Ep 04: We asked 400+ people about their money. Here’s what we learned.

Episode Transcript

Intro/Closing: 0:03

Welcome to the Real Talk Retirement Show, where we explore the financial side of retirement and beyond. Whether you’re currently retired or planning for the future, we offer real, relatable conversations about money and personal finances. Most importantly, we dive into all these topics using Real Talk. Now, let’s get real about your money and your retirement. Now, let’s get real about your money and your retirement.

Brian Graff: 0:28

Well, hello everybody and welcome back to another episode of the Real Talk Retirement Show. We are Brian Graff and Tracy Burke Happy to be with you again today. And you know everybody, there’s a lot of curiosity when it comes to money. You know, a lot of people think I wonder what others are doing with their money, right, I mean, I think that’s pretty common and a natural thing for us all to wonder from time to time what’s everybody else doing? And you know, tracy, wouldn’t it kind of be nice to sit down with an ultra wealthy person and, you know, ask them how they got where they are now, like, what did they do? What were the keys to their success? Or, on the flip side, maybe even have a cup of coffee with someone who’s made some mistakes along the way but came out okay on the other side, to see what they did to make appropriate adjustments. Isn’t that kind of something we’re all interested in exploring?

Tracy Burke: 1:16

Yeah, absolutely Brian, and we talk about keeping up with the Joneses at points right, you want to sort of benchmark how you’re doing with others, and so it is good to do that, and most of the time I would say it’s good to do it right, because we can then think about or learn what to do and maybe what not to do, and we can also always get new ideas and new ways to look at it. But the other thing we just have to be really careful about is, of course, everybody’s situation is different, right, the Joneses that live next door to me. They’re a completely different situation than I am, so you don’t want to go too far down that path. But again, like you said, it’s good to look at whether it’s the trends, but ultimately focus on what’s best in your situation.

Brian Graff: 2:00

Yeah for sure, tracy. We at Conrad Siegel, we’re just kind of curious about overall how people are feeling about their financial wellness and their different financial habits, how that all might impact their eventual retirement savings. So we’re definitely curious. So what we decided to do was last year and I’ll timestamp that with 2024, in case somebody’s listening to this 10 years into the future. But in 2024, we ran a survey and heard from over 400 respondents of all ages. Some people had just a little bit of money saved for retirement. Other people had quite a good chunk saved. But across the board and we did find some interesting trends which we can really learn from. And that’s going to be kind of the theme of today’s conversation. We’re going to talk about all those key points. So, tracy, if you wouldn’t mind, do you want to kick us off and talk about our first key point today?

Tracy Burke: 2:49

Yeah, Super excited about today’s episode in particular, because when we take these surveys or you hear all these surveys I always sort of draw to them and try to get a sense well, what’s everybody else thinking about right from that one everybody else thinking about right from that one. So the first area that we looked at is really around stress or anxiety around your finances, and, of course, many of you are probably thinking, yeah, many of us go through a lot of stress or anxiety when we think about our own finances. So that was one of the items that this study looked at and the results are, you know. It found that 45% of the respondents said that their finances caused anxiety and, as Brian, you just said, you know, these are people with a lot of money, people with less money, people that are further along in life and in retirement, people that are still working, but almost half of the people are stressed, which probably isn’t a good thing from that perspective. But even you know, taking a step further and maybe a little bit more concerning 26% said that the financial stress impacted their focus and productivity of what they’re trying to do Now.

Tracy Burke: 4:07

A couple episodes ago, we talked about how emotions impact money and investing and, of course, stress is that big emotion that really we’re often hearing about and thinking through. So, you know, can look at a lot of different ways from this standpoint. Right, Some people might be thinking, well, my goodness, how am I going to afford rent or my mortgage this month, you know? And others might be thinking, can I retire when I want to, or am I going to be able to retire? And then folks, you know, maybe that have more considerable wealth. Well, there’s other stresses how am I going to leave a legacy, or how do I take care of my spouse or family, or whatever it might be, when I’m gone? So, again, it’s really sort of that balance sometimes between what now and later and how we’re preserving investments and how that retirement income is to be generated. But, again, stress is a factor that a lot of people are going to and the survey showed almost half of the respondents that financial stress is making an impact in their life.

