Retiring when you want: How Gen Xers can get back on track
Building up your retirement fund can be easier than you might think.
Many Generation X investors — those born between 1965 and 1980 — lack confidence in their ability to save for retirement. Some 9 percent of workers between ages 35 and 44 think they'll never be able to retire, up from 6 percent a decade ago. And more than half of workers in that age range have saved less than $10,000 for retirement.
The good news: Most Gen Xers still have two decades or more before retirement, so it's not too late for them to get on track. If you're among them, here's what you can do:
Develop a savings and investing plan you can stick with.
First, it's important to consider your goals and what your expenses may be in retirement. Here's something to keep in mind: in a recent survey, the median response among financial professionals indicated that individuals need to save approximately 15 percent of their pay, including employer contributions (if applicable), to have enough income during retirement, assuming they begin saving for retirement early in their career.* A financial professional can help you develop a plan for retirement.
Get perspective on market performance.
Stocks historically go through long cycles, notes Glen Young, director of retirement planning at Ashton Young Financial Services in Troy, Mich. "We had a bear market from 1966 to 1981," he says, "followed by a bull market from 1982 to 2000." Investors need to consider riding out extended stretches of flat or even negative returns to reap stocks' long-term growth potential.
Invest regularly for retirement.
Automatically contribute a set amount to retirement accounts each month. You'll get used to living without the money, and it can help you build some of the nest egg you need.
Are you saving enough for retirement?
- http://www.ebri.org/pdf/surveys/rcs/2012/fs-04-rcs-12-fs4-age.pdf (figure 6), 2012 Retirement Confidence Survey, Employee Benefit Research Institute and Mathew Greenwald & Associates.
- http://www.ebri.org/pdf/surveys/rcs/2012/fs-04-rcs-12-fs4-age.pdf (figure 3), 2012 Retirement Confidence Survey, Employee Benefit Research Institute and Mathew Greenwald & Associates.
* America Rebuilds Research with Financial Advisors, June 2011, conducted by Harris Interactive on behalf of the Principal Financial Group®. When looking at all responses in the survey, the median is the middle of the responses given.
Glen Young and Ashton Young Financial Services are not affiliated with the Principal Financial Group or any of its member companies.
Dollar cost averaging involves continuous investing. Investors need to consider their ability and willingness to continue investing through periods of low price levels. This does not assure a profit nor protect against loss in declining markets.
Insurance products and plan administrative services are provided by Principal Life Insurance Company. Securities are offered through Princor Financial Services Corporation, 1-800-547-7754, Member SIPC and/or independent broker dealers. Securities sold by a Princor® Registered Representative are offered through Princor. Princor and Principal Life are members of the Principal Financial Group® (The Principal®), Des Moines, IA 50392.
While this communication may be used to promote or market a transaction or an idea that is discussed in the publication, it is intended to provide general information about the subject matter covered and is provided with the understanding that none of the member companies of The Principal are rendering legal, accounting or tax advice. It is not a marketed opinion and may not be used to avoid penalties under the Internal Revenue Code. You should consult with appropriate counsel or other advisors on all matters pertaining to legal, tax, or accounting obligations and requirements.