Gen X is facing a retirement crunch. Here's how they can catch up.

Pay down debt

New York Life’s Wealth Watch survey found that Gen Xers with credit card debt carry an average balance of $10,141. With the average credit card interest rate at 24%, that comes to around $2,400 in annual interest payments, with the debt load doubling every three years.

So, what does a debt repayment plan look like in this situation? To start, list out your debts, including balances, minimum payments, and interest rates. From there, you’ll need to decide which one you want to prioritize to pay down first. If there’s a clear difference in interest rates—for instance, if you have a credit card with a 24% interest rate, a student loan at 5% and a home equity loan at 10%—then you’ll probably want to prioritize paying off the credit card, which will save you the most in interest over time. 

If the interest rates are fairly similar, many experts advise the “snowball method”. For this method, arrange your debt by amount owed, from lowest to highest, and attack the smallest debt first. Crossing off that first debt quickly will give you momentum; once it’s gone, you can redirect those debt payments to the next debt on the list, and so on.

Where should you get the funds for this accelerated debt payoff? Consider cash on hand but avoid the temptation to raid your emergency fund or retirement accounts to pay it off. A better option may be a temporary adjustment to your budget, allocating less to discretionary spending and redirecting the money saved toward your debt project.  

Paying off debt can feel like an uphill battle, because even as you’re trying to shrink the debt, interest is making it grow. One potential solution is a balance-transfer credit card, many of which offer introductory periods with 0% APR that can last a year or more. In other words, you can press pause on interest accumulation for a year or more while you chip away at the debt. Before making this move, make sure you have a plan in place to attack your debt during this 0% APR period. You should also be sure that you understand the terms of the card, including balance transfer fees and the interest rate that will kick in at the end of the introductory period. 

Go big on retirement savings

While paying off high-interest credit card debt should be a top priority, paying off other debts—such as lingering student loan debt—should be prioritized against another major goal: Ramping up retirement savings. 

“Balancing paying off debt while also saving for the future is an issue for many of my clients,” says Joel Magbitang, Financial Advisor and Partner of Magbitang Financial & Insurance Solutions. “Unfortunately, media messages often emphasize debt management over retirement planning, but this approach neglects the time value of money: the longer you have to save, the smaller the contributions required to achieve the same financial goal.”

Catch-up contributions, a specific tax provision for people in their 50s, can help ramp up retirement savings. In 2025, workers in their 50s can save an additional $7,500 in their 401(k)s (on top of the general contribution limit of $24,000). For those aged 60 – 63, the catch-up contribution limit goes up to $11,250. 

How you invest those savings is another opportunity to play catch-up. Typically, investment portfolios gradually become more conservative as you age; this protects you from a big market dip right before retirement but also means your balance won’t grow as much over time. If your 401(k) is invested in a target-date fund, that adjustment will happen automatically. It’s worth discussing with a financial advisor whether that level of diversification accurately reflects your retirement timeline and risk tolerance. 

Focus on generating continuous income

Retirement readiness requires a mindset shift, from focusing only on saving a large sum of money to planning how savings can generate continuous income. That’s especially important during times of high inflation and concerns about income lasting a lifetime. 

“The name of the game for my clients is: how many streams of income can we generate between now and retirement?” says Magbitang. “Social security, retirement plans, personal savings… Can we get to eight, nine, ten streams of income? Can we implement a whole life insurance policy that protects our ability to provide income to our family now but then also creates a stream of future income?”

Beyond creating multiple income streams, it’s also important to prepare and protect yourself against major costs, like health care, that could deplete your savings. People 65 or older have an almost 70% chance of needing some type of long-term care support, and the cost of a long-term care event can be upwards of $100,000. To prepare, Gen Xers should consider working with a financial professional to explore their options for preparing for long-term care costs. 

Decide how you, and your family, want to live in retirement  

Gen X has been both a driver and a resilient navigator of social change. Now, as they approach their 60s, they might reimagine the traditional retirement. 

While it’s true that people tend to retire sooner than they expect, there’s no denying that there’s also been a growth of the older workforce—almost double the share in 1987. Gen Xers who want to keep working into their late 60s and even 70s need to prioritize their health to extend their working years (and subsequently enjoy healthy “golden years”). They should also take advantage of remote, hybrid, and consulting options so they can continue earning income without the strains of long commutes and 40-hour work weeks. 

In addition to thinking about how they want to work as they grow older, Gen Xers should think about how they want to live. 

Given the choice, most Americans prefer to “age in place,” remaining in their home and maintaining independence rather than moving into assisted living or a skilled nursing facility. But there are hidden costs of aging in place, from home health aides to making accessibility upgrades to your home. Gen Xers approaching retirement should consider making a move now to minimize costs and maximize comfort—whether that means moving to live closer to their children, exploring 55+ communities, downsizing to a home without stairs, or even just moving to a walkable neighborhood with access to green spaces and healthy food options.