Tips for Every Generation Planning for the Future

Blog Category: Finance

Everyone thinks about their future at some point, and wherever you are in life might impact how you want to save for it. For some, retirement is just around the corner, and for others, that point in life is miles away. If you haven’t started planning for the future or want to look into better ways to save for retirement based on your generation, here are some tips to get you started.

Baby Boomer Generation (born 1946-1964)

Due to retirement and traditional pension plans changing, Baby Boomers were already well in their thirties when they started saving for the future. Most of this generation have 401(k)s or similar plans, contribute roughly 10% of their pay before taxes, and have about $290,000 accrued for retirement and $25,000 for emergency savings.

Generation X (born 1965-1980)

401(k)s were just becoming available in the 1980s and 1990s, making the average age for Gen X to start saving for retirement thirty. Like the Baby Boomers, most Gen Xers have 401(k)s or similar plans and contribute about 10% of their pay before taxes, but have about $80,000 accrued for retirement and $5,000 for emergency savings.

Millennial Generation (born 1981-1996)

Due to student debt and a conflicted economy during their early working years, Millennials didn’t start saving for retirement until their mid-twenties. Most Millennials have 401(k)s or similar plans, contribute about 10% of their pay before taxes, and have about $50,000 saved for retirement and $3,500 for emergency savings.

Generation Z (born 1997-2012)

While a great portion of this generation hasn’t had their first job yet, more than half of Gen Zers started saving for retirement before they reached twenty. They contribute about 20% of their pay before taxes and have up to $30,000 saved for retirement and nearly $1,000 for emergency savings.

If you are in this generation, we know that spending your money on current needs is of greater importance. However, we strongly encourage you to put just enough money into your 401(k) to at least get the full employer match so you can have something going when things turn out better.

The Bottom Line

Everyone deserves a secure, enjoyable retirement, and there’s no shame in starting your journey now. Wherever you are today, you can start with this list of things to do:

  1. Review your current debt, expenses, finances, income, loans, retirement accounts, and spending. This includes financial areas where you’re supporting more than yourself, like taking care of a loved one, paying for an education, and providing for your kids.
  2. Speak with a financial advisor to strategize and build your financial portfolio and estimate how it will last. With their expertise, you can learn any problems or options you have available so you can make better decisions going forward. This could be helping you reevaluate where you want your savings to accrue, consider tax-savings opportunities and tax-efficient withdrawal plans, diversify your investments, or decide what to do with your business when you retire.
  3. Create a debt-repayment plan to get past the high interest rates holding you back from saving and living debt-free during retirement.
  4. Consider your health care needs, long-term care planning, and health insurance options available during retirement.
  5. Examine and estimate your retirement income from investments, retirement savings, Social Security, and other sources like assets and real estate you plan to sell.
  6. Consider when and if you plan to fully retire. Perhaps you want to make and grow more money, so you’ll retire later than planned, or maybe you know you’ll want something regular to do, so you’ll switch to part-time or consulting work during retirement. It all depends on how you envision spending your retirement and your comfort level with the money you’re putting towards it.
  7. Invest as much money as you can in your retirement accounts and take advantage of an employer match if it’s offered.
  8. Decide where you want to live when you retire and what the finances would look like for that plan.

Ready to turn your finances around and plan for the future? Check out our free ebook, 6 Money Planning Tips For Your Senior Living!

At Life Enriching Communities (LEC), we’re committed to ensuring patrons feel well-equipped to plan their future and age how they wish. Explore more resources on senior living or contact us today to learn more about our legacy of services and programs that bring meaning and purpose to every stage of life.