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

Financial Planning Transitions for Different Generations: Touchstones,

Tasks, & Teaching Strategies

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Connecting military family service providers and Cooperative Extension professionals to research

and to each other through engaging online learning opportunities

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MFLN Intro

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Today’s Presenters

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

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

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

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

Increase knowledge about generational personal finance practices

Increase knowledge about generational personal finance action steps

Increase knowledge about generational financial education resources

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Today, we’ll …

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What do you hope to learn today?

Share in the chat pod.

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

― Napoleon

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It has been said already, but bears

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

attempt to do that either.

―Charlie Caruso, author, Understanding Y

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

Wikimedia Commons Wikimedia Commons

A generation is …

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Pere/ Flickr CC2.0

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Who are the generations? Traditionalist ~ before 1946

Baby Boomer ~ 1946 – 1964

Gen X ~ 1965 – 1980

Millennial ~ 1981 – 1995

Gen Z ~ 1996+

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

Licensed by UMN Extension

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Births by Generation

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25oryounger

26-30years

31-35years

36-40years

41&older

AgeofTotalMilitaryForce(N=2,120,505)

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

Generations in our Military

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25oryounger

26-3031-35

36-40

41&older

AgeofTotalMilitaryForce(N=2,120,505)

Millennials & Gen X

Gen X

Millennials

Gen Z & Millennials

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

Generations in our Military

Gen X, Boomers, & Traditionalists

13

0

100,000

200,000

300,000

400,000

500,000

600,000

Ac=veDutyMembers

Ac=veDutyEnlisted

Ac=veDutyOfficer SelectedReserveMembers

SelectedReserveEnlisted

SelectedReserveOfficers

AgeofAc=veDuty&Selec=veReserve-Enlisted&Officers

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

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

Traditionalists

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

Active Duty & Selective Service

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

Enlisted Officers Enlisted Officers Enlisted Officers Enlisted Officers

Army Navy MarineCorps AirForce

NumberofAc=veDutyEnlistedMembersandOfficersbyServiceBranchandAge

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

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

Traditionalists

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

Active Duty by Service Branch

15

0

20,000

40,000

60,000

80,000

100,000

120,000

140,000

160,000

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

ArmyNa=onalGuard

ArmyReserve NavyReserve MarineCorpsReserve

AirForceReserve CoastGuardReserve

NumberofSelectedReserveEnlistedMembersandOfficersbyReserveComponentandAge

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

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

Traditionalists

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

Selective Reserve by Component

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0

20,000

40,000

60,000

80,000

100,000

120,000

140,000

160,000

180,000

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

AgeofMilitarySpouses-Ac=veDuty&SelectedReserve

AgeofMilitarySpouses-Ac=veDuty&SelectedReserveAc=veDuty

AgeofMilitarySpouses-Ac=veDuty&SelectedReserveSelectedReserve

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

Spouses: Active Duty & Selective Service

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U.S.Genera6onsbythe#s

Now-2050

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Poll: Which generation are you?

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

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

Image via Photospin

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•  Can-do attitude matched with Will-do accountability

•  Most financially secure in recent years

•  Value obedience & duty over individualism & pleasure

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

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

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Baby Boomers

• Suburbia • Vietnam • Civil Rights • Kennedy Assassination

• TV • Beatles & Elvis

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Randstad Canada/CC BY 2.0

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Randstad Canada/CC BY 2.0

Strengths of Boomers • Size of their cohort – political leverage

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

• Notoriously good networkers

• Drive to learn and improve, become self-actualized

• Own considerable proportion of nation’s wealth

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

• Disco, Rap, Michael Jackson, & MTV

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

Licensed by UMN Extension

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• Survivor mentality • Adaptable • DIY / Start from scratch

(means no rules) • Pragmatic

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

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

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

Bombing, & Columbine High School Shootings

• TV Talk shows and Reality TV

•  Internet, email, cell phones

Licensed by UMN Extension

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Strengths of Millennials • Size of their cohort

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

• Civically engaged • Tech-able • Positive expectations -

hope • Carefully weigh options

before making decisions*

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

difference • Open to adaptation • Achievement oriented

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Gen Z Digitals a.k.a iGen, Centennials

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• Technology revolution • Considerable diversity •  Instant results; constant

feedback • Skill gaps • Global mindset - local reality

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

entrepreneurial sprit • Skilled web researchers • Diversity breeds

awareness

• Most diverse “rainbow” generation

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

• Flexibility

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• Funding Entitlements vs. Program Sustainability

• Time and Effort – To understand – To build relationships

• Innovation vs. Institutional Knowledge • Racial shifts

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Potential Challenges or Tensions

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

ü Encourage frequent and meaningful contact across all generations

ü Follow reports based on data.

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Thoughts?

Questions?

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

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

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

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Generational Personal Finance

Practices

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

Talkin’ ‘Bout My Generation

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The Influence of Early Environments

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

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

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NEFE Generation Definition

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Generational Touchstones

Source: National Endowment for Financial Education

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Life Cycle Tasks That All Generations Pass Through

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

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The Financial Life Cycle

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

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Generations Defined

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

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

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Generational Differences Activity

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

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

personal finance?

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Generational Personal Finance

Practices

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Poverty Levels by Generation

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Spending Behavior

Source: Bank of America/Merrill Lynch

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

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

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

Millennial Spending vs. Others

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Payment Behavior

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

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Comfortably Cashless

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

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Credit Cards By Age

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

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Credit Card Debt by Age

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

Credit Scores By Age

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

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

Auto Insurance Premiums by Age

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

Health Insurance Premiums by Age

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Health Care Barriers by Generation

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Income Tax Filing by Generation

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

Question #2: Comments so far?

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Saving and Investing Behavior

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

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Cash Asset Allocation

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

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Savings Goals

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

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Generational Saving Perceptions

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

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Multi-Generational Housing Arrangements

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

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Young Adults Living with Parents

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

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Question #3: Thoughts? Comments?

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Generational Personal Finance

Action Steps

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Generational Overview

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

General Financial Action Steps

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

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

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

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

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

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

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

Millennials (Gen Y)

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

•  Consider hiring a financial adviser

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

• Manage increased need for credit and insurance

• Understand that retirement savings generally trumps college savings

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

Generation X

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

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

before retirement • Start taking advantage of “senior discounts”

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Baby Boomers

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

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

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

retirement

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

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

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

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

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Mature/Silent/Traditionalists

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

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

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

insurance and retirement savings plans

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Don’t Forget Generation Z!

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

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

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

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Gen Z Take-Aways

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

X •  Realistic thanks to skeptical Gen X parents,

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

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

the-8-differences-you-.html 78

The Military Lifecycle

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

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Question #4: Other action steps by

generation?

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Generational Personal Finance

Resources

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Journal of Financial Planning Blog Post

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

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A Classic: Journal of Family and Consumer Sciences Article

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

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Military Saves: Financial Strategies by Generation

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

Life Cycle of Financial Planning

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

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Financial Tips for Generations

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

Teaching Different Generations

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

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NEFE® White Paper

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

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Question #5: Other good

generational personal finance resources?

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

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

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

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

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

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Personal Finance Upcoming Event

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

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

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