Brian Graff: 5:17

Yeah, that’s a pretty big number and whether, like you just said, stress can mean something different for everybody, I’m certainly not immune to it. I don’t know about you, tracy, but we both have multiple kids and you know, even when you feel really good about your career and your job, money is always going to be an issue. From time to time it’s unavoidable, but it’s a big number and you know, when we think about stress it all ties into again the term financial wellness. I know it’s a jargony term, but it’s super popular in our industry over the last 10 years or so. When you think about financial wellness, it’s just kind of our way of saying how well are you living today versus also being prepared for the future? How are you balancing that? How are you juggling that? How are you feeling about your overall financial state?

Brian Graff: 6:01

So when we asked people in this survey you know how financially well that they felt on a scale of one to 10, the average score we got was a 6.6. Now, I know these scales are relative and, tracy’s, a six might not sound bad to you, right? Hey, that’s above average, but to me, you know, if I rated my wife’s meatloaf a 6.6, I don’t think she’d be too happy about it. It’s not a number that gives you the warm and fuzzies, right, right. So I think, regardless those first two numbers, you know the 45% of people feeling anxiety around their finances only about 6.6 out of 10 feeling financially well. You know, people are stressed and the best, we’re average. We feel average. So what can we do about that to get those numbers, your financial wellness score, closer to like an eight or a nine or even, one day, a 10? What are some things we can do?

Tracy Burke: 6:55

Yeah, sure, and some of these assumptions that we had there. We looked at the respondents that weren’t stressed about money and felt financially well, Of course, if that’s the goal of not being stressed, we thought let’s break this apart and figure out what are the folks that are saying they’re not stressed, what are they doing? And this is sort of the items that this study came out with. So it’s really four things. The first one is that they had an emergency savings, you know, a backup plan. Generally, we advise that folks should have three to six months of living expenses build up in their emergency expense. You know, emergency reserves, emergency savings, that rainy day fund. For some people in some professions maybe it should be more than six months of expenses, but that three to six month range and that just provides that sort of peace of mind or that feeling of, hey, I have a cushion there in case something happens, in case that emergency happens, right. So that’s the first one. The second one is that they have an actual written budget, something that they can go off of. I would guess and this was not a survey question here, but I would think that most people do not have a written budget in many aspects of life. Sometimes, as you get close to retirement, more people do it just to get a sense of what their true expenses are. But having that documented, a written budget, is something, that roadmap, a spending roadmap.

Tracy Burke: 8:33

The third area, really in a similar area, a documented financial plan, something that’s written down as well. And here’s the plan we’re doing, whether that’s with my investment portfolio, whether that’s my 401k or other investments I might have. It could also be in terms of insurance. What is my plan for risk management? The types of insurances that I need could be, you know, or certainly cash flow, all those different components, but having some type of a financial plan in place that you can follow those people with you know that that did not indicate that they had much financial stress, had those. And in the fourth, one, more of the folks in this category also work with a financial planner. Now, a financial planner is probably going to help you with items one, two and three right there, right, Especially the second and the third area. The third area, in particular, that financial plan. But that’s some of the results there that we saw in this study, Brian, for folks that claim they don’t really have much stress on their finances.

Brian Graff: 9:39

Sure, and I know they sound. Some of them might sound a little bit obvious, tracy, but they’re important to keep in mind and they can be difficult too. So, like the emergency fund is a good example, a lot of people that are living paycheck to paycheck. They do the math on that. I think three to six months, I mean, that’s a that’s a lot of money to set aside. But what we would say is you know, start, just get started.

