Working out can be grueling—it requires hard work and discipline. And while that doesn’t sound enjoyable, improving your physical fitness can be intensely gratifying.

That contrast of emotions is not unlike getting financially fit.

Managing fear, embracing hope

A recent New York Life survey of 2,200 Americans—taken in late March and early April—showed that people were feeling a range of contrasting emotions in regard to their financial futures—worry and love, fear and hope.

The pandemic, of course, appears to have amplified these emotions, which play a powerful role in planning for retirement. In fact, our survey results suggest that positive emotion is linked to financial confidence, and that addressing retirement planning could help counter some of those negative feelings.

Many of those in Generation X (currently ages 40-55) who were surveyed are feeling less confident than other generations about their future. Only 44 percent were confident  that their retirement savings would last the rest of their lives. In addition to the need to plan for retirement, many Gen Xers are also caring for children and aging parents at the same time—and as a result have been named the ‘Sandwich Generation’. This has impacted how Gen Xers feel about their future.

A dream with a deadline

Despite the emotional and financial challenges of our times, there’s still hope—and time—to plan and prepare for retirement. As legendary self-help guru Napoleon Hill famously said, “A goal is just a dream with a deadline.” Here are five things every Gen Xer can do today to shape up those retirement goals:

1.     Practice discipline. It can be really difficult to save when you have a lot of competing priorties. But like the best workouts, it’s not about going big all at once. Start with a small amount that you can find from a discretionary part of your monthly budget, and make a habit of saving that amount consistently every month. Make it easy and ensure it’s automatically deducted on a regular basis, whether through payroll deductions for your employer’s 401k or from your checking account into a savings account. The important part is developing a habit of saving.

2.     Do some number crunches.  For those households fortunate enough to still be employed and able to work from home during the pandemic, you may find that you are saving money on certain expenses that have gone down. For example if your dining out budget is $300 per month, even if you take half of that and put it toward savings, you can use that money across a range of different savings goals—including retirement. Taking advantage of reduced spending is easier than having to trim the fat from a tight budget.

3.     Trim the tax. Employer-sponsored retirement plans like 401(k)s are some of the best vehicles for saving. It’s pretax dollars you contribute, and any investment gains from those pretax dollars grow tax free until you withdraw the money at retirement—giving your nest egg more growing power. Remember to at least contribute the minimum amount to get all the matching contributions, a benefit many employers offer. If you’re able to max out your 401k contributions, consider either traditional or Roth IRAs for additional tax-advantaged retirement savings. Municipal bond funds offer federal and state tax benefits that help keep your tax bill manageable. Finally, many people are realizing the benefits of Health Savings Accounts (HSAs), which employers frequently offer alongside High Deductible Health Plans (HDHPs). HSAs offer an alternative tax-advantaged vehicle for savings for retirement.

4.     Pick up the pace. Both employer-sponsored retirement plans (e.g., 401ks) and IRAs allow ‘catchup contributions’ starting at age 50. If you’re feeling a little behind in your retirement goals, this allows you to contribute additional amounts above the normal annual limits set by the IRS. This is a great way to think big and establish stretch goals, and push yourself to the far end of retirement preparedness.

5.    Get a routine. Having a regular, systematic savings regimen will help keep you moving forward toward your retirement goals. Routinely reviewing your retirement plan quarterly as well as scheduling an annual planning session with a financial professional can help ensure you are setting the right goals and have a sound plan. This is all part of a routine that helps ensure you optimize your financial health and progress toward the retirement you want.

Retirement redefined

As lifespans have grown longer over the years, the idea of retirement has also evolved. Many people work at least part time long after the conventional ‘retirement age’ of 65, either because they have to or because they want to. While you may not stop working entirely, having a sound retirement savings strategy and plan is an integral part of that life so that you have flexibility.

Staying financially fit ultimately means you can do more with that retirement nest egg. So set those goals and make your retirement dream a reality. You can do it.


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Media contact
Kevin Maher
New York Life Insurance Company
(212) 576-6955
Kevin_B_Maher@newyorklife.com

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