272. What to Do If You’re 35+ and Feel Financially Behind with Jean Chatzky

26:30Financial Feminist Host:Again, everybody, these are fantastic tools. We haven't spent enough time talking about them. We just haven't had the bandwidth. But I think the thing about saving receipts is so great. Now, you could be the person that saves the$2 Walgreens or Duane Reade, like I bought a band-aid, a pack of band-aids you could be that person but i think we're talking more about like i got my wisdom teeth removed and it was a lot out of pocket like we're talking about the things that actually feel probably more significant but you can go the like again i bought something for five dollars um i believe and i'd have to fact check myself on this i believe hsa's i know fsa's but period and menstrual products are also covered do you know this gene if hsa covers them i think that they are now covered.

27:14But there's a site online called HSA store. There's also one called FSA store and they carry all the products that are covered. So you can double check yourself. Okay.

27:29Financial Feminist Host:So my follow-up question with HSA is before we move on is HSAs are usually given to you because you have a very high deductible health plan, right? Your deductible is a couple thousand plus dollars. I remember I had the only reason I have an HSA is that was my health insurance when I first went out on my own to run HFK full time as I'm like, I'm relatively young and healthy, and I don't know how much income I'm going to be bringing in. So I'm going to choose this high deductible health plan. So how do you determine whether the HSA benefits outweigh a potentially really high deductible? If you've got some kind of a chronic health condition, and predictable health expenses that you know that you're going to have, it's generally not going to be the right thing for you.

28:17It's for healthier people. We used to say it's for younger, healthier people, but in fact, health span has increased so much that you've got people in their 40s, 50s, early 60s who are quite healthy, who rarely go to the doctor and would be just fine with an HSA. But But if you know that over the course of a year, you are the kind of person who gets tests and sees doctors regularly and has things pop up, this is just not the account for you. Yeah.

28:56Financial Feminist Host:So the thing I hear over and over and over again from women in their 40s, in their 50s, but honestly, every generation is, I feel so behind and it's too late for me. um i remember on my book tour this was a couple years ago this came up in every city i think there was a q a at the end and somebody would stand up and it was usually somebody who was like 20s 30s and they would go i feel so behind what do i do and i would ask the room i was like hey a vulnerability moment if you feel like you're behind will you raise your hand and i'm not kidding every single person in that room didn't matter if they were 19 didn't matter if they were 75 five, they raise their hand.

29:41Financial Feminist Host:So I feel like this is generally a feeling that every single person has about money is that we feel like we're not doing enough. But I think uniquely with people, especially women in their forties and fifties, it feels like it's too late to start. So why would I debunk that for me? Well, first of all, as we already talked about, I started late, right? And And there are a lot of rules of thumb, and I'm sure you like some of them and you don't like others of them. I like some of them and I don't like others of them. But one I do like is that if you can get yourself to the point where you're saving 15 % on a pretty consistent basis, you're investing that money over a period of decades, you will generally have enough at retirement.

30:33And you can benchmark your way there. Years ago, Fidelity Investments released this series of benchmarks that a lot of people find absurd and daunting. I've published them on my socials at times, and I get a lot of hate for these. But in fact, if you save 15 % kind of regularly, you get there. So the benchmarks are that by age 30, you want to have about one times your current income put away for retirement at 43 times, at 56 times, at 68 times. And by the time you retire, you want to have 10 times your current income put away for retirement. And if you look at those numbers and you think, oh my God, never going to get there, then And you have to get over the 15 % mark if you want to be able to achieve those benchmarks.

31:27And those benchmarks are basically that you can replace your pre-retirement income, 85 % of it, for a 30-year retirement. So if you get to the end of the road and those benchmarks are not coming up pretty fast, then you know that you need to adjust your savings rate. Our savings rate is something that is really in our control. Like if we look at all the stuff, can't control the markets, can't control interest rates, can't control inflation, can control how much we save and how much we spend, at least to some degree. If you're living paycheck to paycheck to paycheck, it's harder.

32:10Financial Feminist Host:And I think one of the things I tell people as well is it's like, do I wish you started when you were 20? Yeah, I do. There was probably a lot of reasons you didn't. Life was expensive. You didn't know how to navigate money. You had children to take care of. You had family members to take care of. There's a lot of reasons you probably didn't start sooner. So do I wish you had started at 20? Yeah. Is it too late for you? Absolutely not. And you might not have millions and millions of dollars. That's probably not the reality for the most people listening. But you might have 200K or you might have enough where the market can support you and growing your money.