Brian Graff: 9:57

Even if you have to put in a hundred dollars in your emergency fund this month and maybe work your way up to 500 or a thousand dollars, boy, won’t that come in handy, you know, if you have to get new tires on your car rather than going to that credit card. So take baby steps with all this stuff. Maybe you start with a very basic budget, just kind of a quick spreadsheet of what you have coming in in total, what you have going out, and then work on a more detailed budget, you know, as you find some time in your busy lives. But get started with those things. You’ll benefit from it for sure. And you know the bottom line is that what the research told us by looking at those survey results is that people that really truly felt good about their money and their financial situation. Like you said, tracy, they were doing a lot of those things. Yeah, yeah, what do you want to talk about next, tracy? Is there anything else you want to say to that point?

Tracy Burke: 10:44

Yeah, and I mean so far we’ve talked about financial stress and then leading towards, you know, the wellness and sort of well-rounded in terms of overall financial planning. But we are, brian, after all, a show about retirement, right? So let’s talk about the actual retirement readiness aspect of it. So how did folks feel that they are ready for their own retirement? Now, keep in mind again that this study had some folks in it that were already retired and some that had not yet retired.

Tracy Burke: 11:16

But the great news with this study, it sounds like people are saving a good chunk of their money, because right around half of the people we talked to were actually saving 11% or more of their income into future savings, early retirement savings and the best guidance that you always hear is 10% to 15%. That’s what we often say save 10% to 15%. If you do that of your working career income, saving 10% to 15% of that income into retirement, you’re probably on good track. Now, that’s assuming you’re starting earlier in your career and not waiting to age 55 to start it. Of course, so there’s different dynamics there.

Tracy Burke: 12:01

But, again, good news that half of the respondents were saving in that range. So that’s good, and you also might think that, well, a lot of people are catching up as they get older, right, as you get closer. Some people feel I’m a little bit behind, so maybe now I’m earning more in the later stages of my career and that allows them to do it. But so we dug a little bit deeper on that very, very concept and we found that in all age groups there were similarly high savings rates in terms of those working year folks. So that’s great as well, and also a shout out to young people, because that’s where it counts. If you can save when you’re younger, that’s only going to help you as you get further along.

Brian Graff: 12:53

Yeah, and if you skipped episode number three I believe it was was in the podcast where we talked about the miracle of compound interest, you younger savers, go back and listen to episode number three, because there’s some pretty important numbers that we put out there for you. Absolutely, just show how little bit can really turn into a lot. So, yeah, thanks, tracy. Where it got really interesting, though even though people are saving well, which we just talked about doesn’t necessarily mean that they’re overly confident about being able to reach their retirement goals. Because that’s what we asked, and we asked people how confident are you that you’ll be able to retire comfortably? And, surprisingly, 20% of the respondents said they weren’t confident at all. So one in five just said nope, probably not going to happen. I’m going to work till I die.

Brian Graff: 13:35

You know, I hear that, I heard that phrase or that expression all the time and 48% were only somewhat confident, meaning they just weren’t totally sure. So you take those numbers together over two thirds of the people didn’t feel really good about their ability to retire. So I think the kind of the key word here again is uncertainty, and we talked about this in episode number one, but one of the most common questions we get then is how do I know if I have enough saved for retirement? Not being able to kind of get that in your brain, I think, is what leads to the stress and the anxiety of just not feeling sure. So, tracy, maybe if we can just go through a quick summary of some of those recommendations from episode number one, that would be great.

Tracy Burke: 14:18

Yeah, and again you have folks getting people comfortable and confident in their own retirement readiness and so forth. So, yeah, I’ll start with some of the folks that are pre-retiree area. So these are some areas we’ve talked in previous episodes about. But again, figure out what your retirement number is If you’re still working. Figure out where you need to be right and that’s that roadmap, sort of roadmap to your financial future and where you need to be. And we actually have in our show notes we’re going to link it again, but that was a document that we put out there. It’s, I think, called a retirement roadmap or something similar to that where you can go through and you can map out how to get to that number, what your retirement number is.

