Gen-Xers: 5 Things you should be doing today
Most of the talk around retirement planning in recent years has focused on the needs of the Baby Boomer generation, a group of people who are now hitting their 70s. Largely drowned out beneath all the clamor are the 80 million or so individuals following in their wake—Generation X.
Gen-Xers, in fact, are closing in on their 50s, which means that they, too, should be planning for retirement income. The problem: Many are still recovering from the “Great Recession” of 2007. According to a report by the Insured Retirement Institute (IRI), Gen-Xers are in their prime working years, yet their incomes have declined since the recession hit.
This, in turn, has put a dent in their savings.
Among the IRI’s key findings:
- Fewer than two-thirds (65 percent) of Gen-Xers have money saved for retirement.
- Of those that do have retirement savings, 42 percent have saved less than $50,000.
- More than 40 percent of Gen-Xers fear they won’t have enough money in retirement to live comfortably.
The IRI report did unearth some good news:
- The median amount saved by those Gen-Xers who have planned for their retirement with the help of a financial representative is more than $90,000, or twice that of those who have not sought such help.
- Nearly twice as many Gen-Xers who work with a financial planner have retirement savings of $200,000 or more.
- Gen-Xers who are not yet saving as much as they could still have time on their side. Because most in this generation are still about two decades away from their full retirement age under Social Security, they have “ample time to adjust their retirement plans, develop sufficient savings, and attain a financially secure retirement,” according to the report.
Considering that, what can you, Gen-Xer, do right now to prepare for your future? Simple:
Work with a pro. It’s important to develop a relationship with a financial professional who understands the ins and outs of financial planning for retirement.
Take stock. Of your personal financial situation, that is. Even if that recession did smash your wallet, you can build a budget that includes a retirement savings plan.
Mind inflation. As you think about your retirement income needs, keep in mind how inflation will impact your buying power. Inflation reduces your purchasing power, which directly impacts your budgeting.
Contribute now for later. When possible, make sure that you’re contributing to your employer sponsored retirement plan and taking advantage of matching (if offered). If a plan is not available, consider opening another retirement savings plan, such as an IRA, or even potentially a deferred income annuity.
Talk to your spouse. If you’re married, talk with your partner about your retirement lifestyle dreams. You really should be on the same page as you plan for retirement —whether you’re both Gen-Xers or not.
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2021-120962 Exp. 6/23