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Generation X, I see you: 5 pieces of financial advice for a forgotten generation

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This story is part of So Money (Subscribe here)an online community dedicated to financial empowerment and advice, led by CNET editor in chief and So Money podcast host Farnoosh Torabi.

Congratulations, Generation X. Looks like you’ve discovered all your money puzzles. If you were born somewhere between the mid-’60s and ’80s, you should now have plenty of savings, no debt and a solid retirement plan.

number?

of course not. But the financial advisory community seems to focus primarily on helping millennials and Generation Z, those born after 1980. Then there is the older generation of baby boomers born in 1946 and 1964, who have received a remarkable amount of attention from websites and books as they navigate their retirement period. The maze of medical care.

In between, Gen X (of which I consider myself a proud member) has been somewhat overlooked. If you are a person of color within this demographic, you may feel completely left out. I know this because I’m part of the problem. My work doesn’t always focus on the financial needs of Americans in their forties and fifties. when Owns I highlighted this group in my podcast or in articles, I noticed a slight rise in engagement and more “thanks”.

On the other hand, Gen X has been able to keep its head above financial waters more than the older and younger generations. Between 2007 and 2010, after the real estate bubble burst, the average net worth of Generation X fell by 38%, and boomer households experienced a 26% decline, according to Pew research.

In the aftermath, some GMs were fortunate enough to retain the assets and continue to operate, and were able to recoup losses – and more – well before retirement.

We paid less for college, too. In 1995, the average annual cost to attend a four-year institution was just over $10,000, compared to $28,000 today. Chances are, we didn’t get into a deep recession upon graduation.

However, the journey has been anything but linear for members of Generation X. Although we may not need much advice on how to incorporate student loans, life events and responsibilities—marriage or divorce, raising children or not, caring about aging parents and more—leave many In this demographic they struggle at critical junctures.

We can use some personalized financial advice and out-of-the-box strategies.

“We’re really right in the moment in our careers and our lives where everything happens, whether it’s in our jobs or in our relationships…I don’t want to be frustrated but…that’s a lot,” says publisher Margit Detweiler. Detweiler is the founder of TueNight.com, a platform for storytelling, as she describes it, “influential Generation X women.”

Financial advice for my Generation X peers can include several books, so I thought I’d start with these five steps and promise to dedicate more coverage in the future.

1. Career: It’s never too late to ramp up

If you’ve been climbing your career for a decade or two and wondering what’s next, take inspiration from the many examples of individuals who have made great leaps in their careers or pivoted to entrepreneurship in their 40s and 50s.

While Gen X is currently seeing its early years of earning, the best may be yet to come. Julia Child, for example, wrote her first cookbook, Mastering the Art of French Cooking, at the age of 49, after years in an advertising career. Viola Davis spent decades working as a performer before her career skyrocketed in her early forties, when she starred in Doubt and was nominated for an Academy Award for her role.

2. Retirement: Turbocharge savings

Don’t kill the messenger, but some investment firms suggest saving nearly three times your annual salary in a retirement account by 40. By age 50, that recommended factor jumps to five. This may sound like an outrageous amount to make, but it is fair to say that the burden of saving for retirement falls squarely on the individual these days. With pensions extinct (for the most part) and the uncertainty surrounding Social Security’s fate, saving our future has never been more important.

If you have access to a workplace retirement account like a 401(k) and turn 50, know that you can do some catch-up by contributing an additional $6,500 this year. IRA savers age 50 or older can invest an additional $1,000.

Finally, this might be a good time to rethink your retirement age. If you had to work part-time or full-time during your 60s through 70s, what would be your ideal role? Some early strategic planning is not a bad thing.

3. Debt: Don’t worry about paying off your mortgage

The idea of ​​retiring without a mortgage sounds convenient, but in reality, it may mean making additional payments each year to get there. Is it worth it? If you have many financial goals vying for your attention now—from saving for retirement to getting a child to college or supporting an elderly parent—now you don’t have to worry about paying off your mortgage (which will likely carry a low interest rate). Focus on financial moves that will produce a higher rate of return such as an investment, or movements of a more immediate nature.

4. Family finances: break the money talk with your parents

It can be difficult to talk about money with our parents, but it can be beneficial to both parties.

When she joined me on my podcast, Cameron Huddleston, author of Mom and Dad We Need to Talk, opened up about her mom’s battle with Alzheimer’s and how she wished she’d discussed money with her mom before the diagnosis. “When I saw that she was having trouble with her memory, all of a sudden, the conversation type was no longer the what-if type. It was, ‘Oh, my God.'” this happens. what shall we do? That’s why people need to have these conversations sooner rather than later…so they can talk about hypothetical situations. Not: “We’re in the midst of this right now.” It’s an emergency. Emotions are growing. How do we deal with this?”

A wise way to start the conversation, Huddleston says, is to use a personal story of someone you know who has had a hard time because they haven’t talked about money with a parent. At this point in life, “you should know someone who is already starting to deal with problems,” she says.

Huddleston suggests that the most important details to review are whether they have a living will or trust, whether your parents have appointed a power of attorney, or someone who can step in to make financial decisions if they are unable to do so.

5. College Kids: You’re not a bad parent if you don’t pay for it

Really, you are not. If your child is in college and you haven’t Save for these expensesDo what you can. But also remember that there is a lot students can do on their own to lighten the cost burden. Sacrificing your retirement or withdrawing emergency savings, despite the temptation, may come back to haunt you—and your adult child—if you have trouble replenishing that money in the future.

An important part of college planning is to discuss all affordable pathways with your child — and there are many of them, such as scholarships and merit, work-study programs, attending a local community college first, working part-time to afford college credits, or considering a career where Student loan forgiveness is a possible option. And remember that college may not be the ideal path for everyone. Vocational schools, coding boot camps and apprenticeships are all viable alternatives these days.

If your child is still far from college, consider this: Open 529 college savings accounts where your money can accumulate, and depending on your state, you can get a tax break.

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