32:48Financial Feminist Host:And again, it's not just a 65. You're hoping to have those market returns after that too. So I just hate the all or nothing mindset. And I think women especially get caught up in that. We have to do it perfectly or not at all. We just talked about that when I was on your show. It's like the perfectionism mindset or the like, I'm either going to do it 100 % correctly or I'm not going to do it at all is so nihilistic. And it's also just, it's not helpful. Do we wish you had more money? Yeah, but that's not the reality. So you have to do what you can. And I promise$100 ,000 is better than$0. It is.

33:25And one of my favorite, and I really like data, so I'm sorry if I'm throwing too much of it at you. But one of my very favorite statistics is that if you can get yourself to work just an extra three to six months at the end of your career, it's like adding 1 % to your savings, your retirement savings for 30 years. And the math works because your income at that point in your life is at a higher point. So, you know, you can't get a full do-over, but you can make up a lot of ground with little things. And there are other levers that you are going to want to pull. If you are feeling like you don't have enough savings of your own, it makes it even more important to delay claiming Social Security, right?

34:22You want to get to that point where you are just maxing out those benefits. That's something that I think most people want to do anyway. But if you're feeling, and particularly for women because of our longer lifespans, you just want to make sure you're going to get as much as you possibly can. And if you've got a spouse and you're in the workforce, you're going to want to make sure that you're not only maxing out your benefits, but that you're focusing on survivor benefits because you're going to outlive him. So focus on those survivor benefits when you decide when to claim. Yeah.

34:59Financial Feminist Host:The last thing I'll say as well is that if you have not taken a look at a retirement calculator because you're too afraid to look, it is potentially daunting. Yes, just like this fidelity study, right? It has the potential of making you go, oh, shit, I'm so far behind. But it is information that you can use. One of my favorite things that I would do, especially in my early 20s, is I would sit at work when I was like, I hate my job. I hate my life. Do I have to do this for the next 30 years? And I would go on retirement calculators and I would say, okay, if I just contributed$50 more a month or even$20 more a month, how does that change how long I have to work?

35:35Financial Feminist Host:And you would be shocked how many months, if not years, it shaves off by just you saying, okay, I'm going to contribute 1 % more to my 401k, or I'm going to attribute$50 more a month to my Roth IRA. It's crazy. So if you haven't done that, especially if you're like 40s or even 50s, start taking a look at that because that's another small thing that you can do to immediately save yourself some time. Yeah. And the other thing to look at is what do you expect life in retirement environment to look like. If you haven't thought about that and get really concrete, like, where is it going to be? When is it going to be?

36:14Who are you going to be with? What are you going to do? Are you going to work? Are you going to work for pay? Are you going to work not for pay? How much is it going to cost? I mean, you're driving to an estimate of how much it's going to cost because lacking that information, you never know what your number really is. Yeah.

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37:52Financial Feminist Host:On December 12th, Disney Plus invites you to go behind the scenes with Taylor Swift in an exclusive six-episode docuseries. I wanted to give something to the fans that they didn't expect. The only thing left is to close the book. The end of an era. And don't miss Taylor Swift, The Era's Tour, the final show, featuring for the first time the Tortured Poets Department. Streaming December 12th, only on Disney+.

38:25Financial Feminist Host:Okay, I have some questions from our audience. and these are going to be a little more rapid fiery. Are you ready? I'm ready. Okay, cool. For 20-somethings listening, someone asked, what can I do now in my 20s, late 20s, to prepare for my 30s and 40s? You can make sure that you are getting to the point where you are maxing out on retirement. A lot of people in their late 20s are still struggling with high rents where they're living with paying down college debt, which is unfortunately going to drag on longer than we hoped, you want to get to the point where you are maxing out because then you're going to hit that 15 % that we talked about and it's going to be smooth sailing from there.

39:14How do I know when I'm investing too much? It's so funny that this is one of the questions because I had this discussion with my son and daughter-in-law. So I have two kids and two stepkids. My husband's son and his wife both were maxing out their 401ks, additionally making contributions into IRAs. And I looked at their numbers and it was just, they were saving to such a degree that I wondered if they were having enough fun. I think that's, look, I love saving. I'm a big believer in saving. But I also think life can be really short and unpredictable. And we work in order to enjoy ourselves. And if you feel as if you're meeting your goals, your savings goals for emergencies for retirement, and then you're going above and beyond and you're not having enough fun, that's out of whack.