Tracy Burke: 15:06

The second thing is super important as well, brian. It’s figuring out what do you want your retirement to look like, and we talked about that, I think, earlier in this episode. It’s not all about keeping up with the Joneses, right, everybody is different, and what my retirement might want to I want it to look like might look different than yours or somebody else’s, and that’s fine. But having that thought through and knowing what you want that to be is super important. So, yeah, brian. I would say those are some of the key takeaways for pre-retirees. No-transcript.

Brian Graff: 15:43

Yeah well, we talked just a few minutes ago about the importance of having that financial plan, that financial blueprint. So don’t just create that at age 55 or 60 and just you’re done. You want to revisit that financial plan every year for the main reason of confirming you won’t run out of money. That’s all of our goals to have enough money to live a comfortable retirement. So you know, map all that out. There’s a lot of good benchmarks out there and percentages and maybe withdrawal rates and things you can look at, but one of the ones we recommend again, going back to episode number one of the Real Talk Retirement Show, we talk about kind of having like a 5% guardrail when it comes to your withdrawal rates. So it’s definitely important to have some numbers, work on a plan, revisit that plan and, just again, make sure you won’t run out, because if you feel like you’re heading in that direction, what adjustments are you going to have to make then in your life to ensure that you stay on track? We don’t want anybody running out of money. Tracy, right, that’s our-.

Tracy Burke: 16:37

I would agree with that.

Brian Graff: 16:39

Right, and then to go along with that. You know. Also, stop at some point once you’re in retirement and say to yourself am I living my ideal retirement in a financial sense, right, and in an emotional sense too? Is this what I thought it was going to be? And, like we said, it’s never too late to make adjustments, pivot, contact an advisor, talk to somebody, go over what your own goals are and find a way to make that happen. Okay, so always reevaluate where you are with things again financially, which is our focus, and of course, emotionally as well. So that’s just a little bit of information or some guidelines for pre-retirees and folks already in retirement. I think we can move on. And this is a really interesting area to me, tracy, I think when we talk about the different genders, right. So can we talk a little bit about the difference between?

Tracy Burke: 17:25

men and women when we did the survey? Yeah, when we did the survey. Yeah, and let’s stay in financially speaking terms of difference between men and women, because I know sometimes you’ll say some stuff that might get you in trouble at home, brian, so we’ll try to keep this inside the lines.

Brian Graff: 17:36

Good idea. Yep, that sounds like a good plan.

Tracy Burke: 17:40

So the good news is, in this survey, when we were looking at the gender differences there, it certainly appears that, at least within respondents, that women are just as likely to have positive financial habits as their male counterpoints. Some of those areas that we looked at before from a budgeting standpoint, from an emergency savings from retirement readiness that was really great to see that there’s you know, both seem to have. There’s no lag in one area or the other. Everybody’s sort of in conjunction with that.

Brian Graff: 18:14

Yeah, not surprising to me at all, tracy, because, as we always say, women are generally smarter than men making better decisions. Agreed, yeah, we’re not surprised at all to hear that, but listen, if you don’t want to hear about this from two guys. Our colleague, catherine Azles, has started a community for women specifically to talk about money, and she calls this community in this newsletter. She has purse-spectives, right, so a little play on words there. Think about a purse as a handbag, so purse-spective. I think that’s really, really clever, and we’re going to put a link to that in our show notes as well. So if you’d like to subscribe to Catherine’s newsletter and join that community, please do so, and I don’t think she’d frown on any of us men joining as well too. Just to you know, get some tips from the smarter gender, as we say. So definitely check that out and subscribe.

Tracy Burke: 18:59

Yeah for sure. No, that’s fantastic. So the one difference or the gap that we found and this, you know, could be humorous depending on how you look at it a little bit but is in confidence. So you know, overall women were less confident and sometimes, I think you know us men tend to be overconfident in a lot of things. My own wife tells me that quite frequently, so you know that just that’s a sort of how I think some folks are wired. But in this study it did sort of reflect that women were generally less confident than men in their retirement readiness and really overall ability to manage finances. So I know that’s something that here at Conrad Siegel we’ve been having some initiatives about and trying to increase confidence for everybody, but especially in that women community. And, like you said, you know Catherine is doing some great work at our firm in that area.

