.
00:11:29.600 | So, she pays $500 a month in student loans now
00:11:32.760 | starting October 2023.
00:11:35.800 | After seven and a half years of working at a reputable firm,
00:11:38.640 | Sally's 401(k) retirement balance is $70,000
00:11:41.800 | compared to a recommended $127,000
00:11:44.000 | after eight years of work experience.
00:11:46.520 | And she basically said, look, education is expensive,
00:11:49.960 | and she had debt, and she lived in a high-cost living area,
00:11:53.840 | so she could only save what she could.
00:11:57.360 | Another case study, Susie, 34 years old,
00:12:00.040 | single, makes $150,000 plus bonus
00:12:03.400 | as an investment banker in San Francisco,
00:12:06.480 | and she decided to take a break.
00:12:08.520 | She was burned out and wanted to try something new,
00:12:11.620 | and she wanted to do bakery.
00:12:14.360 | So, she tried to be a baker for two years,
00:12:16.640 | and it only paid something like $18 an hour
00:12:20.360 | while she was standing in front of a hot stove
00:12:22.560 | and a hot oven for eight hours a day,
00:12:25.360 | and she said, screw that.
00:12:26.700 | But that two-year hiatus cost her a lot of contributions.
00:12:31.700 | And here's another case study by a highly educated couple.
00:12:36.280 | Many, quote, above-average people
00:12:38.200 | do not start working at age 22
00:12:40.600 | and incur substantial debt before they start working.
00:12:43.820 | For example, I am a lawyer that obtained a master's degree
00:12:46.780 | and then a law degree before starting my career at age 28.
00:12:50.600 | My wife is a doctor who completed her residency
00:12:53.180 | and started practicing at age 28 as well.
00:12:56.060 | Both of us started our careers
00:12:57.300 | with substantial student loan burdens,
00:12:59.260 | over $325,000 between us.
00:13:03.080 | Our late start means we lose a lot of magic
00:13:06.420 | of compounding interest,
00:13:07.780 | and our debt burden takes a big chunk
00:13:09.820 | of our monthly income.
00:13:11.440 | These are significant challenges.
00:13:13.980 | Here's another case study.
00:13:16.020 | What is misleading as to why many people's 401ks
00:13:18.860 | are half or less than what they should be is one word.
00:13:23.500 | Divorce.
00:13:24.780 | I am currently 44 years old.
00:13:26.820 | When I was 37 in 2008, I had $125,000 in my 401k,
00:13:31.100 | and then boom, stock market crashed,
00:13:33.700 | and my 401k was worth $80,000.
00:13:36.120 | Yeah, not fun.
00:13:37.860 | Seven years later, my portfolio recovered to $130,000,
00:13:41.100 | but then I had to go through a divorce.
00:13:43.460 | Now I'm back to $65,000.
00:13:45.540 | Ridiculous.
00:13:46.860 | Over 50% of marriage goes into divorce,
00:13:49.980 | and many men are paying child support and alimony,
00:13:52.420 | and aside from losing half our retirement,
00:13:54.360 | we now have nothing for years to invest, but I digress.
00:13:58.060 | Hmm, I'm sorry to hear about that.
00:13:59.940 | So you see, life does get in the way,
00:14:02.860 | whether you're changing jobs, getting a divorce,
00:14:05.820 | going through a bear market, paying off student loan debt,
00:14:09.500 | trying to help a loved one with their finances.
00:14:12.700 | Life gets in the way, which is why there's that old saying,
00:14:16.660 | pay yourself first before life gets in the way.
00:14:20.060 | So try to max out your 401k as much as possible.
00:14:23.740 | Do it until it hurts, because it's not
00:14:25.940 | going to hurt for that long, because you will adjust
00:14:28.100 | to your lower cash flow.
00:14:29.540 | Just think about it as, oh, like a tax cut.
00:14:32.700 | It's like a tax cut as well as a pay cut for your future self.
00:14:37.820 | So we've heard about the various median 401k balances
00:14:42.100 | by generation, and this really dovetails well
00:14:45.700 | with a previous study from Northwestern Mutual Online,
00:14:49.380 | which talked about, for all ages,
00:14:52.580 | the expected amount needed to retire comfortably.
00:14:55.260 | And that number was $1.3 million.
00:14:59.180 | And then the actual amount currently
00:15:01.740 | saved across all age brackets, which was $89,300.
