🚨 Generation X Faces a Retirement Crisis
The next generation of Americans that will retire, may not be ready.
This one hits home for me. I was born in 1973 and that puts me right in the middle of Americans grouped as Generation X. If you were born between 1965 and 1980, that’s you too.
🌅 Baby Boomers Retire, Gen X Approaches the Finish Line
A lot has been made about all the baby boomers who are retiring. At least 10,000 a day are turning 65. And that’s expected to continue through 2027. But, while the baby boomers exit the workforce, Gen Xers are also hitting the final stretch. There’s data that suggests they will hit the finish line unprepared.
💰 Savings Struggles Across Generations
According to a study by New York Life Generation X saved an average of $7,463.17 last year. That’s barely half of what Millenials saved. They put back more than $12 thousand. Even Generation Z, who were born between 1997 and 2012 put more than $6 thousand back.
🥴 Gen X Debt and Low Financial Confidence
Generation X also reported the lowest level of confidence in their finances than other generations. Our generation also had the highest credit card balances at $9,557 on average.
And a Fidelity survey found that the average 401k balance of Gen Xers is $192,300, with an average IRA balance of $103,992.
✂️ Average Won’t Cut It in Retirement
We are often asked in a meeting room how am I doing compared to everyone else. I usually respond by saying you don’t want to be like everyone else. Average won’t cut it in retirement. The good news is there’s still time for our generation. Here are 4 action steps to get on a better track.
1️⃣ Eliminate Debt Before Retirement
Get serious about eliminating debt. Creating margin is the single biggest step you can take in being prepared for retirement. You can’t save what you don’t have. Lowering your expenses can help you save more.
2️⃣ Build a Robust Emergency Fund
Establish a robust emergency fund. A couple thousand dollars is not enough. You need to make sure that if everything falls apart and you have big items that need to be replaced or a major expense that has to be met, you don’t have to pay for it with a credit card, or cut back on retirement savings. A good rule of thumb is 3 to 6 months of expenses.
3️⃣ Don’t Count on an Inheritance
Don’t count on an inheritance. There will be a Great Wealth Transfer of an estimated $84 trillion that will be passed down from the silent generation and baby boomers, but you shouldn’t count on it for your retirement. Health care costs or long stays in a nursing home can erode your parents savings. In extreme cases, they could even make changes to beneficiaries.
4️⃣ Make a Retirement Income Plan
Make a plan to see where your current savings rate will get you at retirement and how much income that will provide you.
Securities offered through LPL Financial, Member FINRA/SIPC. Investment advice offered through Independent Advisor Alliance. Independent Advisor Alliance and GenWealth Financial Advisors are separate entities from LPL Financial.
