How Generation X can ensure for retirement during times of uncertainty.
Cassette players, boom boxes, and VCRs: These are a few of the gadgets that have come and gone and now symbolize the early years for a group of people known as Generation X. According to the U.S. Census Bureau, in 2010 there were more than 60 million Gen Xers in the U.S.
Born between 1966 and 1980, the group once thought of as a lost generation is now coming of age. Well educated and quite often home owners, the oldest may be vice presidents and CEOs, while the younger half has begun to take on senior level management roles. Some have made partner in law firms, have opened consulting firms, retail stores, and styling salons. They not only have children, but some are already grandparents as well.
In other words, Generation X is all grown up and thinking about retirement. At one point, exuberance about the economy and prospects for wealth that some had created fantasies of early retirement in their 40s and 50s. Not any longer. Times have changed.
Not only has everyone been jolted by a huge economic upheaval, but a lot of traditional touchstones—the company pension and Social Security—are now under threat.
With all that uncertainty, Generation X needs to figure out how to take better care of their financial futures.
Here are a few recommendations on how you can help ensure your retirement:
- See Social Security as a bonus. If you want to maintain your current lifestyle after you retire, you cant depend on Social Security. According to Aon Hewitt's annual study, The Real Deal: 2012 Retirement Income Adequacy at Large Companies, Social Security payments will only cover 33 percent of what the average American needs to cover retirement expenses through an average life expectancy (87 for males, 88 for females).
- Start stockpiling cash now. Time is still on your side, so you should take advantage of compound interest and the time you still have to save for the future. You can start by maximizing your contributions to your employer's 401(k) plan. Also, consider deferred annuities, which offer tax deferral on growth.
- Get good guidance. Fortunately, there are professionals out there that can help you plan accordingly and make prudent decisions for the future. Contact one of our agents who can help you plan for the future.