Gen X: Hone Your Financial Skills

Baby Boomer parents have amassed significant wealth as a generation, but their Gen X children are not following in their footsteps. According to a recent National Institute on Retirement Security report, Gen Xers, born from 1965 through 1980, generally aren’t following a retirement strategy, saving enough for the future, or accounting for long-term healthcare and assisted living expenses.

Contributing Factors

Heavy student loan debt and the loss of employer-provided pensions are significant reasons why Gen Xers are having difficulty saving for retirement. Defined contribution plans, such as 401(k) plans and individual retirement accounts, depend primarily on employees’ willingness to participate and accept the responsibility for their retirement savings.

Changing It Up

With help from a financial professional, Gen Xers can acquire the financial skills needed to start saving enough for retirement. Creating a budget with automatic savings can put you on the right track. By assessing where you currently stand financially, you can determine strategies for increasing your retirement coffers, such as retiring later than you planned and postponing taking Social Security benefits until age 70.

Will You Inherit Wealth?

If you’re unfamiliar with your parents’ estate plans, it’s time to talk to them about their finances and wealth transfer plans and prepare for any inheritance you may eventually receive. Know your parents' assets, including retirement accounts, investment portfolios, real estate and life insurance. Ask for a list of their debts, such as mortgages, credit cards, and loans. Know who their tax and financial professionals are, too.

The Bottom Line

Gen Xers who make strides in preparing for their own retirement can gain the financial knowledge they’ll need to handle the transfer of wealth from parent to child responsibly. An estate attorney can set you on the right path.