00:15:06.740 | So there is a huge, huge 1.2 plus million gap
00:15:11.220 | in terms of the expected amount and the amount currently
00:15:14.060 | saved.
00:15:14.900 | And if we look at, let's say, the expected amount needed
00:15:19.180 | to retire comfortably for those in their 50s,
00:15:23.460 | that number was 1.6 million.
00:15:26.500 | That's a huge number.
00:15:27.980 | But the actual amount that people in their 50s saved
00:15:31.780 | was only about $111,000.
00:15:35.260 | And then if you look at the 60s, this is interesting.
00:15:37.620 | The expected amount drops from 1.6 million
00:15:40.780 | for people in their 50s to only $968,000
00:15:45.660 | once they're in their 60s.
00:15:47.100 | So something happens there where people transition
00:15:49.420 | from working in their 50s to retiring in their 60s,
00:15:52.500 | because most people retire in their 60s.
00:15:54.580 | And I think they realize, oh, actually, it
00:15:57.460 | doesn't cost as much to retire as I thought it did.
00:16:00.900 | It actually costs maybe $700,000 less.
00:16:05.140 | So that's a good thing, folks.
00:16:06.980 | But the bad thing is the actual amount people in their 60s
00:16:12.740 | saved was only $112,500.
00:16:16.580 | So still about an $850,000 gap.
00:16:22.180 | So once again, there seems to be a disconnect with how much
00:16:25.780 | we think we need to retire and live comfortably
00:16:28.900 | and how much we actually have.
00:16:31.260 | And I can explain the one thing that I realized
00:16:34.460 | after I retired in 2012.
00:16:36.680 | And that is, once I retired, I didn't
00:16:39.700 | realize I no longer needed to save for retirement.
00:16:43.620 | Because if I was truly retired and happy with the net worth
00:16:46.580 | and the investments that I had, I no longer had to save.
00:16:49.860 | So I was saving 50%, 60%, 70%, 75%, maybe 80%
00:16:54.940 | of my after-tax income over the last 10 years before I retired.
00:16:59.660 | So if you think about it that way,
00:17:01.080 | let's say I made $200,000 after-tax,
00:17:03.620 | just for ease of numbers.
00:17:05.940 | And I was saving 70% of that.
00:17:08.820 | That means, what was I living off?
00:17:10.940 | $60,000, right?
00:17:12.820 | So suddenly, if I retire, I can not
00:17:16.480 | have to save $140,000 anymore.
00:17:19.940 | And when I did leave in 2012, I had about $80,000
00:17:24.980 | in passive and semi-passive investment income.
00:17:28.380 | So suddenly, I didn't have to save 70% anymore.
00:17:32.180 | And I was living off $80,000, which after-tax, let's say,
00:17:37.260 | is about $60,000.
00:17:39.380 | Tax rate is not that high at $80,000.
00:17:41.980 | And then, boom, there you go.
00:17:43.380 | I realized I was able to maintain
00:17:44.980 | a similar standard of living, but I just
00:17:47.020 | didn't save more for retirement.
00:17:49.380 | Which actually felt really weird,
00:17:51.140 | because I had been saving so aggressively for so long.
00:17:54.540 | So that is an inside scoop that I felt firsthand.
00:17:58.540 | And hopefully, this gives people a little bit better calibration
00:18:01.820 | of how much they actually need.
00:18:03.220 | You probably don't need as much as you think.
00:18:05.820 | We talk a lot about the 4% rule, the rate of withdrawal,
00:18:09.580 | the safe rate of withdrawal.
00:18:11.500 | We talk about the financial samurai safe rate
00:18:14.180 | of withdrawal, which is 80% of the 10-year bond yield, which
00:18:18.860 | is the risk-free rate.
00:18:20.780 | We also talk about trying to get a net worth
00:18:22.660 | equal to 10 to 20 times your average gross income.
00:18:28.300 | I think using a multiple of gross income is more honest.
00:18:32.620 | It's more challenging.
00:18:33.620 | It's better, because you can't cheat your way
00:18:36.620 | to early retirement or financial independence
00:18:38.660 | by slashing your expenses to almost nothing.
00:18:42.100 | Sydney, I've been talking a lot.
00:18:43.620 | What are your thoughts about where we are, where you are?
00:18:47.740 | How do you feel about going into the later part of your years
00:18:51.460 | in your 50s and 60s?
