Stop searching for information about retirement. Read our blog and watch our youtube series specifically created for Gen-X. You are only 20 years (+/-) from retirement. The average monthly Social Security benefit will just about cover the average housing rental cost. News flash: 40% of Gen-X retirees will fund their retirement from Social Security, up from 30% today. 25% will live only on Social Security in 20 years. Does this scare you into action?
Where will you find the money for food, cell phone, and many more things? If you have not started to prepare for retirement, you still have time. Take the time to read this article, then go to our series.
This series planned for a weekly release will cover everything you need to know. Yes, everything. To make this complicated topic something you can understand, we are breaking it down into major topics.
“Gen-X only 20 years to retirement get planning now” is #1 in Generation X 20 Years to Retirement Series. Read all of the articles by clicking on the button at the bottom of this article and join our interest list for a new educational course “Generation X Preparing for Retirement”
Some key topics covered in the Gen-X Only 20 Years to Retirement series:
- About retirement – the idea of leaving your career, how the actual process works, and more.
- Lifestyle – adjustments include about all that time you may have to fill.
- The planning process – includes many sub-topics
- Relocation – Consider relocation to reduce your expenses and increase your standard of living
- Budget – This is a big one. You will have access to our exclusive budget tool, a ground-up detail-oriented system
- Social Security – Strategies to consider include how Medicare works when you qualify, and more.
- Savings – Everything 401(k), Roth IRA all retirement savings accounts, and more
- Investing – including in real estate
- Credit Card – debt and other debt to control your expenses and financial obligations
- Wills and Trusts – what will happen to your savings when you are gone?
As with all generations, some are older Gen-Xers and younger Gen-Xers. For purposes of our whole series, we are basing calculations on a Gen-Xer who is 50 years old. The series focuses on age 70 for a 20-year time period between now and retirement.
Our tools can be adjusted to any age or retirement date
You will have the opportunity to make adjustments to some of the tools included in the series for your actual age. Basically, you have plenty of time to start today with your planning.
I have written about the Baby Boomers who are mostly retired or entering retirement and I have produced a series for Millennials. Baby boomers are already dealing with issues that you will have plenty of time to understand and do a better job than they have. Millennials are just behind you and they have even longer to build wealth. None of this is your concern, that’s why this series focuses on you and others in your generation.
Gen X’ers did not attend retirement classes in high school or college. Their parents are Baby Boomers many of whom received the last of the defined benefit pension plans. Why would the Baby Boomers teach their children what to do for retirement since they were probably set up for retirement? Where would you learn what to do about retirement? The internet?
Gen-X target retirement age is 70
If you want a successful retirement with a comfortable lifestyle, you need the benefit of information and lots of it. There are many decisions to make over the next few years. As I mentioned above, we are looking at age 70 which is the full retirement age to maximize your Social Security Benefits.
The series will include tools in the form of spreadsheets, tables, and other data. Unlike several articles I have looked at regarding retirement, you will not be referred to a dozen other sites to gather more information. If it seems that the topic is too big to cover in a single installment, we will break it down into smaller ones.
There is a strategy for everything related to retirement. Early withdrawals from a traditional IRA, Roth IRA options, and much more are just in the finance area. Then there is the Social Security Administration and all of the issues related to when and if, how much, etc.
Only 42% of Gen Xers have a written retirement strategy
The vast majority of Gen Xers do not have a retirement plan according to knowledgeable sources. Transamerica an insurer and provider of retirement services have taken a survey of Gen X workers. They have found that while 72% are saving for retirement, only 41% have a written retirement strategy.
I hope that you are not going to be part of the 22% of Gen Xers who will not be saving after going through our series. Then again, I also hope that if you are in the 59% without a retirement strategy, you will create one as a result of our series.
Financial challenges have hit many and using financial hardship as an excuse to derail a retirement strategy should be unacceptable. It’s a good idea to be thinking big right now, and consider everything related to retirement, not just money.
Retirement planning is not just about money
Most articles focus on money but there is much more to consider. The silver linings that great planning can provide to you. At the minimum when you wake up in the morning and have your coffee, you are not worried about paying the mortgage.
I fear that poverty rates among Gen Xers will be bad. There are too many people who live today and think someone else will take care of them in the future. The golden years are only going to be golden with some effort. If you put the time in to not only view our videos and read our articles but implement what you learn, you will be among the 31% who believe they will retire comfortably.
A 2021 study by the National Institute on Retirement Security found that the median retirement savings of Gen Xers were only $72,000. You would think that with a median income for a Gen X er at between $77,000 and $86,000 the average savings should be higher.
20 years is enough time to save $800,000
If you started at $72,000, the national average and you saved the maximum allowed in a 401(k) plan ($22,500, or $30,000 if 50) plus an employer-sponsored retirement plan match your annual deposit could be as high as $40,000. This means you could save $800,000 in the next 20 years.
Of course, saving the maximum on an $80,000 per year salary does not leave much to live on so $800,000 as a target will not be possible for a large number of Gen Xers. Don’t fear, your income is likely to increase during the next 20 years. Plus the value of equities increasing over time added to dividends and interest earned on your investments.
Married couples will do better since they can share many living costs such as housing, utilities, food, and more. If you are living in a high-cost area, you have the option of relocating to save money. Keep in mind as you are working on your plan, the total amount you will need to retire is based upon what you spend. You will soon know how much you will need after using our budget tool found in our next installment of Gen-X only 20 years to Retirement.
Where and what do you spend your money on
Our series will cover far more than just the amount you earn or save, we will dive deep into where you spend your money. The second installment in our series is all about the budget. For some of you, the first run-through will be somewhat painful.