40:27It's not sustainable. Yeah. And you, yeah, and you should, you should allow yourself, I mean, thoughtfully to think about what do you want your money to actually do for you? What, why, why do you work, right? What are you doing this for? Because it's not just to see a growing balance in an account. That's that I mean, I guess that's fun for fun. It's fun, but it's a particular kind of fun. But it's not, it's not the kind, you know, it's not being in the Canadian Alps fun. It's not, you know, being on a paddleboard fun. It's not riding a horse fun or whatever fly fishing fun. It's not that it's, it's, it's, I don't know, lately, I have a thing.

41:12I really want to try fly fishing. I don't know why, but, um, but you, you got to figure out what lights you up and make some space for that.

41:21Financial Feminist Host:When I did one-on-one coaching with people way back at the beginning of her first hundred K, I remember meeting one of my clients and she was like, this was at the beginning. So we sat down and we went through, you know, where, where are you saving? What are you saving? And she was like, I'm saving 90 % of my income and I don't feel like it's enough. And I literally, I was like, girl, I had to tell her to spend money. I was like, you don't think like this is enough? I was, yeah, it's, but I think that is, this is the classic thing where money is emotional. It's like, so we had to unpack, like, why are you doing that?

41:51Financial Feminist Host:And it turns out, you know, hadn't grown up with a lot of money, felt a lot of scarcity around it, was worried the other shoe was going to drop, was like, okay, I'm going to save all of my money. And again, not sustainable. Yeah. Yeah. And if you feel like really there's nothing that you want, give some away because that feels really good. Yeah, it does. Okay. Quote, I'm getting divorced and losing money from my 401k. Am I screwed? It feels like you're screwed. I know that it feels like you're screwed because you've read all of these horror stories that say, don't take the house, take the retirement.

42:24And that is really good advice, right? Because the retirement continues to grow. The house is a liability in many cases. You're not screwed. you just have to course correct and figure out where you are in terms of your retirement trajectory and what you need to do to get yourself back on track. But chances are there was a decent enough balance in that 401k for your soon to be X to fight you for it. So figure out where you are, where you want to go and just start step by stepping your way there.

42:59Financial Feminist Host:Is a career change worth it if I have to go back to school for two years, but I'll make more ultimately? And maybe we can talk about if they don't have to take on debt to do that versus if they have to take on debt to go back to school. Before you go back to school, I would look at what are the other ways to get this knowledge without going back to school? You know, is this a field like finance in some cases where you got to have an MBA. I think it's not as true as it used to be, but there used to be a hurdle where you needed that MBA in order to get promoted, in order to climb the corporate ladder.

43:42When I was a reporter fresh out of school, I wanted to go to a business magazine because in my first job, I got the opportunity to report about business. and I liked it. I thought it was fun. I wanted to pursue it. I had a colleague who had come out of the fact-checking pool at Forbes and she just said it was the best job ever. So I wanted to be a fact-checker at Forbes. So I went in and I interviewed to be a fact-checker at Forbes and the chief of reporters there very quickly figured out that I knew nothing about business and told me that I needed to go get an MBA. And I didn't want to go back to school.

44:20It would have been a lot of debt, but also I just, I wasn't in the mood. So I went and worked on Wall Street for two years and figured out that he didn't really need me to have an MBA. He needed me to know how to read a balance sheet. And I could get that knowledge and get paid for getting that knowledge. So maybe there's a workaround. So I would try to find that first. If you do have to go back to school, I would look at whether you can work and go back to school at the same time. And then if you have to take on debt, I would be very, very careful that you know that that career path with the step up in income is going to be there when you get out.

45:13Financial Feminist Host:My final quick fire question for you, What accounts can I open for my kids? You can open a variety of accounts for your kids. You can open UGMA accounts for your kids and UTMA accounts for your kids. These are uniform gift to minors accounts or uniform trust to minors accounts. These are brokerage accounts where the money is invested for them. Sometimes there's a tax reason for using these kind of accounts. You can open 529 accounts in order to save for their college educations. But I actually think the most important account to open for them is a linked checking or savings account to yours. Because that's the only way that they're ever going to learn about money.

46:01When my kids were teenagers, I opened linked accounts. I got them debit cards. We started giving allowance electronically. Ironically, if they wanted cash, they had to sit down with me and watch me transfer the money out of their account and into my account so that I would be the ATM and give them the cash until they could drive and then they could go get their own cash. But they knew how to handle these tools before they went off to college. And that turned out to be really important.

