GenX retirement could be a pipe dream if…
In a recent survey, 84% of GenXers surveyed said that retiring at 65 is a fantasy. The reality, though, is that GenXer retirement doesn’t need to be a pipe dream.
What is a GenXer?
Pew Research Center showed that GenXers are more concerned about retirement than either Baby Boomers or Millennials. Much of this has to do with the fact that GenXers are the sandwich generation. Many of who, are caring for aging parents while funding college for a generation that’s seeing tuition and cost of living in college explode bigger than a Trump-gaff on Twitter.
What can GenXers do to be better prepared for retirement, while managing other responsibilities? Forbes contributor David Rae of FinancialPlannerLA.com joined us on Queer Money™ to share money tips that everyone but especially GenXers can follow to seal the deal for a happy and safe retirement. He also has some great tips for those of us in the LGBT community who may just be waking up to preparing for retirement.
Money tips for a better GenX retirement
First, if you’re a GenXer, now’s the time to ramp up retirement savings if you haven’t started already. Everything will only be more expensive in twenty to thirty years.
1. Become money conscious and avoid lifestyle creep
Whether it’s a bonus or a raise, it’s near impossible, to avoid lifestyle creep. We live in a consumption culture and many of us like to show off on social media, in our driveways and over cocktails with friends.
Becoming conscious about where and how you spend and staying aligned with a budget is the best way to ensure you have enough money to pay yourself first via a 401(k) or another employer-sponsored plan. Using a tool like Honeyfi will let you and your partner get on the same page with spending and creating a realistic budget.
2. Maximize your earnings at work to increase retirement contributions and retirement allocations
Nearly 80% of queer adults don’t have children, which lets us be nimbler and geoliberated when it comes to working. Do you need a job in another city where it the cost of living is cheaper, or where you can get a higher salary? Is now the right time to start your own business? Doing so may help you to add an additional $100 per paycheck to your retirement. Adding an additional $200 a month to a retirement account, invested for a 7% return over 20 years could add over $100,000 to your retirement savings.
If you’re like most, investing in a 401(k) is as foreign as the Chinese character for happiness. What can you do? Getting help from professionals is a great way to go, but they can be costly if you don’t have significant investable assets. Plus, their fees may eat away at your gains. Blooom has a great free 401(k) analyzer to help cut fees and increase gains while leaving the investment decisions up to the professionals.
3. Put yourself first ahead of Boomer parents and Millennial children
This may sound harsh, but don’t forsake your future for those who haven’t prepared for theirs. Don’t be pressured to give into your children. Making Millennial and GenZ children responsible for college costs, loans and gifts may mean the difference between financial security and financial insecurity in your retirement years.
Have these conversations sooner rather than later so that everyone’s prepared for the future. It may be worthwhile to talk about taking care of yourself now so they do not need to take care of you later.
4. Get comfortable with investments
Six in 10 queer GenXers are uncomfortable with knowing when, where and how to invest. Even if you’re not part of the queer community, investment education and research. Set a goal of learning a bit more about investing each month. If you don’t employ an investment advisor like Rae, use the tools at your disposal to increase your knowledge. There are plenty of resources available from blogs to books to Forbes’ own Retirement blog.
If you’re looking for a book about retirement, Matthew K. Miller’s From Millennial to Millionaire: DIY 401(k): Five do-it-yourself steps for the digital generation to design and manage their 401(k) is a great start for the novice investor who wants a DIY retirement plan.
For many of us, retirement is a far-off land. As we draw closer, let’s make sure that it’s the promise land we want. Take a listen to the Queer Money™ episode above for more information and a few laughs about GenXer retirement planning.
