Gen X is approaching retirement age, but many feel unprepared and anxious about their financial future. A recent study revealed that 70% of Americans aged 50-60 are considering delaying retirement due to four significant worries. The first concern is not having enough money saved for retirement.
The average retirement account balance for savers ages 55 to 64 is just $244,750, with the median even lower at $87,571. Experts recommend having around 10 times your final salary invested by retirement age. To overcome this fear, it is important to save aggressively, automate contributions, and take advantage of tax breaks and employer contributions.
Inflation is another major issue, with 47% of survey respondents aged 50 and over citing it as a reason for pushing back retirement. Inflation has risen more than 4% annually since 2021, with the 2022 average at 8.00%. This can be particularly challenging for seniors on a fixed income.
Gen X’s retirement savings anxiety
To combat this, consider maximizing Social Security by delaying benefits until age 70 and avoiding being too conservative with investments. The lack of a safety net and limited financial options concern 42% of Gen Xers.
Without pensions and with limited savings, many worry about falling into poverty. Buying an annuity that offers guaranteed income is one option, but consulting with a financial advisor is recommended. Finally, fear of economic downturns prompts 31% of Gen Xers to delay retirement.
Having lived through the 2008 global recession and the 2020 pandemic, their lack of faith in economic stability is understandable. Maintaining about two years’ worth of liquid cash can help mitigate this concern by allowing retirees to avoid selling investments at a loss during market downturns. To increase their Social Security benefits, Gen X can work until full retirement age (currently 67), delay claiming benefits until age 70, put extra money in retirement accounts to supplement Social Security, and pay down debt before retirement.
By addressing these fears and adopting innovative financial strategies, Gen X can be more prepared and confident as they approach retirement age. Planning and making informed decisions today can lead to a more comfortable and secure future.
