Most adults begin focusing more attention on their retirement savings when they enter their 30s and 40s and the possibility of falling short on savings starts to take its toll. For many individuals belonging to Generation X – those between ages 38 and 47 – this prospect is very real, a new study reveals.
New research compiled by Pew Charitable Trusts found that this generation is likely to experience a more stressful and financially difficult retirement than the baby boom generation. The study found that members of Gen X were hit disproportionately hard by the financial crisis, perhaps because this group may have greater financial responsibilities than the group before them. Individuals in this demographic are typically raising children, maintaining a home, paying off student loans and trying to save for retirement, whereas older workers may be further along in these goals. As a result, younger individuals may have a great deal of catching up to do in the way of saving money and paying off credit card debt and mortgages if they plan to reach the same level of financial security other generations have enjoyed.
“Many younger Americans were already behind in saving for retirement, and suddenly millions of them were out of work or owned homes worth far less than they had been just a few years earlier,” according to the report.
Getting a better handle on money management
Separate data from New York Life shows consumers of all ages are concerned with their ability to strengthen their financial profile, with 51 percent of Generation Y members and 49 percent of Gen-Xers expressing dissatisfaction and stress over their finances. It’s important for adults of all ages to start focusing on their long-term viability, and this is typically accomplished by paying off high-interest debt and building savings reserves.
Individuals can begin by developing a budget that centers around debt repayment, be it credit card or student loan balances. Prioritizing accounts with the highest interest rates is crucial to avoid paying excessive interest charges and paying more than the minimum amount owed can make a great deal of difference in how quickly the balance is eliminated. Cutting back on certain expenditures and living a more frugal lifestyle is also effective at freeing up more income to put toward credit cards and student loans. Those who are still having trouble making ends meet may also consider consolidating their balances or negotiating the terms of their account with their lender. Seeking out professional assistance from an advisor or credit counselor can also help consumers develop a plan that s