managing money in retirement

Our attitudes toward the important things in life – relationships, money, and careers – are shaped by the experiences we have in our youth. The Millennial generation – our kids, in other words – are demonstrating this in their attitudes toward saving, investing, and real estate.

Check out this interesting article in The Motley Fool on the financial habits of Boomers versus those of their children. It gives us a whole new take on the term “sandwich generation.”

Millennials Treat Money Like Their Grandparents Did

The Millennials are more like their grandparents than they are like us in their thinking about where to put their savings and how to invest. Apparently, we’re more trusting and invest a larger percentage of our savings in the stock market.

Millennials, like their grandparents, like to keep their savings in cash, and are far less trusting than we Boomers are. The author of the Motley Fool article, Amanda Alix, surmises that perhaps there’s similarity in the experiences of our parents, who lived through the Great Depression, and our children, who entered the adult world during a serious recession.

I think their “financial thinking alliance” with their grandparents also might have to do with the high rate of divorce among the baby boomer generation. We talk a lot about the emotional devastation our children suffered when their parents divorced, but what about the financial consequences, too?

How many of our children have seen households torn asunder, possessions split between two households, lessons terminated, clothing allowances constricted and style of living in general taken down a peg – or two – when their parents divorced?

That’s got to make them think about how attached one should be to material possessions; how important it should be to keep up with the Joneses; how risky it would be to try to build a financial castle that may turn out to be just a house of cards.

The interesting counterpoint is that our children have a high degree of trust in our advice when it comes to financial matters. Go figure.

A Time in Life to Teach Financial Management by Example

As we now go forward in life into older age brackets, retirement and perhaps more limited financial means than when we were younger, we have an opportunity to teach our Millennials by example again – only this time in a more positive light and with more planning and control over the outcome.

If we face our financial futures squarely, employ good planning skills and demonstrate admirably reasonable behavior, we can show Millennials some really good things, like what it looks like to marshal your financial resources, adopt a realistic outlook and make healthy and happy decisions.

One major decision that we all face as we age is where and how we will live. And unlike our Depression-era parents, we seem to be looking at our choices in a whole new, more open-minded way.

Happily, we do seem to be living out the ideals we held high when we were entering adulthood: that living in community is good for each of us individually and good for the environment, that sharing and supporting one another is the best way to be, and that friendships and the simple pleasures of life are worth their weight in gold. What an example to hold up to our kids.

Have you started seriously planning for retirement – such as making a detailed post-retirement budget? Are you discussing your finances with your adult children, letting them in on the plans you’re making or considering? Are you considering a shared housing or communal living arrangement for your future? Share how you are teaching by example in the comments section below.