Tuesday, May 20, 2008 the USA Today had an article "Generation X struggles to build a nest egg". Generation X is defined as a person born from 1968 through 1980 who would currently be 27 to 43 years old. Bryan Short is featured in the article. He is a 30 years old attorney living in the Washington, D.C. area who graduated from Boston College and law school at the College of William and Mary.
You would think that an attorney would be doing well financially and would be able to save for retirement. The article paints a different picture because of the repayment of college and law school debt.
GenXers have a looming retirement problem because of 3 issues: fewer and fewer companies are offering a defined pension, the growth in social security benefits is not keeping up with inflation, and excessive debt preventing saving for retirement. This perfect storm looks like this: companies are no longer giving a guaranteed pension, the government program is losing ground, so they need to start saving for retirement now but are not able to afford it. No guarantees for a retirement and not able to save for retirement. OUCH!!!
The good news is that about 80% of GenXers have access to some kind of retirement saving plan at work. The bad news is that only 60% of GenXers actually contribute to a retirement plan at work. 40% either do not have access to a retirement plan at work or do not contribute to a retirement plan.
This means that 40% are not planning for retirement and will be less prepared, and more dependent on social security benefits. Given the bad news on the future solvency of the social security program this leaves a GenXer in a precarious position.
What should you do if you are a GenXer? Get some professional retirement planning help now.
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