Financial Mistakes of Gen Xers

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Gen Xers are ruggedly independent and rarely seek attention. Overshadowed by their Millennial or Gen Z children, many are willing to sacrifice retirement in order to reduce or eliminate the school debt their children incur.

Commendable? Absolutely! Wise? Not so much…

So…

What mistakes do they make?

Putting the Financial Needs of Their Children before Their Own Needs

While admirable, this strategy often results in Gen Xers running out of money in retirement. They would be better served funding an investment vehicle that will earn a considerable sum through the power of compound interest and even tax-free income in retirement. (Ask us how.)

While it makes sense to focus on you to the possible detriment of your children, what if you could do both – invest in your retirement security while having a positive impact on financial aid eligibility for your children?

Prioritizing Debt over Retirement Savings

Gen Xers have the most credit card debt of any generation. More than half indicate they won’t begin saving for retirement until that debt is satisfied. Most advisors would agree that paying down debt will save you money and improve your credit score, most would ensure you continue saving for retirement.

We recommend the path less traveled.

We believe you shouldn’t be chasing returns of 7%, 10%, or even 12% when you are servicing debt at rates ranging from 15%-30%. Every dollar you dedicate toward that return could cost you anywhere from 3%-23%. Funding retirement before you’re debt-free doesn’t make great financial sense.

We believe you should have your dollar perform two jobs for you. First, you should direct your money to a savings vehicle earning compound interest, a vehicle where your money and the earnings thereon will never be subject to market corrections. Then, you should leverage that vehicle to pay off debt.

What vehicle should you use?

Contact us for more information.

 

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