Gen X: Financial Milestones, Challenges & Solutions

Retirement Planning

Checkpoints for Gen X

Retirement planning is a long-term process that often feels like a lifetime away. However, for Gen X, retirement isn’t a lifetime away – it’s just around the corner. That can invoke panic as you wonder if you’ll be ready to hang up your hat on the workplace within the next decade.

Consider these checkpoints to aid you in determining your readiness:

• Assess Your Savings: Calculate if you have enough funds to support your anticipated retirement lifestyle. Aim to have at least 6 to 7 times your annual salary saved by the time you reach age 60.

• Evaluate Your Accounts: Review your 401(k) plan, Individual Retirement Account (IRA) balance, and any other investments you own. Are your current contributions building a large enough nest egg to support you throughout your golden years?

• Estimate Your Expenses: Many forget their expenses during retirement will likely be much lower than they are today. A significant financial change is that your children will no longer live at home. Take time to estimate your living expenses during retirement to gauge how much you’ll need annually.

Tips to Catch Up If You’re Behind

If you find yourself behind on your planned retirement savings, there are several strategies you can employ to help you catch up:

• Increase Contributions: Take advantage of catch-up contributions if you’re over 50. This IRS rule allows you to contribute more to your tax-advantaged retirement accounts annually. Additionally, you can increase other investment contributions to boost your overall savings.

• Reduce Expenses: Cut out any unnecessary spending and redirect those savings into your retirement fund. Even little tweaks to your budget can yield significant savings over time.

• Delay Retirement: Many couples will have one person retire while their partner continues to work for a few more years. This strategy allows you to adjust to retirement life yet still have one income in case budgeting adjustments are necessary.

Managing Debt

Tips for Paying Off Debt & Loans

Eliminating debt is crucial as you head into your golden years. You want to avoid living on a fixed income and still owing money on your home or other loans. In addition, reducing debt in the years leading up to retirement will allow you to put more money into your savings, helping to pad your nest egg.

• Consolidate Debt: Combining multiple debt balances into a single loan or credit card, especially at a lower interest rate, will allow you to pay off your debts much faster and immediately reduce interest payments.

• Increase Payments: Commit to paying more than the minimum monthly payment on credit cards and loans. Every additional dollar you pay toward the principal balance reduces interest payments and brings you one step closer to becoming debt-free.

• Refinance Loans: Working to lower interest rates or decrease loan terms can help free up additional money to put toward your retirement savings. Refinancing might sound complicated, but the process is relatively easy and an excellent way to save more.

We’re Here to Help!

Navigating the financial landscape of middle age and the changes it brings can undoubtedly be a lot to handle. However, with careful planning and using the right strategies, members of Gen X can achieve financial stability and prepare for a secure future. The credit union is here to support you every step of the way.

Our team of financial advisors can help you create and implement a personalized financial plan to assist in covering all your family’s unique needs. If you’d like to partner with one of our financial advisors or explore other savings and investment options, we’re ready to help. Please stop by any of our convenient branch locations or call 888-777-9982 today to speak to a team member today.