Gen X Is Headed for Retirement Crisis: 5 Ways To Avoid Being Part of the Trend

Man doing home office

Several studies have found that Gen X is less prepared for retirement than both baby boomers and millennials, with many members of this generation falling significantly short in their retirement savings. The lack of savings is an indicator that Gen X could be headed for a “shocking retirement crisis,” according to Entrepreneur.

Try This: How To Get $340 Per Year in Cash Back on Gas and Other Things You Already Buy

However, this generation can still turn things around. The youngest Gen Xers are still two decades or so away from traditional retirement age, and even those on the older end of this generation — who are turning 59 in 2024 — could make some high-impact moves to retire in a better place.

Here are a few key ways that Gen X-ers can avoid a retirement crisis.

Sponsored: Credit card debt keeping you up at night? Find out if you can reduce your debt with these 3 steps

Start Putting Yourself First

Many members of Gen X are part of the “sandwich generation” — which means they may have been financially supporting aging parents and their children at the same time. But as these children become adults, it’s time for Gen Xers to start putting their own finances first.

“There’s this big shift in life at this time because, hopefully, you’re going to be an empty nester and so your priorities with your money have to shift back to you,” said Pam Krueger, founder of Wealthramp. “You’ve got to take care of yourself because you’ve been taking care of your kids and you may have the strain of having parents needing help too.”

Be Aware: Cutting Expenses in Retirement: 6 Home Items to Stop Buying

Prioritize Paying Down Debt

Having to support parents and children at the same time can stretch your finances thin, so it’s no wonder that many Gen Xers have accumulated significant debt. To put yourself in a better financial place to retire, paying down this debt should be a priority.

“Try to pay down debt as much as you can,” Krueger said. “Make it a priority to live under your needs. I know that Gen X is still consuming, but consume less. Whatever you have to do, shift the priority urgently from money going out to money staying in, and figuring out ways to add more money.”

Take Advantage of Catch-Up Contributions

Whether you utilize a workplace retirement plan or an IRA, you can begin making “catch-up” contributions the year you turn 50. In 2024, you can contribute an additional $7,500 annually to a 401(k) or similar plan, and up to $1,000 annually to an IRA.

“The reward is that over the next 15 years, if you took advantage of that 401(k) catch-up provision, you’re going to wind up with roughly $100,000 more in your nest egg,” Krueger said.

Have Frank Money Conversations With Your Family

It helps to get your whole family on board with your retirement savings goals. This will often mean having some uncomfortable, yet necessary conversations.

“Start talking about money with your family,” Krueger said. “Let’s not make this such a taboo topic. Look at what you’re trying to accomplish together and how you can work together to cut spending. Talk about estate planning. This is the age where you want to relieve stress on your whole family by making sure that you have made it clear where all the passwords are, where the keys to the castle are in case something happens to you.”

Seek Professional Help

Sometimes it can be hard to figure out the best course of action on your own. That’s why Krueger recommends seeking out the help of a financial professional.

“You can look with your own eyes, but isn’t it better to get some fresh eyes?,” she said. “[Financial planners] are able to see things that you may not even see, whether it’s taxes, spending or cash flow. [They can] do a deep dive on your investments to consolidate everything. That’s going to help you make big decisions.”

More From GOBankingRates

This article originally appeared on GOBankingRates.com: Gen X Is Headed for Retirement Crisis: 5 Ways To Avoid Being Part of the Trend