Retirement planning isn’t just for those in their 50s and 60s. Regardless of your age from Baby Boomers to Generation Z who are just turning 18, everyone should take steps to make their retirement better.
What should Baby Boomers be doing for retirement?
First and foremost is determining the cost of healthcare in retirement and developing a pre-retirement budget to be certain they can live the life they want off their retirement earnings. The longer expected life span and the increasing cost of medical care can really decrease the amount of monthly money remaining.
What are key steps for Gen Xers to be taking now?
Maximizing retirement contributions which means hitting the maximums for 401k or other retirement plan contributions, and for the older Gen Xers this includes the catchup contribution amounts for people over 50. A second step is to start saving outside of retirement plans and building their health savings accounts to use in retirement.
Are there any mistakes for Gen Xers to avoid?
Many Gen Xers have kids in their college years. Sacrificing their retirement savings to fund education costs is a very big mistake. Another mistake is continuing to increase expenses as their income increases. A better habit is to hold the line on expenses and try to start saving all of their raises towards retirement savings.
Do you have advice for the Gen Y generation?
For the older Gen Y, those in their 30’s, it is really important that they are maxing out retirement contributions. The second important step is to start using a budget to make important financial decisions. Finally, working to lower non-mortgage debt can be very beneficial to funding retirement savings.
What about the younger Gen Yers, those in their 20s?
It starts with enrolling in your company’s 401k or other retirement plan and trying to at least get to the company match amount. This can be difficult with student loan debt but working to keep other expenses such as housing or transportation lower can provide the funds needed to make this a possibility.
Does generation Z need to be thinking about retirement yet?
Surprisingly some of the choices this generation is making right now can impact their ability to save for retirement. The biggest is their choice of college and how much student loan debt they will accumulate to fund their college choice. Avoiding as much student loan debt will make it easier to start their retirement savings as soon as they start working.