70% of Gen Xers Say They Can’t Afford To Retire — They’re Right If They Don’t Do These 8 Things

It’s a good thing Gen Xers are considered so scrappy — according to one Lending Tree survey, 70% of them will need all the help they can get to be able to retire.

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“One of the hard realities of the latchkey generation is that many of us are grappling with aging parents while also caring for our own children,” said Tansley Stearns, president and CEO at Community Financial Credit Union in Michigan. “This, combined with inflation and other rising expenses, can create pressure and may lead to taking on debt to address the financial burden within our households.”

While some of those survey respondents may have been speaking out of anxiety, based on Stearns’ insight and more, it’s true that some Gen Xers are going to have trouble retiring if they don’t do the following eight things, according to experts.

Gen Xers making two key mistakes, according to Tyler Meyer, CFP and founder of RetireToAbundance.com. They’re avoiding reality and trying to copy someone else’s retirement blueprint.

He finds that many Gen Xers are chasing a “magic number” they read online without factoring in their own cost of living, health and goals.

Another common issue is lifestyle inflation, “where extra income goes toward bigger cars, homes and vacations at the very stage when savings should be getting the largest boost,” he explained.

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If you feel behind, however, don’t think of retirement as an all-or-nothing finish line, Meyer said. For many people, retirement may look like a blend of part-time work or flexible work with investment income instead of a complete stop. “That shift in thinking instantly lowers the savings target and opens up more possibilities,” he said.

If you feel you missed your window, don’t forget that you still have the ability to make catch-up contributions to tax advantaged retirement accounts.

For those with access to a 401(k), the age 50 and up catch-up provision is one of the fastest ways to close the gap, Meyer said. This means you can add an additional $7,500 per year to the existing cap of $23,500. For the self-employed, Solo 401(k) plans and SEP IRAs allow much higher limits than traditional IRAs and are often underutilized.

If Gen Xers find themselves with high-interest debt while they’re saving for retirement, particularly in the “current economic climate,” Meyer urged paying down the high-interest debt first while still contributing just enough to capture any employer match.