If you’re a member of Generation X, chances are you may be
feeling that “Reality Bites” when it comes to your retirement planning.
That is because many members of Gen X — who were born
between 1965 and 1978 — face challenges that the baby boomers who came before
them and the millennials after them do not.
A recent survey from the Transamerica Center for Retirement
Studies found that Gen X Americans are more likely than baby boomers and
millennials to indicate they "may never recover" or have "not
yet begun to recover" from the Great Recession.
At the same time, they are juggling their careers and
caring for their aging parents. And many of them are behind on their retirement
A separate survey from money manager Personal Capital found
that more than one-third of Gen Xers — 34 percent — have no retirement savings.
As the youngest Gen Xers turn 40 and with the oldest in
their early 50s, there is still time to catch up. But they have to act now,
according to Catherine Collinson, CEO and president of the Transamerica
Institute and Transamerica Center for Retirement Studies.
“They still have a time horizon where they can build plans,
save more and achieve financial security in retirement, but they’re also not
getting any younger,” Collinson said. “So the sooner they get started and
refocused, the better off that they can be in the long run.”
up with a plan
For many Gen Xers, that starts with establishing where they
Personal Capital's survey found that while most Gen Xers
say that having a financial plan is the most important thing when it comes to
having a secure retirement, many do not 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.
List all of your assets and debts. Next, write down exactly
how much money is coming into your household and how much is going out.
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
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.
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
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
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,
“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.”
here for the original article from CNBC.