43-58, MTV Generation
Gen X Retirement? I can’t believe it, but many Gen X are now anywhere from 7-15 years away from traditional retirement age. How did that happen? But more importantly, how can Gen X secure a successful retirement that is coming ever closer? Here we discuss 7 retirement tips and ideas for Generation X as they enter the final stretch of their careers towards retirement.
A Unique Generation w/ Unique Retirement Needs
Gen X is a unique generation that remembers a time before cell phones and rampant proliferation of technology, social media, etc. We also have seen dramatic shifts in the working world and lived and invested through several strange economic situations (gulf war, 9/11, great recession, housing bust, massive globalization and now de-globalization, pandemic, etc.)
Very Demanding Time of Life
Gen X tend to be in the midst of a very demanding phase of our lives. Still raising children and potentially helping older family members as well. The middle years are commonly reported as the most challenging years of life as people juggle the demands of life, jobs, family, unfulfilled dreams, realities, aging and more…
Who Are They?
Generation X, or Gen X, refers to the demographic cohort following the Baby Boomers and preceding the Millennials. The term “Generation X” was coined in the 1990s, and typically refers to those born between the mid-1960s and the early 1980s, although there is some variation in the exact dates used to define the cohort.
Gen Xers came of age during a time of economic, social, and technological change, including the rise of personal computers, the internet, and globalization. They are often characterized as independent, pragmatic, and skeptical, and are known for their adaptability and resilience in the face of challenges.
Gen X Retirement and Wealth Building
Gen X is going to hit retirement age just about the time that social security starts to have major problems. Meaning that many Gen X need to act now to shore up finances in order to weather this potential storm. The good news is that it will not be the first time Gen X has faced challenges in life.
7 Gen X Retirement Tips & Focus Areas
In terms of retirement planning, Gen Xers face a number of challenges, including caring for both their children and potentially aging parents, as well as economic uncertainty and the changing nature of work. However, by taking proactive steps to save, invest, and plan for retirement, Gen Xers can help ensure a secure and comfortable retirement.
1. Gen X Retirement: Avoid the major mistakes
Buffett and Munger sometimes chalk their success more in terms of what they avoided doing as opposed to what they did right. What do I mean? Try and avoid the major money mistakes like buying too much house, going nuts with fancy cars, putting liabilities on credit like RV’s, fancy vacations, etc.
Find a way to enjoy life, but find a way to balance this and keep within the budget. I am all for some mad money and just going out, but try not to bury yourself in debt doing it.
2. Gen X Retirement: Automate those investments!
It is cliché but it is critical in our system. Now is the time to plow as much as possible in our investment accounts. And to ensure we are not being charged outrageous fees.
3. Gen X Retirement: Keep Health in mind
This is crunch time on our health. This is about the age that typically bad habits start to catch up to us. Stuff we got away with in our 20’s and 30’s no more. Now is time to double down on healthy actions.
I am personally a fan of micro investments in health. With each meal I ask if the food is real? Is there a fruit or veggie involved? How can I squeez in a walk or some push ups into the moment? What can I do with friends and family that is about moving. Is yard work an opportunity to stretch and be outside. Can I have less alcohol and more water.
4. Gen X Retirement: Ways to Diversify Income
Now is the time to look for ways to form multiple streams of income and to reinvest in our careers. In order to secure a retirement, we need passive income machines that work for us. One of our favorite passive income machines are Real Estate Investment Trusts (REIT’s).
5. Gen X Retirement: Either maximize retirement accounts or at least contribute something
Something is better than nothing at this point. Therefore if maxing out is too hard now, at least get a match or at least put some token amount away automatically. Take advantage of tax-advantaged retirement accounts like 401(k)s, IRAs, and Roth IRAs. Contribute as much as you can afford and consider increasing your contributions as your income grows. Taxes are bound to be an issue in the future as the country grapples with demographic shifts and degradation of social security.
6. Gen X Retirement: Diversify your investments
Diversifying your investments can help reduce risk and increase your chances of earning a higher return. Consider investing in a mix of stocks, bonds, and other assets that match your risk tolerance and retirement goals.
7. Pay off debt
High levels of debt can impede your ability to save for retirement. Prioritize paying off high-interest debt, such as credit card balances, as soon as possible.
I would also add that this time is not the time to add some large scale debt purchase. The classic example would be financing a fancy car or a vacation. sure, have a car and a vacation, but try not to put it on credit that will impede the ability to invest at this critical time.
BONUS 8. Consider seeking professional advice
Gen X is used to doing things on their own and being self sufficient, but there are times in life where we need some help. A financial advisor can help you develop a personalized retirement plan that takes into account your goals, risk tolerance, and current financial situation. They can also provide advice on tax strategies, investment options, and other retirement planning issues.
