How Generation-X Can Get The Best Retirement Planning Advice

The youngest members of Generation-X are now in their 40s, while the oldest Gen-Xers are now in their late 50s. This means it is time for Gen-X to get serious about retirement planning. Are you saving enough for retirement? Are you on track for financial freedom? Sadly, many members of Gen-X will answer no to both of these questions.

As a younger Gen-Xer, I enjoy watching my friends enter their peak earning years. For some, this will be an opportunity to get ahead financially. Others may take this opportunity to supercharge their lifestyle inflation. We are just old enough to earn some serious money, yet too young (in many cases) to see our Baby Boomer parents run into financial troubles in their retirement years. Now is the time for Gen-X to get moving on developing a plan to achieve financial freedom.

What can Gen-X do now to get the best financial freedom and retirement-planning advice? Could a great financial advisor help you avoid costly investing mistakes?

Will Generation-X Need To Work Forever?

I’m confident many people reading this article are well on their way to accumulating enough wealth to fund their dream retirement. There are also likely a larger number of people reading this post who have little to nothing saved for what could easily be a 30- to 40-year retirement.

Many in Gen-X are too successful not to plan for a great retirement but still need to accumulate enough to meet the top financial advisors’ asset minimums. Some prominent financial firm advisors you see in advertisements don’t get paid on accounts under $250,000. Others have minimums of $500,000, $1 million, or more significant amounts of investable assets. Sadly, just 40% of Generation-X works with a financial advisor. Over the years, I’ve spoken with many people afraid to seek professional retirement-planning guidance after seeing how their parents were sold bad annuities and Whole Life Insurance. Generation-X deserves better guidance and advice to help them achieve the retirements they have worked hard for.

Related: How Anyone In Gen-X Can Become A 401(k) Millionaire

Gen-X Can Retire On Just Social Security, Right?

If your home is paid off, you are coupled (getting two Social Security checks), and you live exceptionally frugally, you may be able to live on Social Security alone. If even one of these scenarios doesn’t apply to you, retiring on Social Security alone will be a considerable struggle unless you have some other income or way of reducing your cost of living.

Have you heard that Social Security is reportedly on track to being depleted by 2034 (or earlier)? I’ll save you checking your calendar; 2034 is before many of the younger Gen-Xers will have reached full retirement age (around 67). This means Social Security is expected to go broke before they even reach full retirement age. At this point, Social Security would only be expected to be able to pay out 76% of promised benefits.

Take a few minutes and get an estimate of your future Social Security benefits. In 2023, the average Social Security check is just $1,701.62. Would this cover your rent or mortgage, let alone living expenses? It wouldn’t even cover a less-desirable apartment in West Hollywood. The bottom line is that very few people would love the retirement that living on Social Security alone would provide. Your financial security will be reduced even further if Congress doesn’t act to prevent Social Security from becoming insolvent and reducing benefits.

How Can Gen-Xers Reach Their Retirement Goals?

Take a few minutes and think about when you would like to retire. I know some people are saving today while others love what they do and may plan to work forever. If you are in the latter category, at least plan to achieve financial freedom, so work becomes an option. I’m realistic. I’m passionate about personal finance and love being a financial planner. While I plan to work forever, assuming I also live forever (just kidding), I want to have the choice to make work an option.

Just so you know, the full retirement age for those in Gen-X is likely 67, plus a few extra months, depending on when you were born. If you are still determining when to retire, use this as a benchmark.

What can you do today to increase your chances of reaching your retirement goals?

If you aren’t doing so already, consider working with a fiduciary financial planner to supercharge your progress toward a secure retirement. Generation-X is the first generation to retire almost exclusively on 401(k) assets, with little to no help from pensions. The bull market over the past decade-plus may have you thinking you can easily do this all on your own. As we saw in 2022, investing in the stock market can be challenging.

While a financial planner can be viewed as a cost, in my humble opinion, I think good financial guidance is worth every penny. Vanguard estimates the value of even basic financial guidance at around 3.75%. Imagine how valuable great financial advice could be. This is just for average advice. Quite a few people traded their way to devastating losses over the past few years. A financial advisor can help you avoid making these (and other) costly mistakes.

Hopefully, we will live longer than our parents and grandparents. That means our retirement incomes will need to last exponentially longer. Guidance for setting a vision for your ideal retirement and retirement tax planning to reduce your lifetime tax bill is also quite valuable. Avoiding significant financial mistakes when times get rough can be the difference between fabulous retirement golden years and having to work because you have no other choice.

What Type Of Financial Advisor Should Gen-X Work With?

When looking for the best financial advice, you must know that not all financial advisors are created equal. Some will help with investments or sell products like insurance, annuities, and mutual funds. Some work as comprehensive financial planners whose primary purpose is to help you plan and reach your personal finance goals. Others will specialize in tax planning, which can help you reach your financial goals faster and easier. Some work on the fiduciary standard all of the time. Others work as fiduciaries some of the time. Others never work on the fiduciary standard and are just glamorized salespeople, hawking products rather than providing conflict-free financial planning advice.

Before working with a financial advisor, consider the areas you need help with. The financial advisor specializing in exit planning probably won’t be the best person to help you develop a plan to deal with your student loans. Search for a relationship that you, as an investor, want to have with a financial planner or financial advisor. Some of you are okay with a more one-off checkup type of arrangement. Others may need an ongoing accountability partner who helps them stay on track for important life goals.

If you choose an ongoing advisor-based relationship, it is important to understand financial professionals’ credentials. Are they a Certified Financial Planner? Do they work as a fiduciary? Are they independent, or do they work for a big company? Alternatively, do they work for a firm and sell only those firms’ products? Are they experts in the areas of advice that are the most important to you and your family? Do they work with other people like you? How will you pay the advisor you choose?

There is never a better day than today (other than yesterday) to get your financial house in order and start moving toward your most important financial goals. The earlier you get started, the easier it will be to reach your financial goals. Working with a great financial advisor can help you make this process less stressful and time-consuming.