Generation X Succesful Retirement Tips
For those who are part of the Generation X, reality is really hitting them hard right now when it comes to planning for retirement. The reason for this is because a lot of the people who are members of Gen X — basically people who were born between 1965 and 1978 — they are confronted by challenges that baby boomers (generation before them) and the millennials (Generation after them) do not.
The Transamerica Center for Retirement Studies did a recent survey, and it found that Americans belonging to Gen X have a greater chance compared to millennials and baby boomers to indicate they might never, or have not yet started to recover from the Great Recession.
Money manager Personal Capital also had a separate survey that said more than a third of Gen Xers — 34 percent — have zero retirement savings. Considering that the youngest members of Gen X are turning 40 with the oldest in their early 50s, there is actually still time to catch up. But according to Catherine Collinson, president and CEO of the Transamerica Institute and Transamerica Center for Retirement Studies, they have to act now.
According to Collinson, Gen Xers still have a some time to build plans, save more funds and get financial security in retirement, but it should be noted that they’re not getting any younger. So the faster they can get started and refocused, the better off that they can be when the time comes to retire..
Having a Stable Plan
For many of the Gen Xers, this starts with establishing where they currently are, financially. Personal Capital’s aforementioned survey said that while a lot Gen Xers believe that having a plan for your finances is most important when it comes to securing your retirement, not many of them actually know their net worth..
If you don’t know where you are, it’s very hard to get where you are going, said Michelle Brownstein, vice president of private client services at Personal Capital. Get started by first establishing your net worth and then figuring out your budget, Brownstein said.
If you fall short, consider adjusting how you spend. That could include dining in more regularly instead of eating out or taking road trips instead of more lavish vacations, Brownstein suggested. There’s a lot of shifts someone can make that make a difference in the long term, Brownstein said.
Also consider cutting your memberships, said Matthew Gaffey, senior wealth manager at Corbett Road Wealth Management, such as to the gym and other clubs, as well as subscriptions to magazines or premium cable channels. Making those spending cuts can help you increase your emergency fund, which should cover at least six months of expenses. If you haven’t established that yet, that’s always priority No. 1, Gaffey said.
Think About Your Retirement Goals
Once you have a handle on your household budget, then it’s time to assess your retirement plans. Brownstein suggests coming up with the sum you will need in retirement and planning from there. If I need $1 million to fund my retirement and lifestyle at that point, how much do I need to save every year to get there? Brownstein said.
If you’re behind in your retirement savings or just getting started, be prepared to make some adjustments. There can be some trade-offs that have to be made, but the longer someone waits, the bigger those trade-offs tend to become, Brownstein said.That could include relocating where you live to having a nonworking spouse re-enter the workforce.
It may also mean cutting back on helping your children with their college funding, which can be a difficult choice for some parents, Brownstein said. If there is that decision that I can either afford to pay for my retirement long term, or I can afford to pay for college, retirement should be what’s chosen for most people, Brownstein said. You can take out student loans, but you cannot borrow money to fund your retirement.
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