Top money advice for Gen Xers in a fragile economy

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Caught between millennials and baby boomers, Gen Xers (of whom I consider myself a proud member) have been somewhat overlooked when it comes to financial advice. And you probably feel downright ignored as a person of color within that demographic. If you were born between the mid-1960s and 1980s, it is often assumed that you have a lot of savingsa robust retirement plan and no financial puzzles or debts.

Well not really. We also struggle at critical times.

For one thing, Gen Xers have managed to keep their financial heads above water more than older and younger generations. Gen Xers were particularly hard hit during the Great Recession, but were the only generation of households to recoup the wealth they lost between 2007 and 2010, and many were lucky enough to keep their assets and move on. to work, according to Pew Research,

Our generation also paid less for college than Millennials (born 1981-1996) and Gen Z (born 1997-2012). In 1995, the average annual cost to attend a four-year institution was just over $10,000, compared to $28,000 today. And chances are we didn’t go into a deep recession after graduating.

Still, the journey has been anything but linear or painless for Gen X. While we don’t need as much guidance on consolidate our student loansget married or divorced, raise children or care for aging parents, we could use personalized financial advice and original strategies, especially in today’s economy.

“We are really at the point in our careers and our lives where everything is happening, whether it’s in our jobs, in our relationships… I don’t want to be depressing but… it’s a lot,” said the editor Margit Detweiler. Detweiler is the founder of TueNight.com, a storytelling platform for, as she describes it, “adult female Gen Xers.”

Financial advice for my fellow Gen Xers could cover several books, but let’s start with these five steps.

1. Career: don’t give up, even when it’s hard

For now, the labor market is still considered “hot” with unemployment at 3.6%, close to its pre-pandemic low. But recently, as worries about a possible recession escalate, we’ve seen more job cuts and hiring freezes. So far, most of layoffs are primarily in industries that saw growth at the onset of the COVID-19 shutdowns and are now facing declining consumer demand.

If you lose your job in your 50s, it may seem impossible to find a job. But don’t give up. Consider expanding your job search to other types of businesses. For example, there is currently a higher rate of job vacancies in hospitality, catering, education, healthcare, and wholesale and retail trade, according to a June report from the Chamber of Commerce. American.

And if you’ve been climbing in your career for a decade or two but are hitting a plateau, be inspired by the many examples of people who took big leaps in their careers or pivoted into entrepreneurship later in the day. life. Julia Child, for example, wrote her first cookbook, Mastering the Art of French Cooking, at age 49, after years in advertising. Viola Davis spent decades working as a performer before her career took off in her early 40s when she starred in the film Doubt and was nominated for an Oscar for her role.

2. Retirement: Boost your savings

Don’t kill the messenger, but some investment firms suggest having about three times your annual salary saved in a retirement account by 40 years. At age 50, this recommended factor increases to five. This may seem like an exorbitant sum to achieve, but it’s fair to say that the burden of save for retirement is squarely on the individual these days. With pensions (for the most part) dying out and the fate of Social Security hanging in the balance, saving for our future has never been more critical.

If you have access to a workplace retirement account like a 401(k) and have reached age 50, know that you can catch up by contributing an extra $6,500 this year. IRA savers age 50 and older can invest an additional $1,000.

We are currently in a bear market, or a prolonged period of downward price trend in the stock market. If you are nearing retirement – ​​or in the early stages of retirement – ​​and your portfolio has taken a severe beating in recent months, it may be worth reviewing your level of equity exposure with the help of a professional. finance. If recent market volatility is causing you anxiety, it could mean you have a lower appetite for risk and need to reassess.

Now may also be a good time to rethink your retirement age. If you were to work part-time or full-time throughout your 60s and into your 70s, what would your ideal role be? Early strategic planning is never a bad thing.

3. Debt: Don’t worry about paying off your mortgage

The thought of retiring mortgage-free sounds like a relief, but in reality, it may mean making extra payments each year to make it happen. Is it worth it? If you have many financial goals competing for your attention right now — whether it’s saving for retirement, sending a child to college, or supporting an aging parent — then don’t bother. don’t worry about paying off your mortgage just yet.

If you took out a mortgage before 2022, your fixed rate is probably very low and it’s probably not worth rushing to pay off your mortgage, especially with an impending recession. During an economic downturn, it’s best to put that money in a savings account when you need more cash or focus on financial moves that will yield a higher rate of return, like investing.

4. Family finances: discuss money with your parents

Although talking about money with our parents can be awkward, it can be beneficial for both parties. During tough economic times, parents can be a resource as they have been through many economic cycles and can offer some perspective.

The other more important details can be… more delicate. But it is important to discuss whether your parents have a living will or trust, and whether they have appointed a power of attorney (someone who can step in to make financial decisions if they are unable to do so) .

Cameron Huddleston, author of Mom and Dad, We Need to Talk, joined me on my podcast and discussed her mother’s battle with Alzheimer’s disease. Huddleston wishes he had discussed money with his mother before the diagnosis. “When I saw she was having memory issues, all of a sudden it wasn’t a hypothetical type conversation anymore. It was like, ‘Oh my God. It’s happening. It’s happening. ‘is why people need to have these conversations as soon as possible…so they can talk about what-if situations with this?'”

A wise way to start the conversation, Huddleston said, is to use a personal story from someone you know who went through a tough time because they didn’t talk about money with a parent. At this point in life, “you’re bound to know someone who’s already started dealing with issues.”

5. College for kids: You’re not a bad parent if you can’t afford it

Really, you are not. If your child is college bound and you do not have saved for this expense, Do what you can. But also remember that students can do a lot on their own to ease the cost burden. Sacrificing your own retirement or withdrawing emergency savings, while tempting, can come back to haunt you — and your adult child — if you struggle to replenish those funds down the road.

An essential part of planning for college is discussing all affordable pathways with your child – and there are many, such as merit-based scholarships and grants, work-study programs, attending a local community college in first, part-time work to pay for college credits or consider a career where student loan forgiveness is a potential option. And remember that college may not be the ideal path for everyone. Vocational school, coding bootcamps, and apprenticeships are all valid alternatives these days.

Also consider the following: Open a 529 college savings account where your money can accumulate and, depending on your state, you may qualify for tax relief. If your child is still a long way from college and it’s hard to save these days, don’t worry.

About Jason Norton

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