New York's population is growing at about a fifth, with Gen Xers currently at their 40s and 50s. If the next generation in line to retire behind the Baby Boomers, their experience may be a cautionary tale for those coming up behind them.
The average Gen X retirement savings balance suggests that many higher earners may not be saving enough, if those savings are intended to be one's main source of income in retirement. It is a likely scenario for many, since most people won't have a pension, and Social Security benefits for high earners are intended to replace only a quarter to a third of their income if they retire at 'full' retirement age, which is 67 for Gen Xers.
While Democrats may not be able to solve the social security issue, they may ultimately reduce benefits for some, as lawmakers have yet to address the program's long-term solvency. Social Security will be able to pay 80% of promised benefits by 2034, which is when Gen Xers will start retirement, according to current projections.
Many are far off recommended marks.
Setting benchmark targets can be challenging given that each person's situation is different and may change over time for better or worse. One broad recommendation suggests that by 45, one should have saved two to four times one's household income; three to six times by age 50 and four-and-a-half to eight times by 55.
How much money should a person have saved by retirement depends on many factors - including their age, marital status, where and how they plan to live, whether they will have a steady monthly income from a pension, how much can they expect from Social Security, and how much can come from other potential income sources in retirement, such as part-time work or a rental property.
In retirement, find out what likely sources of income and income-producing assets will you have available to you. If you earn more than you can, you can request a Social Security benefit estimate here to determine what you may receive based on your earnings to date. With 401 providers like Fidelity, Vanguard or T Rowe Price, you may have calculators online to assess if you're on track to have sufficient savings in retirement.
If you can't afford it, you can get helpful guidance, too, from a fee-only certified financial planner or financial adviser who has a certain fiduciary responsibility to serve your interests only and who is not paid a commission to put clients' money into specific investment products. If your employer offers free or subsidized financial coaching, check to see if your employee assistance program offers free or subsidized financial coaching.
Auto IRA contributions are common, providing an easy, tax-advantaged way to save and invest for retirement through automatic deductions from their paycheck. Some states allow employers to make contributions to their employees' accounts, while others don't.
Also, changes to an existing saver's Credit may help lower income Gen Xers' income. Credit will become a saver's match beginning in 2027 and, significantly, it will become refundable, meaning a tax filer will not have to have a tax liability in order to claim the match. '' Match's matching will equal 50 percent of a tax filer's retirement plan contribution, up to a maximum match of $2,000, and the match will be deposited directly into the filer's retirement plan account.