Gen X women, those born between 1965 and 1980, have made substantial contributions to the workforce and are now in their prime earning years. However, they face unique financial challenges as they balance supporting children, caring for aging parents, and navigating personal transitions like “gray divorces.” This article explores how Gen X women can effectively manage these financial strains and secure their futures.
The Evolving Workforce and Financial Inequities
The Enjoli perfume commercial from 1980 famously proclaimed that women could “bring home the bacon, fry it up in a pan, and never let you forget you’re a man.” This mantra of having it all inspired many Gen X women to pursue both professional careers and fulfilling home lives. However, the reality has been more complex. While women entered the workforce in significant numbers, this did not translate into financial equity. The persistent pay gap has grown into a wealth gap, impacting how Gen X women save and accumulate wealth for their financial goals, particularly as they approach retirement.
Corporate America’s shift from pensions to 401(k) plans placed the burden of retirement savings on employees. As a result, many Gen Xers are finding themselves underprepared for retirement. Concerns about insufficient savings are exacerbated by uncertainties surrounding social security benefits, leading Gen X women to seek strategies for financial security in their 60s and beyond.
Strategies for Securing Financial Futures
- Assessing Your Current Financial Situation
The first step towards financial security is a thorough assessment of your current financial status. This includes reviewing assets, savings, investments, and retirement accounts. By understanding your financial position, you can determine whether you are on track to meet your savings and investment goals.
- Calculating Retirement Savings Needs
Using a retirement calculator, such as the one available from Vanguard, can help estimate how much you will need to retire comfortably. This calculation should account for inflation, healthcare costs, and potential longevity. Experts suggest that Gen X women should aim for $1.5–$3 million in savings to maintain their desired lifestyle in retirement.
- Maximizing Retirement Contributions
The Secure Act 2.0 allows individuals aged 50 and older to contribute up to $30,500 annually to retirement accounts, including a $7,500 catch-up provision. Many Gen X women are taking advantage of this opportunity to boost their retirement savings. Dr. Paula Anderson, President and CEO of Pace Consulting, emphasizes the importance of these contributions, noting that many are “throwing money into retirement to make up for lost time.”
- Consulting with Financial Advisors
Seeking professional advice can provide valuable guidance. A financial planner can help create a personalized plan, steering you away from costly mistakes and ensuring your investment decisions are sound. Renee Collins, a certified financial planner and founder of Retire Ready, Inc., advises Gen X women to recognize that they are in control of their financial destinies, especially regarding retirement planning.
Planning for a Long and Prosperous Future
As life spans increase, often extending to 100 years, it is essential to plan for a longer retirement. Many Gen X women are exploring tax strategies and estate planning to stretch their savings. Additionally, some are considering second-act careers or businesses, turning their passions into income-generating opportunities.
The financial landscape has seen Gen X women navigate numerous challenges, from economic recessions to technological advancements. They have also been catalysts for social changes, advocating for workplace accommodations like private pumping spaces for breastfeeding mothers and flexible work schedules.
Embracing Financial Control
Despite the unpredictability of the future, Gen X women have the opportunity to define their financial paths. By assessing their current financial situations, calculating retirement needs, maximizing contributions, and consulting with financial advisors, they can take control of their financial futures. As Renee Collins aptly puts it, “Recognize that you are in control of your destiny, especially when it comes to your retirement.”
In summary, the next phase of life for Gen X women will be shaped by the financial decisions they make today. With strategic planning and informed choices, they can ensure their best financial years are yet to come.