00:18:53.620 | And how do you think about retirement in general?
00:18:56.020 | I don't feel like I'm retired.
00:18:58.460 | I don't have a traditional 9 to 5 job anymore.
00:19:02.580 | But I'm working independently.
00:19:06.860 | And I feel comfortable with the amount
00:19:08.820 | that I have saved if I combine all of my retirement accounts
00:19:12.980 | and my after-tax investment accounts.
00:19:15.620 | And also, just with the way we live our lives,
00:19:19.380 | I think we have a lot of frugal ways in our day-to-day living.
00:19:25.580 | And I feel comfortable with that.
00:19:28.140 | OK, so you don't feel like we're in trouble
00:19:31.740 | without having two jobs with retirement benefits
00:19:35.900 | and other benefits.
00:19:37.780 | I think we are saving and investing
00:19:40.660 | to supplement the lack of having those traditional retirement
00:19:45.020 | accounts now.
00:19:46.340 | OK, so it seems like we see these numbers,
00:19:50.220 | these very low numbers, every single year.
00:19:52.620 | Every single year, we'll have a survey, oh,
00:19:54.500 | the median 401(k) balance, so low.
00:19:57.420 | Median IRA balance, so low.
00:19:59.380 | The median amount people have saved overall, so low.
00:20:02.700 | But yet, life goes on.
00:20:06.020 | Life continues to go on in general pretty solidly,
00:20:10.460 | at least here in America.
00:20:12.500 | So it seems to me that we have enough safety nets,
00:20:16.140 | whether it's through the pension, social security,
00:20:18.820 | 401(k), IRA, SEP IRA, 403(b), and also side jobs and hustles,
00:20:25.540 | where things will probably be OK, hopefully, for most people.
00:20:30.260 | And also, there's this huge inheritance windfall
00:20:33.980 | that's coming.
00:20:34.700 | And it's supposedly tens of trillions of dollars
00:20:37.300 | as the boomer generation passes away and leaves it
00:20:39.700 | to the Gen X and the millennials.
00:20:42.420 | And given that the boomers have been investing and saving
00:20:44.820 | for the longest, during the biggest and longest bull
00:20:48.660 | market in history, there's a lot of wealth transfer to be had.
00:20:52.580 | Thoughts on that?
00:20:53.540 | Yeah, we've been hearing about that for many years
00:20:56.300 | now, about how much is out there that's
00:20:58.860 | going to be transferred down.
00:21:01.020 | And you and I know that we're not
00:21:02.740 | getting any secret inheritance from our own parents.
00:21:06.860 | But I think there are a lot of adults our age out there
00:21:11.020 | who will.
00:21:13.420 | And I think I'm seeing it all around here,
00:21:15.340 | at least here in San Francisco, where
00:21:17.300 | I see a lot of adult males continuously
00:21:20.460 | live at home with their parents in their 20s and 30s
00:21:23.780 | and maybe now 40s.
00:21:25.780 | And then their parents, let's say, pass away
00:21:28.380 | or they have another home.
00:21:29.420 | And they just end up living in their parents' homes.
00:21:32.340 | And so the easiest and most common wealth transfer,
00:21:34.820 | I think, is a home.
00:21:36.860 | And another, I think, good wealth transfer
00:21:39.100 | is using a 529 account.
00:21:42.060 | So instead of giving money, give the gift of education.
00:21:45.940 | And that's something we're focusing on,
00:21:48.020 | although community college is looking more and more
00:21:50.860 | appealing.
00:21:51.660 | But that's the topic of a new episode.
00:21:54.460 | All right, everyone.
00:21:55.460 | I hope you enjoyed this episode.
00:21:58.260 | If you did, please share, subscribe,
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00:22:01.860 | We always appreciate it.
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00:22:10.420 | If you still want to pick up a copy of our book,
00:22:12.380 | "By This, Not That," go to financialsamurai.com/bythisnotthat.
00:22:19.060 | And if you're looking for a way to get out
00:22:21.580 | of a job you dislike, definitely try to negotiate a severance
00:22:25.660 | instead of quit your job, because there's
00:22:28.700 | nothing to lose that way.
00:22:30.220 | Go to financialsamurai.com/hteyl for how
00:22:36.740 | to engineer your layoff.
00:22:38.740 | Take care, everyone.