Even as Baby Boomers retire, and un-retire, and as the “great transfer” of their wealth to younger generations unfolds, the oldest members of Gen X are hitting 60 this year, and many hope to retire by 62. Of course whether or not that turns out to be realistic, depends greatly on employer sponsored retirement plans.
Born Between 1965 and 1980?
Being loved by Mr. Rogers before moving on to The Electric Company, and eventually Saturday Night Fever, and Saturday Night Live. Having your whereabouts unknown for hours at a time, then phoning home from a pay phone. Quarters! Beepers! Listening to albums, cassettes, CDs, and MP3s (before returning to albums). Punk, grunge, hip hop, and disco too. The start of the internet. Feathered hair bangs. These are the kinds of things that tend to make Gen Xers nostalgic. Though these days we are mostly fully up to speed on tech, we may have started forgoing some of the latest, since as the first of us nears 60, it’s tempting to revert to that ole “whatever” attitude. Chill pill anyone?
Alas, with Gen X eyeing retirement, there are more questions than answers. As retirement plan pros at RPAG point out: “the decline of traditional pension plans, which many Boomers depended on, means that Gen Xers must rely heavily on defined contribution plans and personal savings to fund their retirement.” Clearly, employers who sponsor retirement plans can make a great deal of difference on the path to retirement for Gen X, and advisers offer these pointers:
Generation X often finds itself as the “sandwich generation,” attempting to balance financial responsibilities for both aging parents and dependent children…..Plan sponsors can provide critical support by offering financial wellness programs…. Resources that focus on debt reduction, budgeting and emergency savings can help employees work toward freeing up income for retirement savings.
Economic instability during critical earning years has left many Gen Xers with insufficient savings. The Great Recession delayed savings…..According to a 2024 Vanguard report, the average 401(k) balance for individuals aged 45 to 54 stands at $168,646, with a median of just $60,763. Plan sponsors can encourage catch-up contributions for those 50 and older and connect participants with financial advisors to explore strategies for making the most of their remaining earning years. These strategies can help augment their retirement savings and strengthen their financial position.
Good To Know
As birthdays add up, and thoughts of retiring from the working world creep in, a useful precursory step is understanding the ages at which money from savings becomes available. U.S. News provides this guidance on milemarkers to help Gen X begin plotting retirement:
- Beginning at 59 1/2, Gen X can start taking penalty-free withdrawals from tax-advantaged retirement accounts such as 401(k) accounts and IRAs. However, knowing when to begin distributions and how much to withdraw can be challenging.
- The full retirement age for Social Security is 67 for everyone born in 1960 or later. You can get a my Social Security account to learn more about your age and benefits.
- In addition, you can check to see an estimate of what you’ll receive in benefits. “The amount of Social Security you receive is directly impacted by the number of years you work, the amount you pay into the system and when you start claiming your benefit,” said Matt Calme, a certified financial planner and wealth advisor at HCM Wealth Advisors in Cincinnati, in an email.
Sponsoring A Retirement Plan?
Good work! Keep going! Pointing out that employer sponsored retirement plans are more critical for workers than ever, retirement industry leaders are advising employers that older workers especially need financial education, tailored benefit options, and opportunities to make catch-up contributions. Of course it’s also best for plan sponsors to secure their own futures. Indeed, plans are under heightened scrutiny, and ERISA litigation has continued to rise. Protection is essential, and at Colonial Surety Company, a whole year of Fiduciary Liability Insurance for plan sponsors costs less than a few dollars a day.
To further shield the business and retirement plan, Cyber Liability Insurance is included at no extra cost. Armed with Colonial’s liability insurance package, if you face claims of alleged or actual breaches of duty in connection with the employee retirement plan, you’ll be protected with defense costs and penalty limits up to $1,000,000.
Colonial Surety offers a simple and affordable way to obtain this protection for yourself and your business: just upgrade your ERISA bond to include Fiduciary and Cyber Liability insurance. You can even choose a 1, 2, or 3-year package. If you already have an ERISA bond with Colonial, lock in your rates by upgrading to the 2 or 3 year complete package.
Protect yourself, your business and your plan for the go forward:
ERISA Bond+Fiduciary+Cyber Liability HERE
Providing customers with knowledgeable and friendly service since 1930, Colonial Surety Company is rated “A Excellent” by A.M. Best Company, U.S. Treasury listed and in business all across the country.