It’s hard to give retirement planning advice in an article because 1, every situation is different, and 2, the advice you need really depends on your age. With things changing as fast as they have lately, it makes it even harder to know what retirement will look like for the younger generations, but there’s some things that are always good advice.
Gen Z
Start saving! Set up an IRA, max out your 401k, do whatever you can to save, save, and save some more. Make a habit of depositing as much of your income into savings. If you don’t make enough to save, look for a new job or try to find a way to cut back on your lifestyle choices.
You should also take stock of your career choices. Do you have a pension? Will you have good benefits? Is there room for growth? Set yourself up for success now.
And be ready to commit! You have some time, but you should try to find a job in the next 5 years or so that you’ll stick with.
Millennials
Career planning for millennials is quite tough since they came of age during two “once in a lifetime” recessions. Over the next 5 years, over 40 million Americans are going to reach retirement age, meaning there’s going to be a huge change in the job market.
For older millennials this might mean promotions, and for younger millennials this might mean new opportunities within your field. When you’re weighing your options, you need to start thinking about your benefits and what retirement will look like for you.
Does your current job offer a pension? Will you have good benefits? Most people settle into their career/field at age 30. And while it’s never too late to change your life, this is the ideal time to start setting yourself up for success. That could mean working hard to earn a promotion, or it could mean trying to find a better opportunity within your office. Now is the time to capitalize!
Gen X
The biggest tip for Gen Xers looking to retire happy is to avoid lifestyle inflation. The phrase “lifestyle inflation” probably sounds like one of those buzzwords that financial planners use, and that’s because it is. But it’s a good thing to keep an eye out for.
Lifestyle inflation is when you spend more money because you’re making more money. Which, that sounds like your right, right? Well. While you’re entitled to do whatever you want with your money, you could do more with your income increase by putting the additional money into savings. This is especially true for people who did not start saving early.
So keep your roommates and your old car. Make more meals at home. And just be comfortable. You’ll appreciate it when you’re older.
Baby Boomers
Now that you’re closer to retirement (or are actually retired) your plans can finally go from being “rough” to defined. So, get planning! You should define your budget and get a general sense of your monthly income and expenses. Do you have a pension? Do you have savings? Social Security? Are you paying rent? What about insurance?
You might have lived without a defined budget before, but retirement is a different ballpark! Unless you have excessively saved, there will almost certainly be changes to your lifestyle. Especially if you plan to move! This is also the time to decide what assets your holding onto and what you’re liquidating. Do you have stocks to sell off? An IRA to withdraw from? What about extra property to sell? As the saying goes, you can’t take it with you.
And there you have it! There’s one quick tip for each generation. If you’re interested in more retirement tips, be sure to check out our other articles in the Road to Retirement series, such as this one on the steps to retire https://www.sdpeba.org/news/city/steps-to-retire.