Tracy Burke: 19:55

But you know, a couple other things that we’ve been trying to put some emphasis on is, you know, one is education, and we think that that is really a key part of it. You know, when anybody feels informed you’re more confident. That’s pretty clear. So just trying to put yourself in situations where you can learn more about it is certainly good.Tracy Burke: 20:19

The second area is that community and this really goes along with that perspectives group that Catherine leads. It’s just finding part of the community and being around people that you trust that you might be taking, you know, financial advice and and all those things from uh, yes, it’s simple to google or now chat, gpt or whatever you want to do to find information that’s out there or to ask questions or to do some of your own research. But of course, there’s a lot of area of opinions that can be out there and finding somebody that you can trust on that area is so important. So just being around people that you you know, that you trust and talk about these type of things, that can certainly be a you know, certainly go a long way, brian.

Brian Graff: 21:09

For sure, Tracy. Yeah, and, like you said, those things are great Google searches, chat, GPT but there is nothing like that trusted friend or family member having that cup of coffee and talking a little bit about finances to the extent you feel comfortable with that person. You just can’t overemphasize how important the human element is for all this stuff. So it’s great to have somebody on your side. So I hope everybody enjoyed today’s episode. I think it’s some really interesting numbers out there. And remember, it’s great to look at trends and what other people are doing, For no other reason, just to be able to say you know what? Ah, you know what. I’m not alone. I was worried about all these things, but so is everybody else too. But again, keep in mind we’ve said it a couple of times everyone is different and just because somebody is in one certain situation, you know, it doesn’t mean you’re going to be negatively affected by that situation as well.

Tracy Burke: 22:00

Yeah, and Brian, I would say, you know, if we can share, as we always do, some action items, there’s really, when we really tore apart this study, there was four items that came up, and these are four items that we’ve already talked about a little bit today, but just in the recap here uh, people that felt better about their financial future generally had an emergency savings, you know, in place.

Tracy Burke: 22:24

We talked about that three to six months, had some type of a budget in mind, preferably a, a written one, but at least some type of a framework in terms of how they’re spending their money. The third area is having a financial plan. To a large extent it does not have to be a full-blown financial plan, but you know, at least thinking of all those key areas under your financial hood, so to speak, and having a plan in place. And then the fourth one, as we shared earlier, is working with a trusted financial planner, somebody that’s a professional in those areas. I would assume that most people do have a medical professional, a medical doctor, that they’re going to, and maybe that’s once a year, hopefully for checkups, or obviously some folks that you know from a health standpoint might need to have specialists are going a little bit more often, but from your finances. It’s also good to work with that professional and be working with financial planner.

Brian Graff: 23:21

Yeah, great, great advice. And remember we’re here to help with all this too. That’s what Tracy and I do, and our great team at Conrad Siegel, so please always feel free to reach out to us with questions or comments. You can get a hold of us at podcast at conradsegelcom. We are here to help. And please again, everybody, if you’re enjoying our content we really hope you are Please share the podcast with your friends, with your family, and, if you really liked it, please subscribe and give us a five-star review and we’ll keep this little project going, because I know Tracy and I are both having a great time doing it.

Tracy Burke: 23:55

Yeah.

Brian Graff: 23:56

All right. Well, thanks everybody. Until next time. Good luck with your finances, and we’re here to help. Have a good one.Intro/Closing: 24:04

Thank you for tuning into today’s show. Thank you for tuning into today’s show. The Real Talk Retirement Show is created and produced by Conrad Siegel, an advisory firm that specializes in helping people prepare for retirement and beyond. If you want to learn more about our work or meet the team, you can visit conradsegelcom. Information on this show is for educational purposes only and should not be considered personalized investment, tax or legal advice. Before making decisions, you should consult with the appropriate professionals for advice that is specific to your situation.