If you’re among the estimated 65 million Generation X Americans born in 1965 through 1981, your financial security in retirement may be at risk. And this holds true for the 42% of GS workers who are Gen Xers. Born after the Baby Boomer generation, Gen X is officially poised to retire and, with the oldest turning 59-1/2 in 2024, some already have. Unfortunately, there are significant realities that may make planning for a financially secure retirement more challenging for Gen X.
Gen X Must Wait Until Age 67 To Collect 100% Of Their Social Security
As mentioned in a previous article, the Social Security Full Retirement Age (FRA) for Gen X is now 67. However, there’s a greater issue at play. Even if you’re a Gen Xer who waits until age 62 to retire to get the FERS 10% bump, your Thrift Savings Plan (TSP) balance needs to be enough to help cover expenses for five more years. If you haven’t taken the time to calculate whether or not your FERS annuity (pension) and TSP distributions are enough to cover your retirement expenses, you may end up with an income gap. Of course, you can fill that gap by applying for your Social Security benefits early when you retire at 62, but doing so will reduce the amount of your benefit by 30%, forever.
“Add to this, as reported in an article published by The Hill, Gen X also has the highest median credit card and auto loan balances.”
9 In 10 Gen Xers Hold A Significant Amount Of Debt
The results of a Pew Charitable Trusts’ Survey of American Family Finances show that 9 in 10 Gen Xers reported holding significant debt – the highest proportion of any cohort including Millennials. And, according to the Education Data Initiative, 21.2 million Gen Xers have more student debt than any other generation. Add to this, as reported in an article published by The Hill, Gen X also has the highest median credit card and auto loan balances.
More Gen Xers Are Raising Children & Caring For Elderly Family Members
Also known as the Sandwich Generation, Gen X is more likely to be caring for elderly parents while also still having children living at home. In fact, this is more common among Generation X than older generations including Baby Boomers. According to caregiving.org, the average Gen X caregiver is 47.6 years old and typically married or living with a partner. About half have children under 18 living in their homes while also caring for older family members.
Of course, when you consider these financial challenges, now more than ever Gen X needs to get serious about their retirement plan. Talk with an FRC® trained advisor who can help you plan your financial future before it’s too late.
