Gen X Retirement Tips
As the debate rages on regarding the wealth gap between the various generations of Americans, one thing is for certain regarding Generation X: this group has time. According to CNBC, most members of Generation X are heading into their peak earnings years within their careers and have a tremendous opportunity to set down the foundations for a comfortable retirement. Further bolstering their situation is the fact that Generation X will soon surpass Baby Boomers as the wealthiest overall generation in America. Now is the time for members of this generation to focus on their own retirement needs. The following tips should help get you started if you are a Gen Xer.
Establish Building Blocks for Retirement
Generation X has shown a certain level of resistance when it comes to starting retirement funds. Some studies have found that the reason is a lack of faith in financial planners. However, preparing for the future requires the setting of foundational blocks today. There is never a bad time to start setting money aside for retirement, and it can be accomplished in a variety of ways.
Some of the best steps that Gen Xers can take include opting into employer-funded retirement programs, setting up private plans such as Roth IRAs and Traditional IRAs, and even building up a rainy-day fund. With some money set aside in a rainy-day fund, for example, you are prepared for any type of financial pitfalls that might crop up along the way. It could be something as relatively minor as an unexpected auto repair or something as large as a medical emergency or major home maintenance need. Kiplinger suggests ensuring that the size of your emergency savings keeps pace with your income so that it can help you bridge the gap when financial challenges arise.
Whatever steps you choose to take, remember that action is better than inaction. Consult with a financial advisor if only to determine what steps to take on your own, if that is how you wish to approach retirement savings.
Don't be Afraid to Sacrifice for the Future
One of the best steps Generation Xer’s can take to secure their future retirement involves sacrificing. There is no reason to fear making sacrifices in the near term because those decisions can help ensure a more comfortable retirement in the future. One obvious example of sacrifices includes redirecting expenses towards clearing away debt. This comes in many forms, with examples including:
• Paying down mortgages
• Clearing high-interest debts, such as credit cards or personal loans
Another means of sacrificing includes avoiding lifestyle creep. What exactly does this mean? Well, as mentioned earlier, Generation X will soon overtake Baby Boomers as the wealthiest generation. As some people find their paychecks increasing, so too does the extravagance of their expenditures. Try to avoid spending more money just because you are making more money, and you may find that more of that excess is put to better use fully funding retirement accounts. By keeping your spending in check even as your income rises, you will enjoy greater wealth long term.