If you are part of Generation X, it is time to start preparing for retirement, because it is a lot closer than you think. At Keystone Wealth Management, we aim to make sure you only retire once. Although it may feel like it, retirement savings do not just appear. They are built over time, and often some of the strongest foundations for retirement are built with the guidance of a financial advisor and a well-structured plan.
This article will break down some of the challenges you may face in saving for retirement, as well as some practical steps you can take today to strengthen your financial future.
Generation X falls into a unique financial spot in history. Many of you likely grew up as pensions disappeared and the responsibility of retirement began to fall on individuals, not their employers. There are three main financial tools that will help shape your retirement:
Retirement accounts (401(k)s, Roth IRAs, etc.)
Personal investments
Social Security benefits
Many Gen X clients share one common concern: they are not sure they are saving enough for retirement. This uncertainty around saving is normal, and here are some tips often shared with clients in similar positions.
First and foremost, do not fall into the pressure of spending money for your parents or children before setting aside money for your own retirement. A good saying to remember is that you cannot retire on loans, but your child can go to school on them. Do not fall into the pressure of draining your own account to ensure no one else in your life goes into debt.
Another tip is to take advantage of catch-up contributions. After age 50, the IRS allows you to contribute more than the standard contribution limit into 401(k)s and IRAs. It is recommended that clients take advantage of this and begin increasing their regular contributions to their retirement accounts after they turn 50.
Even if you feel behind now, it is never too late to review your strategy and make adjustments. A financial plan should reflect your situation today while positioning you to pursue your long-term goals.
Ready to see what your retirement plan looks like? Scheduling a consultation can help you better understand where you stand and what steps may help strengthen your path forward.