Generation X Members Have Retirement Work Cut Out For Them
Published Sunday, July 21, 2013 at: 7:00 AM EDT
According to a new study by the Pew Charitable Trusts, Generation X—the name given to those currently in their late 30s to late 40s—may be less prepared for retirement than the “Baby Boomers” now entering their golden years.
The report says Gen Xers suffered losses of 45% of median net worth between 2007 and 2010, a worse setback than for those born during the 20 years after World War II. Based on the report’s projections, typical Gen X members are on track to replace half of their pre-retirement income if they stop working at 65. But Baby Boomers born between 1946 and 1955 are poised to replace 82% of income, while those born at the tail end of the boom, between 1956 and 1965, are ready to replace 59%.
As a result, Gen Xers might have to take other steps, such as increasing savings and borrowing less, to help maintain a comfortable retirement.
A few other factors also are working against Generation X. This group bears the full brunt of the gradual change in the age for receiving full Social Security retirement benefits from age 65 to 67. Also, life expectancies are rising, so assets might have to last longer. And many Gen Xers will be relying on 401(k) plans, which generally don’t provide as much retirement income as traditional pension plans have done.
But don’t despair: You still have plenty of time to make up for lost ground. It will just require extra dedication.
This article was written by a professional financial journalist for Preferred NY Financial Group,LLC and is not intended as legal or investment advice.
An individual retirement account (IRA) allows individuals to direct pretax incom, up to specific annual limits, toward retirements that can grow tax-deferred (no capital gains or dividend income is taxed). Individual taxpayers are allowed to contribute 100% of compensation up to a specified maximum dollar amount to their Tranditional IRA. Contributions to the Tranditional IRA may be tax-deductible depending on the taxpayer's income, tax-filling status and other factors. Taxed must be paid upon withdrawal of any deducted contributions plus earnings and on the earnings from your non-deducted contributions. Prior to age 59%, distributions may be taken for certain reasons without incurring a 10 percent penalty on earnings. None of the information in this document should be considered tax or legal advice. Please consult with your legal or tax advisor for more information concerning your individual situation.
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