COVER STORY
als owned their own home, mainly because of high home costs, according to online real estate brokerage Redfin.
Yet many advisory clients are so attached to the idea of homeownership, if only to keep up with the Joneses, that the peer pressure blinds them to the realities— that homes require annual maintenance, insurance and property taxes and even an up-front budget for moving expenses, Moore notes. Buying a house, she continues, is as much a lifestyle choice as a financial one. Once clients come to terms with that reality, she says, then they should be willing to buy whether or not interest rates are high, and then determine, with the help of their advisor, if they can afford it.
“ We look at it from a comprehensive perspective and then on an ongoing basis,” says Moore.“ How much is this going to change your lifestyle and how will it affect you achieving your long-term goals?”
Shaffer adds:“ Many feel pressure to buy [ a house quickly, but ] we compare renting with buying, while factoring in flexibility and opportunity cost. In some cases,
definitely have retirement on their minds. These high-earning clients typically make the maximum contributions to their pretax 401( k) to reduce their taxable income. However, since all their money is pretax, it means their required minimum distributions will later be“ very, very large,” he explains.
While many workers absolutely should be contributing to their 401( k) or other employer-sponsored plans, especially if they’ re going to get employer matches, they should aim to diversify their accounts for taxability and accessibility, Buzzerd says.
For example, instead of taking 10 % of earnings and contributing all of it to their pretax retirement plan, they might instead put in 5 % and direct the other half to a taxable brokerage account.“ This will provide them with flexibility to access the account if they have a cash need,” he says. Younger clients in particular might need to access funds for, say, a home purchase or for starting a family. He advises clients to build up both their Roth contribution bucket and the taxable brokerage account.
Americans under 44 are an increasingly powerful financial force, and the young folks seeking out financial advisors aren’ t the sad stereotypes living in their parents’ basements.
it makes sense to wait and save for a stronger down payment, or to consider a starter home in an up-and-coming neighborhood rather than stretching too early.”
Shaffer encourages clients to keep total housing costs, including mortgage, property taxes, insurance, and maintenance, below 25 % to 30 % of their gross income.
Next-Gen Is The Retiring Type
He offers a similar dip-your-toe-in-the-water-first approach to saving for retirement.“ Starting small and starting early is critical,” says Shaffer, adding that even modest contributions to a 401( k) or Roth IRA can grow meaningfully over time.
“ Saving for retirement does not mean neglecting other goals,” he says.“ We focus on balancing short-term flexibility with long-term growth, so clients feel encouraged rather than restricted. Much like exercise, starting can be the hardest part, but once the habit is in place momentum builds and results follow.”
Grant Street’ s Buzzerd says the physicians he works with
Next-Gen Just Wants To Talk
McKinnon and other advisors note that while nextgen clients might be quite tech savvy, they are also eager to turn to an advisor for financial advice.“ All of my Modearn clients don’ t even use their app or log into their technology,” she says.“ They just want to call us or text.”
Shaffer’ s closing financial and career advice to his nextgen clients is also simple: On the way to a well-deserved life of financial well-being, they shouldn’ t forget to stop and smell the roses.
“ Prioritize travel before family responsibilities make it harder to pick up and go,” he tells them.“ Early in my career, I delayed travel until a mentor encouraged me to take my first international trip. The experience was transformative and taught me the importance of building travel into a financial plan through pre-saving, rather than waiting for leftover money.
To paraphrase the line of a song from another tumultuous time in the country’ s history: The kids, indeed, are alright!
34 | FINANCIAL ADVISOR MAGAZINE | NOVEMBER 2025 WWW. FA-MAG. COM