The exercise of working with the budget will help you focus on your retirement needs not just your wants. You will see how much savings you will need based on factors such as income and expenses. All are variable at least during the planning stage.
One of the topics that will be discussed is aging parents. Taking care of parents who may need to live with you can be a cost that their Social Security will not cover. The shortfall must be accounted for. Let’s have that discussion in a future article. If you expect to take care of your parents, you will need to in effect plan their retirement as well. Include their nest egg with yours in the planning stage.
Before you consider signing for that student loan
Do you have student loans that must be paid back? Are you signers on a student loan that could affect your retirement? This is a major problem for many getting close to retirement. There are members of Gen X who have had children later in life.
You may be one with an 18-year-old about to attend college just as you are hitting 63 and getting ready for retirement. We will cover this too, particularly the negative impacts of being responsible for college tuition in retirement. If you have not signed on for a student loan, we will give you some good points to consider related to Gen-X and how a student loan can affect your retirement.
How long will you work? Generation Z is expected to work until about age 70 due to their failure to plan earlier for retirement. Even when they have planned for retirement, life happens. Setting a date is helpful but not required when you are 20 years out. Previous generations such as the Greatest Generation and the Baby Boomers had a defined benefit pension plan. These are almost unheard of outside of public employment.
Most Gen-X do not have pensions for retirement
Older generations knew they had a defined benefit pension plan waiting for them and planning for retirement had little to do with money. Retirement planning for older generations was more about how to fill all that time. For Gen-X, retirement is really about money plus those other things. Since most Gen X parents knew they were set up for retirement, they spent little or no time on financial planning education with their children.
Even younger generations are better off than Gen-X because they are starting to save at a much higher rate. Perhaps some of this is the fact that they as Gen Zers are still living at home getting free money from their parents which they are saving. This generation has not yet taken on the large student debt that older siblings and their parents carry.
As a generation, members of Generation X will have opportunities in the labor force to fill jobs vacated by the larger Baby Boomer generation. Their annual salary is likely to increase at a more rapid rate. This should have a positive effect on retirement income with more savings as a result.
There is no magic number for retirement savings
I have mentioned above that there is no magic number regarding how much money you will need in retirement. Your budget will tell you how much you need. The key driver is your lifestyle in retirement. There is no generalized anything.
Some tell you that your retirement plans must include x or y. Some tell you that your financial goals should be this or that. Any certified financial planner should take you through the process from the bottom up.
The series will discuss options for earning income before and after retirement. The term retirement is essentially a figment of the past. Just think about “retirement” as a transition from spending 8+ hours per day. You will not allow the great recession to prevent you from reaching your retirement goals.
During the next 20 years, there will be ups and downs in the economy. Part of the drive to achieve financial security will be to anticipate these and take advantage of the ups and weather the downs. Gen Xers have gone through a couple of financial crises and there will be more. The stock market is a fluid thing and while you will diversify your investments with various financial products, effective planning will bring you through it.
Pro-active tax planning is part of the process
It’s a good time to start the planning process now. Why? The equities market is down, as much as 30%, the portion of your savings used to buy equities now will help you as the market improves over time as it always does. FYI, we will also discuss proactive tax planning as part of your financial strategy. On the money side, this series will focus on maximizing your annualized return and creating that emergency fund.
Our series will not attempt to replace a financial advisor. There will be no specific recommendations to purchase particular equity for your retirement accounts. What you will learn is what are the types of financial products you could invest in. The more you know about every aspect of retirement the better you will be able to work with professionals such as estate planning attorneys, fiduciary financial advisors, and your certified public accountant.
My goal is to put you into the quarter of Gen-X who will enjoy their golden years with a solid retirement plan. Today you will learn to think of your future self and what that person will say about your planning efforts.
Baby Boomer Parents- Time to help
Baby Boomer parents of Gen-X “kids” have some experience with retirement, it’s time they pass this information along. Most people do not talk about retirement preparation with their children or parents. I strongly suggest that parents and children begin a dialog about all aspects of retirement. Time to discuss medical costs, funds in retirement accounts, and much more.
Gen-X “children” may find that they will need to support their Baby Boomer parents and any cost must be included in a retirement budget. Also, the largest wealth transfer between generations will occur between Baby Boomers and Gen-x in the future which will affect retirement budgets. Don’t ignore the topic, get into it and revise your budget.
We recommend that you read the series on your computer or tablet as the tables and tools may be difficult to work with. This is particularly true for the budget. If you are married, it’s best that you work on it with your spouse, the larger screen will work better.
Gen-X Children and Retirement
You are the in-between generation. You are working on your retirement and you may have parents in their early 70s who are still working on their own plans or at least working on their plans. What about your children? Many people in their 50s have children who are at least in high school and some who are married.
As you learn about all things retirement, you should be passing this wisdom along. Encouraging your own children to learn what you are learning. There is a great series created for Millennials who may be a bit older than your children but the articles will help them. Check them out by going to this page where you can find the entire series. Come back here after using the link.
Gen-X only 20 years from to Retirement – Series Directory
Click here to see the other articles in this series. The directory has links to each article.
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RetireCoast Course: Generation X Preparing for Retirement
A full educational course is in development that will greatly expand what is presented in our blogs about Generation X retirement. The course is designed to help Get-Xers get a head start on the process. The contents of the course will include facts, personal experiences and suggestions, and recommendations.
The course outline will be available soon. An introduction to the course will be produced and become available to all who have joined our interest list. As soon as the course is complete, you will be invited to review a free chapter before deciding to register and pay the fee at that time. Complete the form below and click “Submit” to join the interest list.
