11 Things Gen X Needs To Consider About Retirement Before It’s Too Late

Gen Xers, who are approximately ages 44 to 59, are in varying stages of retirement planning . The younger ones are deep in their earning years, while those on the older end have retirement in their sights.

While Gen X is the generation known for its independence, resilience and resourcefulness, according to Hillary Seiler, CFP, coach and founder of Financial Footwork , they are not all prepared for their golden years.

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Seiler and other experts explain the key financial steps Gen Xers need to take for their retirement before it’s too late .

Money mistakes the super wealthy never make - that you might be doing now.

Set Retirement Goals

It’s important not to let retirement surprise you — set goals and be prepared to adjust them accordingly, Seiler said.

“Life changes, circumstances change, and you need to be prepared with a retirement plan that evolves accordingly. Set financial goals for yourself, and hold yourself to them,” she explained. “By setting attainable checkpoints and revisiting them regularly, you can stay on track and make the necessary adjustments to ensure a stable financial future.”

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Follow the Rule of 72

Seiler recommended the “Rule of 72” for retirement investments. “The sooner you begin prioritizing your savings’ growth, the more you benefit from compound interest,” she said.

By dividing 72 by your expected rate of return, you can estimate the number of years it will take for your investment to double, she explained.

“Consider it like this: If your investments grow annually at a rate of 6%, your overall money will double in roughly 12 years. Even this simple visualization makes your retirement look that much more attainable,” Seiler said.

Get Your Employer Matching

If you are a W-2 employee working for a company, chances are you’ve been offered a reliable retirement plan, Seiler said, and that means you’ve got the chance to earn an employer match.

“These plans effectively give you free money straight to your retirement fund. It’s an integral part of your compensation package, and sees your employer match whatever amount of money you deposit into your 401(k), or similar plan, and deposit the same sum. Basically, by not taking full advantage of this program, you’re leaving money on the table — and just out of your reach,” she said.

Assess Your Time Horizon

Gen Xers are at varying stages in their careers, which means they need to take a realistic look at their time horizon when considering their investments, according to Chad Gammon, a financial advisor and coach with Custom Fit Financial .

“Those with 10 to 20 years until retirement might have a longer time horizon, allowing them to take on moderate risk to capitalize on market growth,” he said.

“Conversely, those closer to retirement should prioritize preserving capital,” he explained. Older Gen Xers need to be cautious in how they spend, starting to live on less to get used to retirement years.

Avoid Overconcentration

It’s important to avoid overconcentration in any single asset class, sector or investment, Gammon said. This includes company stock or high-risk investments, like cryptocurrencies, which could lead to significant losses.

It might be time to seek the advice of a financial advisor if you haven’t already.

Keep Up With Inflation Risk

While minimizing market risk is important, Gen Xers should also be aware of inflation risk, according to Gammon. This means you want your investments to outpace the rate of inflation.

“A portfolio too heavily weighted in low-yield bonds or cash may not keep up with inflation, eroding purchasing power over time. Incorporating assets that have historically outpaced inflation, like stocks, can help mitigate this risk,” he said.

Sequence of Returns Risk

As retirement approaches, the order in which investment returns occur can significantly impact a portfolio as well, Gammon pointed out.

“Gen Xers should consider strategies like gradually shifting to safer investments or implementing a ‘bucket’ approach (separating short-term needs from long-term growth) to manage this risk,” he said.

Again, this is a great time to talk to a financial advisor if you’re not entirely sure which savings and investment vehicles are best for certain goals.

Assess Your Savings

There are many ways to save for retirement, according to Chris Urban, CFP, retirement planner and founder of Discovery Wealth Planning . He urged Gen Xers to take a close look at how much they’re saving across all kinds of accounts — retirement accounts, health savings accounts, high-yield savings accounts and so on.

Don’t put it off to the last minute only to find out you don’t have enough.

Make Home Equity Work For You

For Gen Xers who own a home or property, it’s good to consider their home equity as well, Urban said. People with a mortgage may be thinking of paying it off and potentially investing the money that frees up or thinking about the costs that can reduce.

If you’re paying a very high mortgage interest rate, you might want to get out from under that mortgage as quickly as possible through selling or refinancing.

“If you plan to move, probably don’t pay off that mortgage,” Urban said. “You don’t want to just throw everything into your house, but just that’s kind of a big asset and could be a needle mover there depending on what your home situation is.”

Taxable Brokerage Accounts

While it’s important to have a variety of tax-advantaged accounts — such as those that you can put pretax dollars into, like 401(k)s, and those that tax you only after you withdraw, like IRAs — Urban also recommended having a taxable brokerage account, which can keep funds liquid but earning interest.

“Just having that tax diversification is going to be beneficial when it comes to thinking about retirement and giving you the flexibility to withdraw money from the accounts that have different tax treatment,” he said.

Stay the Course

Rather than responding to market ups and downs or other anxiety provoking events, like election years, Urban said that Gen Xers should create an investment approach and a strategy for their retirement accounts that align with short-, medium- and long-term goals and stay the course as much as possible.

For example, one account may need to keep funds liquid for something like buying a home, while some funds could be locked into a higher-interest certificate of deposit or in longer-term investment accounts.

“You should have a plan and stick with it. Don’t let the noise of the events that are going on impact your investment strategy because if you do, you’re just basically gambling,” Urban said.

Gen Xers who are closer to retirement should make sure they don’t get surprised by a lack of planning, while younger Gen Xers have a bit more lead time to take these steps.

This article originally appeared on GOBankingRates.com : 11 Things Gen X Needs To Consider About Retirement Before It’s Too Late