People talk about the recession's effect on the Baby Boomers, but they fail to realize that Gen X and Gen Y are in much more serious financial turmoil. Household income in this age group took a big hit, and now most people don't have even $100k saved for retirement.
See, retirement won't be the same for our generation. Our parents had the government and their employers' defined benefit plans to fund their golden years. The employer did the math and the employee was on cruise control. It's different for Gen X and Y because in the age of the 401k you are the one driving. You need some investment skill in order to allocate your money intelligently to the fund options on the 401k menu. Gen X needs to step up to the plate, yet not enough Xers have sat down and figured out how much money they will need to retire. They are now the ones in the driver's seat…and it's going to be a rocky road ahead given that social security is on its last feeble breath and who knows what will happen with Medicare, Medicaid, Food Stamps, and every other government funded benefit that our broke country can't afford anymore.
So heads up, women, because here's some advice on the real, from one to another.
Considering that it is a rarity for people to stay married anymore, more women than ever before are now assuming the role of CFFO, or Chief Family Financial Officer. Yet the numbers imply that, disappointingly, many of us women expect someone else to make decisions about money for us. Unbelievable. Despite all the feminism, we are still depending on our employers to educate us about retirement. Many of us can not explicitly quantify how much money we have saved for retirement, or haven't even put together a formal plan. How shaken up would you be if you found out that the CFO of your company hadn't forecasted and planned out next year's budget? Now imagine how your kids feel about you not doing your job as CFFO.
Women, we are growing more powerful and we need to step up to the plate when it comes to money.
This is a clarion call to the women of Gen X and Gen Y: pay more attention to saving and investing your money because more of us are outearning men, becoming as educated as men, and finally, likely to be without a man (divorced, separated, or never married) than our mothers, aunts, and grandmothers.
You can't eat that $3k retail value Prada bag when you're 80 years old. And those Manolo's won't pay your medical bills either. So you should be obsessing over which mutual fund to pick in a 401(k) plan instead of over whether to buy the Hermes or Ralph Lauren Ricky Bag in Red Crocodile. Because the way things are going, it is the women of this world - not their husbands, the government, or their employers - who are going to be running the modern family.