It's time for Gen X

Generation X, born between 1965 and 1980, is approaching retirement age with concerns about their financial preparedness. A study by the Transamerica Institute and Transamerica Center for Retirement Studies reveals that only 16% of Gen X members are “very” confident they will be able to retire with a comfortable lifestyle, and their median retirement savings stand at $93,000. This generation, known for its irreverence, sarcasm, and indifference, faces unique challenges in funding retirement due to factors such as entering the workforce during a recession, limited access to private pension plans, and unsophisticated early 401(k) plans.

Catherine Collinson, chief executive of the Transamerica Institute and TCRS, warns that many Gen Xers may be on a collision course but believes there are options for course corrections. Gen Xers need to focus on keeping their job skills fresh, understanding what their employers need to work as long as they need to, exploring ways to boost income, cutting expenses, and learning about Medicare ahead of time.

Bryan Pinsky, president of individual retirement at Corebridge Financial, emphasizes the urgency of preparing for retirement during the final years of one’s career. Gen X may also be juggling competing financial pressures such as helping aging parents and putting children through college, which could call for a financial adviser or serious at-home budgeting and planning efforts.

Experts recommend saving as much as possible, planning ahead, and understanding the complex details of Medicare. However, many people retire earlier than planned due to health reasons, caregiving needs, or job disruptions. The median age for retirement among existing U.S. retirees is 62, but for Generation X, the full Social Security benefits can only be claimed at 67. Almost eight in ten Generation X workers are concerned about Social Security not being there for them when they retire, while 29% expect Social Security to be their primary source of retirement income.

When it comes to withdrawing money from retirement accounts after the age of 59½, Collinson suggests finding a financial adviser but taking ownership of one’s financial affairs. Taxes will need to be paid on the withdrawals made from an IRA or 401(k), and for Roth IRAs, the account must have been open for at least five years. Collinson concludes, “It’s your nest egg. Handle it with great care.”

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