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Is Gen X ready for retirement? Steps you can take now
Were you born between 1965 and 1980? If so, you are one of America’s 65 million Gen Xers, in your 40s or 50s, staring down the road to retirement.
Sandwiched between Baby Boomers and Millennials, Gen Xers are dealing with unique financial and emotional pressures as they are supporting aging parents and dependent children while trying to secure their own financial futures.
Are they ready for retirement? Let’s see.
The sandwich generation
Gen Xers often provide financial and caregiving assistance to their parents while simultaneously supporting adult or nearly adult children. Pew Research reports that nearly half of Gen Xers are navigating this dual role, managing medical appointments and financial matters for elderly parents while helping their kids with college tuition, job searches or even basic living expenses.
This juggling act takes a big bite out of money and time. Many Gen Xers devote more than 24 hours per week to caregiving, according to the National Alliance for Caregiving.
The burnout from balancing so many roles creates a financial strain that further delays retirement savings.
A late start on savings
Gen Xers are behind the eight ball when it comes to retirement savings. Many faced student loan debt and stagnant wages early in their careers. Now, caregiving responsibilities are pushing retirement concerns aside in favor of more immediate demands.
Investopedia reports Gen X is on track to become the first generation worse off in terms of retirement preparedness than their parents. Only 25% are pinning their hopes on Social Security, according to a Transamerica survey.
And yet, a sizable number have less than $50,000 saved for retirement. Others have significant debt. Adding to their sleepless nights is the worry of increased healthcare costs in retirement. Fidelity estimates that a couple retiring today will need approximately $300,000 for healthcare expenses, a figure few Gen Xers are prepared to meet.
Gen Xers can take these steps now
- Leverage Catch-Up Contributions: Those over 50 can accelerate their savings by making additional contributions to 401(k)s and IRAs.
- Utilize Health Savings Accounts (HSAs): These tax-advantaged accounts can cover medical expenses in retirement, helping offset future costs.
- Set Financial Boundaries: Define the limits of financial support to children and parents, ensuring your resources for retirement goals.
- Seek Professional Advice: For busy Gen Xers, financial advisors can help with numerous strategies to balance current responsibilities and future savings.
Over the next two decades, around $84 trillion of wealth will be transferred from Baby Boomers to younger generations including their Gen X children. And they’re going to need every penny. For expert advice, attend “Gen X Retirement: Dream or Reality” on Feb. 20 in Altamonte Springs. RSVP online at OneSeniorPlace.com or call 407-949-6733.
Brenda Lyle is a certified care manager and certified dementia practitioner with One Senior Place, Greater Orlando. One Senior Place is a marketplace for resources and provider of information, advice, care and on-site services for seniors and their families. Submit your questions to AskOSP@OneSeniorPlace.com. For immediate help, call 321-751-6771 or visit One Senior Place, The Experts in Aging.
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As Generation X, born between 1965 and 1980, approaches retirement age, many are wondering if they are financially prepared for this next chapter of their lives. With retirement looming, it’s important to take proactive steps now to ensure a comfortable and secure future. Here are some key steps you can take as a member of Generation X to prepare for retirement:
1. Assess your current financial situation: Take stock of your assets, savings, investments, and debts to get a clear picture of where you stand financially. Consider working with a financial planner to help you create a retirement plan tailored to your specific goals and needs.
2. Increase your retirement savings: If you haven’t already, start contributing to a retirement account such as a 401(k) or IRA. Consider increasing your contributions to take advantage of employer matching contributions and maximize your savings potential.
3. Pay down debt: Reduce high-interest debt such as credit card balances and loans to free up more money for retirement savings. Aim to pay off debt before you retire to lower your expenses and increase your financial security.
4. Plan for healthcare costs: Healthcare expenses can be a significant cost in retirement. Consider purchasing long-term care insurance or setting aside savings specifically for healthcare costs to protect your assets in retirement.
5. Reevaluate your investment strategy: As you approach retirement, consider adjusting your investment portfolio to reduce risk and protect your savings. Diversifying your investments can help mitigate market fluctuations and ensure a more stable retirement income.
6. Consider downsizing: If you own a home, downsizing to a smaller or more affordable property can free up equity for retirement savings and reduce ongoing expenses such as mortgage payments, property taxes, and maintenance costs.
7. Create a retirement budget: Estimate your future expenses in retirement and create a budget to help you plan for your financial needs. Consider factors such as housing, healthcare, travel, and leisure activities to ensure you have enough savings to support your lifestyle in retirement.
By taking these proactive steps now, Generation X can better prepare for retirement and ensure a secure and comfortable future. It’s never too late to start planning for retirement, so don’t delay in taking action to secure your financial future.
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