46:29Financial Feminist Host:So you've reinvented yourself many times throughout your career. what would you say to a woman in midlife who's trying to start over and just feeling financially paralyzed have i have i actually reinvented myself i don't know have you i don't really feel that way honestly i kind of feel like i've been doing the same thing i mean i think career i mean in a variety of places right yeah i mean yeah i started a business but it was sort of it's all sort of been personal finance-y, I guess. But you went through a lot of transition when you were 40, though. I did. I did. And I think that that is the identities we carry, right?

47:11Financial Feminist Host:I think your career identity probably hasn't shifted, but your divorce, the death of a parent, that's a lot to take on, especially in one year. So that's, I think, let's talk about that as like reinvention yeah okay okay so to a woman who is financially paralyzed don't quit what you're doing until you know where you want to go right i think we can shift while we're in motion. And having that consistent income is what you need to present to prevent like a greater degree of paralysis that could potentially undo you. So if you have a job, but you're still feeling a little bit stuck, keep the job and then use your free time to explore and figure out the other things you want to do.

48:18And only once you sort of know where you want to jump to, where's the next lily pad, right? Then allow yourself to jump, but don't cut everything else off and then try to transition because it's very, very possible to just get mired in a place where your resources are depleted and you feel like you made a mistake. Move slowly, is I think what I'm trying to say.

48:47Financial Feminist Host:Well, and I think don't get bangs and get divorced on the same day, right? Like don't completely overhaul your life until, you know, because there's one place that's already chaos. So you don't want to add more chaos until you know that it's 100 % the thing you want. I think that's great advice. The Today Show made me grow out my bangs for years. I had bangs when I started there and the talent director said, we can't see your eyes. You got to grow the bangs out. And I never said this to her, but when I turned 50, I was like, fuck you, I'm getting my bangs back. And I went and I got my bangs and I just went to work the next day and never said another word about it.

49:24Financial Feminist Host:That makes me so happy. Jean, I think I've told you this both on and offline, but I don't think I would have a job if you didn't exist. And so So I grew up watching you. My parents are always like, oh, what does Jean say? So thank you for your work. Thank you for everything that you've done, both in this space and outside. I'm going to try to not get more teary than I already am. But thank you for your work. Thank you for your contribution. Where can people find out more about you? Thank you for carrying it forward. I mean, Siri, no, it's... You make me cry. I'm going to cry. But it's, it's, I am friends with all the other women in our space.

50:05Yeah, me too. And, and, and you are as well. And this is because we know that there's, there's room for a lot of voices. We need a lot of voices. And, and it's really so, so thank you. You can find me at hermoney.com and the Her Money podcast where soon you'll see Tori once again. And if you are interested in investing, I teach investing every other Monday night on Zoom with Karen Feinerman. She's a CNBC person, professional investor. We're picking stocks. So this is a supplement to your 401k and your indexed portfolio and your ETFs. But if you're curious to learn about how companies work, it's really fun.

50:49I love it.

50:50Financial Feminist Host:Thank you. Thank you for listening to Financial Feminist, produced by Her First 100K. If you love this show and want to keep supporting feminist media, please subscribe or follow us on your preferred podcasting platform or on YouTube. Your support helps us continue to bring this content to you for free. If you're looking for resources, tools, and education, including all of the resources mentioned in this episode, head to herfirst100k.com slash sfpod. If you love Financial Feminist and you're listening, so I hope you do, we've got something to take your learning even deeper from the podcast, especially if you've ever felt like personal finance is a confusing maze.

51:24Financial Feminist Host:My book, Financial Feminist, Overcome the Patriarchy's Bullshit to Master Your Money and Build a Life You Love, is out now. It is a New York Times bestseller that has sold nearly 300 ,000 copies, and it is not just another financial guide. It's everything you need to get better with money step by step, but through the signature feminist lens that you know and love here at Her First 100K. There is so much in the book that we've never discussed on the podcast. There are homework assignments, there are deep dive lessons, and there's even more information that you've never heard of here on the show.

51:50Financial Feminist Host:You can get your copy of Financial Feminist wherever you get your books. And if you are listening on Spotify right now and are a premium member, you can get the audiobook read by me for free. You can get signed copies and learn where it's sold at herfirst100k.com slash ffpod.