Gen X and Retirement: Can I retire or am I cursed to working for life?
Wednesday, June 28, 2023
Today, I wanted to write a blog about the recent Russian Coup, but I realized something. I am not qualified to talk about that and, as of now, we do not have enough information to know definitively what is going on in Russia. So, today we will stick to something I find near and dear to my heart. Retirement! Specifically, I wanted to talk about Gen X and retirement. For posterity’s stake, Gen X is the generation born between 1965 and 1980.
I read a news article today about Gen X and retirement on Market Watch. In this article it showed that 82% of Gen Xers plan to work either part time or do not know if they will be able to retire. This was taken from a Prudential Financial survey. I was very taken a back by this statistic. 40% of those surveyed envisioned working part time and 42% say that it was too early to tell if they would be able to retire. The Prudential Financial survey also found that 18% of Gen Xers had nothing saved for retirement and 35% had less than $10,000 saved. Now here is the interesting bit, Gen Xers are in the prime working years and the highest earning years of their lives.
With the pandemic and a mass resignation of baby boomers Gen Xers should be moving into higher level positions and thus larger incomes. This increase in income should satisfy the ability to retire. In my opinion, you will see these numbers change as Millennials begin to move into higher positions and increase their income. In fact, I believe in future surveys you will find that Gen Xers plan to retire earlier, they will be wealthier, and you will see a boom in economic activity here in the United States and abroad.
In a few different studies I have read there is to be a $70 Trillion dollar transfer of wealth from baby boomers to the coming generations. The article on Market Watch has you believe that this will move to Millennials directly, however I do not believe that will be so. Typically, you will see parents and grandparents passing wealth to direct descendants first, with a small stipend allocated to secondary descendants. In my opinion, this will retire Gen Xers sooner and largely wealthier. If you are a Millennial and reading this don’t worry, your time is coming.
So, what can a Gen Xer do to solidify their future? Firstly, any financial habit changing, or discussion should start at home. I mean really “talk about money.” This may be a bit uncomfortable or even terrifying but trust me, money and financial security will not be any less scary the longer you put off the conversations. Your objective with financial conversations with your friends and family should give you an idea of your goals and your floor for what is suitable for retirement. Next, start to formulate a financial plan. Think of financial habits as an exercise that you do on a regular basis. Familiarize yourself with a financial plan (created by you or a financial professional) and carry it out. You will be surprised by how the little things can make a big difference. Last, visualize your goals as check points. When you have hit one check point and moved to the next you keep your thinking objective based and the large over arching problem of wondering “if you can retire,” can soon become easy to understand and easier to digest.
At the end of the day, you must find what works best for you and your family. If you are uncomfortable with the idea of money and retirement, that just means you care and have a genuine concern that is held by many. It is up to you to make any adjustments or changes that will enhance your position and future.