Gen X, the Pandemic and Retirement Planning
Date: December 7, 2020

Gen X, the Pandemic and Retirement Planning

Squeezed between the massive age cohorts of the baby boomers and millennials, Generation X is often forgotten.  Though Generation X is not the largest in number, this group is certainly spirited.  Members of the Generation X age cohort have had fairly smooth economic sailing compared to their younger peers yet their opportunities do not compare to those of the blessed boomer generation.  As a result, Generation X is oftentimes less prepared for retirement than their parents. 

Let’s Discuss Ways You Can Prepare For Retirement. Contact Sapiat Asset Management Today!


If you are in your late 30s, 40s, or early 50s, it is important that you plan for your retirement with the assistance of a CERTIFIED FINANCIAL PLANNER™ Professional.  A Greeneville, TN CERTIFIED FINANCIAL PLANNER™ Professional will help you establish a financial plan, set the stage for a rewarding retirement, and ultimately help you get the most out of life.


The time has come for Generation X to prepare for retirement

Most people assume Generation X’ers have a solid nest egg simply because they attended college when it was comparably affordable, segued into a robust job market, and have had more than a decade in the workforce to save money.  However, plenty of Generation X’ers are financially strapped as they are attempting to raise children.  Some are caring for kids and also providing financial support to their parents at the same time.  

If you were born between the mid-to-late 60s and the early 80s and don’t have much saved for retirement, don’t feel bad!  You still have time to add to your investment accounts, start an IRA, contribute to a 401(k), and pile up the savings.  However, you may not understand the best approach to such a challenge.  This is where the guidance of a financial advisor comes into play.  

Meet with a Greeneville, TN, CERTIFIED FINANCIAL PLANNER™ Professional for an in-depth analysis of your current retirement picture and listen closely.  This financial expert will help you understand the best way to save for enjoyable golden years, ensuring your hard work pays considerable dividends either in the form of an early retirement or a retirement chock full of fun and fulfilling activities.


Gen Xers might have started saving early yet they have catching up to do

The statistics show members of the Generation X age cohort started saving for retirement earlier than their parents yet they are still behind in terms of where the boomers were at the midpoint of adulthood.  Many Gen X’ers assume they will need half a million dollars in the bank for a comfortable retirement.  

However, if they were to withdraw 4% from a half-million-dollar retirement fund on an annual basis, they would have a mere $20,000 to spend for the entire year.  Even if they were to tack on an additional $20,000 from Social Security, paying for household and medical costs in the future will require significantly more money.  

It is possible that it might take a quarter-million dollars for a married couple, age 65, to pay for healthcare expenses during retirement.  Add in the inevitable inflation and Gen X’ers will need even more money in the bank.  Gen X’ers started saving for retirement sooner than the boomers yet they will require much more money, are behind in terms of pacing, and face a tough job market in light of COVID-19.  Furthermore, it is awfully concerning that around 40% of Gen X’ers have no retirement savings at all.  

In fact, Transamerica Center for Retirement Studies,  shows more than 35% of those in the Generation X age cohort have less than $5,000 saved for emergencies.  It is awfully hard to believe nearly one-third of this age cohort has borrowed against its employer retirement accounts, taken an early withdrawal or a hardship withdrawal.  

It is clear the members of the Generation X age cohort are sorely in need of money for retirement as well as financial guidance.  If you are a member of this age cohort, you could greatly benefit from the assistance of a financial advisor. 


The pandemic has taken a toll on Generation X’s finances

It is no secret the pandemic has hit millennials and Generation Z quite hard.  However, the media often neglects the fact that the pandemic has eroded Gen X’s financial well-being too.  Gen X is in a difficult position as the members of this age cohort were educated in a time period when computers were not ubiquitous.  

The internet did not exist until Gen X had already enrolled in or completed college.  The resulting lack of tech skills is a serious competitive disadvantage the media rarely touches on.  

Why does this matter? Because the spread of coronavirus has sent workers home to work on their personal computers yet many members of Generation X are reliant upon jobs that do not require extensive technical acumen.  

A considerable number of these late 30’s and 50-somethings have been laid off, had their hours cut, or have struggled to make the transition to high-tech telecommuting from home.  The financial fallout has made it quite difficult for Gen X’ers to add to their retirement accounts.  Some have even had to pull money out of their savings to make it through this unheralded pandemic.

The mainstream media certainly makes a big deal about how millennials and Generation Z are saddled by crippling student loans.  However, Gen X is also mired in debt.  PwC research indicates nearly two-thirds of all Gen Xers have a credit card balance.  

Around one-quarter of these individuals carry $10,000 or more in credit card debt.  The decimated job market combined with this egregiously large debt load is precisely why 65% of Gen Xers are stressed out about their personal finances. Gen X is now dipping into its savings for healthcare expenses, emergencies, and in some cases, everyday living costs, ultimately making it that much more difficult to save for retirement.


How Generation X can catch up

Generation X seems well aware of the fact that they are closer to retirement than their college years yet the sad truth is a considerable portion of this age cohort is not on pace to retire at their target date.  Furthermore, of those who retire when desired, many will lack the funds necessary to retire in comfort.  

If you have not yet established a retirement goal, the time to do so is now.  Once you have a realistic goal set, it is time to start saving, cutting spending, and working your way toward truly rewarding golden years.

One of the most important pieces of the retirement puzzle is capitalizing on workplace resources.  The typical workplace offers to match employee contributions toward retirement up to a certain percentage.  There is no excuse for not taking advantage of an employer’s opportunity to match dollar for dollar up to a certain capped figure.  If you ignore such an opportunity, you are essentially losing out on free money that should be available during your retirement.  

Gen X’ers should know conventional 401(K) plans are funded with pre-tax money.  This is your opportunity to save money on taxes by redirecting a portion of your income toward your retirement nest egg.  If you have not yet contributed to these accounts, the time to start doing so is now.  Ideally, you will maximize your contributions to these accounts, take advantage of employer matching and pare back spending to set yourself up for a fulfilling future.


Don’t be afraid to ask for help!

Above all, the most important thing you can do to prepare for retirement is to obtain assistance from an experienced financial advisor. This financial expert will help you better understand your unique path to retirement, facilitate this journey, and set you up for a fun-filled retirement.  

At Sapiat Asset Management, we use a unique, personalized process to identify the needs of our clients. Our knowledge of your financial situation is a big part of the foundation that drives our relationship with you. We specialize in helping Generation X with their financial planning needs, and look forward to working with you. Contact us today for a complimentary consultation.


eBook CTA

Sapiat Asset Management is a Fee-Only, Independent, Registered Investment Advisor (RIA), specializing in goal-oriented financial planning and investment management for Gen X Individuals & Families, their Businesses, & the Trusts that benefit them.

Steve Dick