Retirement Compatibility

Words are power, and each word has its own weight and energy. Words have inspired people to stand up for what they believe in or hang their head down in defeat. Therefore, choosing the right words to describe that which you want to manifest is very important.

For example, when speaking of aspirations for the future, there are those who use the words dreams and goals interchangeably. However, they ae distinctively different in definition and performance. A dream is boundless, fueled by your passion and imagination. However, it is akin to fantasy, with no immediate call to bring it to life. When someone tells me they dream of owning a sports car or starting their own business, I know most of the work to make that dream a reality hasn’t taken place and probably won’t for the foreseeable future.

A goal, on the other hand, is the mapwork to that dream, concrete and behavior-driven. When you have a goal, you have markers, measurements and steps to get to the destination. Setting the right goals, especially when it pertains to financial goals, can have a significant effect on how and when you achieve them. In fact, a guide to good goal-setting has long been to make it S.M.A.R.T.1:

Specific: if we are truly making a map towards our goals, telling ourselves to go in a general direction or for an undefined distance is most likely only going to get us lost. Steps towards our dreams have to be detailed and specific.

Measurable: When a goal is measurable, there is a way to track your progress to stay motivated or identify issues that may need problem-solving.

Attainable: It is admirable to be striving for something grand and lofty. However, it’s imperative that we have feasible goals that we can accomplish to keep us motivated and actually accomplish said goal.

Relevant: Having impressive goals are fine and dandy, but if they don’t move you closer to your overall goals or work against other goals you may have, it may be time to rethink them.

Time Bound: Once something has been stated as a goal, the stop watch has started. There is an expectation of completion, which is necessary to keep us moving forward towards that goal. It may not get completed in the expected timeframe, but just by having a deadline, we can stay accountable.

Based on this description of a S.M.A.R.T., you can see that there is a difference between, “I’m going to start saving money for a house,” and “I’m going to put 15% of my paycheck into a savings account specifically designated for my eventual down payment, and I should have enough saved after 3 years.” One expresses a desire while the other one lays out a concrete plan to achieve the goal.

If one seems to be fueling the other, how can a dream inhibit a goal? Well, one way is when your lifestyle fits with your dream rather than your goals. To achieve many financial goals like saving for retirement or buying a home, one needs to save and stick to a budget. However, if you fail to save and incrementally work towards the goals, it will take longer and longer to see results. Worse is if you choose to skip the incremental steps and live your dreamer’s lifestyle by using credit cards. The debt you accumulate will take you farther and farther from your goals and possible put you in an unfortunate and stressful predicament.

Sometimes when we haven’t developed a goal for a dream, it’s vagueness can work against an already established goal. Perhaps a good friend asks you to go into business with them. If you choose to pour funds into this new endeavor without any parameters, you may find yourself taking funds away from saving for retirement or depleting savings you already had. Of course, if you had outlined your goal on how to contribute to your friend’s business, with specific and timely parameters, the situation could be completely different.

Please understand that I’m not asking you to stop dreaming. In fact, quite the opposite. I happen wake up every day saying, “Dream Big! Work Hard! Laugh often!” I sign letters and thank you notes and end employee meetings with those very words. Dreaming is important.

So please know I want you to dream big and bold. At the same time, I want you to buckle down and create some S.M.A.R.T. goals to propel you closer to your dreams.

https://www.mindtools.com/pages/article/smart-goals.htm

The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual.

The pandemic’s economic disruption altered people’s views on a wide range of money topics—from the feeling of financial insecurity to the extra burden of debt, to how best to protect their loved ones, physically and financially. People’s interest in life insurance—knowing they have a need for it—was heightened during the pandemic and remains so, as people take a closer look at their financial security and well-being. The 2023 Insurance Barometer Study, by Life Happens and LIMRA, shows this trend is prevalent among the younger generations, as well as with single mothers.

Single Moms Need the Industry’s Help

Fewer women own life insurance than men, 49% vs. 55% respectively. And that number is even starker for single moms: Just 2 of 5 single mothers (40%) own life insurance. That said, 6 in 10 single moms (59%) know they have a life insurance need gap—meaning they need coverage or more of it (vs. 41% of all adults) equaling about 5 million households. And 4 in 10 (38%) say they intend to buy coverage this year. With 7.9 million single-mom households, according to the U.S. Census Bureau, there is a dire need for single moms to
purchase life insurance, or more of it.

The primary reason single moms own life insurance (63%) is the same as the general population: to cover burial costs. However, only 26% say they have it to replace lost income. And more than half (51%) say they are “extremely concerned” about leaving dependents in a difficult financial situation if they died prematurely, vs. 29% of the general population.

That’s not the only area of financial concern. In fact, single moms have increased levels of concern over a wide range of financial issues—often double-digits—over the general population.
• Having money for a comfortable retirement: 58% vs. 44%
• Saving for an emergency fund: 56% vs. 38%
• Paying monthly bills: 50% vs. 32%
• Ability to afford college: 40% vs. 22%

Owning life insurance makes people feel more financially secure: 69% of life insurance owners feel secure vs. 49% who don’t own. For single moms, this is 52% of owners feel secure vs. 30% who don’t own. The good news is that while only a third of single moms (35%) work with a financial advisor currently, more than half without one are looking for an advisor (52%) to help them navigate their finances.

Desire and Need Are on the Rise

Gen Z is growing up—they’re adults now who are in the weeds of financial responsibilities and stresses. Half of Gen Z is now 18-26 years old, which means 19 million young adults are ready for life insurance, most of whom are non-owners; and Millennials, at 27 to 42, are well into their careers and starting families. The study took a look at life insurance ownership among different age groups and found that half of all adults (52%) own life insurance, with 40% of Gen Z adults and 48% of Millennials currently owning it.

As Gen Z starts hitting life milestones such as finding a partner, buying a home and having children, half (49%) say
they either need to get life insurance or increase their coverage. And Millennials are not far behind, with 47% saying so. And they are ready to take action: 44% of Gen Z adults and 50% of Millennials say they intend to buy life insurance this year.

They also want to purchase it where they have become comfortable—online—and that goes for all generations. In 2011, 64% of people said they preferred to buy life insurance in person; by 2020, just 41% felt this way. In 2023, it dropped to 29%.

Education Is Key for Gen Z

There is work to do on educating people about ownership: 42% of all adults say they’re only somewhat or not at all knowledgeable about life insurance.
A quarter of Gen Z and Millennials say that not knowing how much or what kind of life insurance to buy stops them from getting coverage. And 37% of Gen Z and 27% of Millennials say
they “haven’t gotten around to it.”

Across generations, cost is cited as the top reason for not getting life insurance. But only a quarter (24%) of people correctly estimated the true cost of a policy for a healthy 30- year-old, which is around $200 a year.* More than half of Gen Z adults (55%) and 38% of Millennials thought it would be $1,000 or more.

With the current climate adding financial uncertainties to Gen Z and Millennials, including layoffs and inflation, it is imperative that the two age groups learn how to protect their loved ones financially. Education around finances in general, inclusive of life insurance, will be extremely beneficial, particularly for Millennials, who cite the highest overall level of financial concern (39%).