Most Baby Boomers have been retired for years now, while Gen Xers are just approaching their retirement era. And according to a finance expert who helps people with retirement planning, Gen X is taking an altogether different approach in determining how they want to spend their golden years.
Benjamin Brandt is a Certified Financial Planner who has spent nearly two decades helping people plan for retirement. On his YouTube channel, Even Better Retirement, he says that one big difference between the generations is that Boomers have retired “forward,” while Gen X is retiring “backward.”
What it means that Boomers have retired ‘forward’
Brandt shares the pattern he’s seeing when he talks to Boomers and Gen Xers about retirement.
“When a Baby Boomer sits across from me over Zoom, and I ask them, ‘What are you retiring to?’ You know, ‘Why did you save up all this money? What are your retirement plans?’ I hear a very specific kind of answer,” Brandt explains. “The answers are something along the lines of, ‘I can’t wait to retire so I can finally spend some real time in my garden. I can’t wait to retire because I want to golf three days a week. I want to retire so I can build cabinets in my garage.’”
Brandt points out that these are all things the person hasn’t done yet. Boomers are wanting to spend their retirement doing things they always wished they could do.
“They retire forward towards the activity that they never got to do and will finally have time for,” Brandt says. They’re basically guessing at what they’re going to enjoy.
“That can present a problem,” Brandt points out. “Retiring forward is a bet. It’s a guess. You’re guessing that the thing that you daydreamed about at your desk will still feel good on a random Tuesday morning in retirement when you’ve just got nothing on the calendar. Now, sometimes that guess is right, but sometimes I get that phone call that says, ‘You know, Ben, I’m kind of sick of golf. Is that really all there is to do in retirement?’”
The Gen X response: Retire backward instead
While Boomers look forward, making guesses about how they’ll want to spend their retirement, Gen X is looking backward. They’re using actionable data about what they enjoyed in the past and planning to return to those things when they retire.
“Gen X is retiring back to the thing they used to love when they were younger,” Brandt shares. “I have a client that’s getting the band back together. And I don’t mean that as a figure of speech. I mean an actual band with instruments and amplifiers and a van and a setlist and all those sort of things. In fact, that exact retirement goal has come up more than once or twice in my office. I have another client who’s getting back into skateboarding in retirement. I have another one that’s dusting off his Magic the Gathering cards and hosting tournaments.”
Brandt believes we’re going to see a resurgence of 80s and 90s games and hobbies as Gen X returns to the things they know they’ve enjoyed. He says Gen X’s backward approach is a better way to design a retirement because it’s based on evidence, not a guess.
Why Gen X and Boomers are making different retirement choices
What caused Boomers to have the forward orientation while Gen X looks backward? Brandt says it has to do with the examples each generation has had.
Boomers essentially didn’t have an example of retirement the way it looks today. The Silent Generation nearly all had strong pensions, which barely exist today. They had certainty in their monthly income, but no certainty in how long they might be able to enjoy it.
“Retirement for many members of the Silent Generation was to retire, then take a cruise, and then die,” says Brandt. “So, the money was more predictable, but the timeline was anything but predictable.”
Boomers were the first generation to have what Brandt calls a “full spectrum retirement.”
“Many of them had pensions and portfolios and a retirement that could last maybe 20 or 30 years,” he says. “In some cases, in fact, some people have now spent more time in retirement than they spent in total in the workforce. But nobody handed them a playbook because there just wasn’t a playbook that existed.”
While Boomers have winged it, Gen X has been watching. And seeing how many of their elders have had mixed results with the forward-guessing approach, they’re going the other way. Additionally, Gen Xers don’t have pensions, but rather 401K retirement plans that may or may not be enough. They have less margin of error financially, so they’re being more intentional.
“Generation X is the first generation with a full case study sitting right there in front of them,” Brandt says. “So they are being much more deliberate because they went second, and they are learning in real time from the successes and failures from the previous generation.”
The $500 question Brandt asks his clients
In his video (as well as his book, “Retirement Starts Today”), Brandt shares a mental exercise he does with his clients called “$500 in a time machine”:
“I hand you $500, and we hop into the Delorean, and we set the dial back to your 13th birthday,” Brandt says. “Now, you’ve got to spend the money on yourself, and you’ve got to spend it by the end of the day. Those are the only real rules.”
At 13, you understand the value of a dollar, you’ve developed enough judgment to thoughtfully weigh options, but you’re still young enough to have a vivid imagination.
“Thirty years in corporate America hasn’t crushed your soul yet,” Brandt says.
What do you buy with that $500? Especially if no one is telling you how to spend it and you can be as foolish as you want?
“Maybe it’s a mountain bike,” says Brandt. “Maybe it’s a drum kit. Maybe it’s a dungeonmaster guide and some 12-sided dice. Recently, I heard about National Geographic magazines. This retiree loved learning about places that she’d never been, and then that became a desire to explore the planet in retirement.”
For Gen X, it’s about tapping into your youthful interests
Thinking about what you would spend a chunk of money on at 13 can help people figure out what they might like to spend their money and time on in retirement. If you still love that thing, you can start making small investments toward it. If you don’t really like it anymore, you just cross it off the list.
“Both of those are wins, and both of those are real, accurate, actionable information,” Brandt says. The key is tapping into interests and hobbies that grabbed you in your youth. If they still resonate, your retired self might just want to bring them back.
You can follow Brandt at Even Better Retirement on YouTube and find his book here.
