10 Bad Money Habits Gen X Should Avoid Before Retirement
Written by
Jordan Rosenfeld
Edited by
Levi Leidy
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Gen X individuals are the latest sandwich generation, balancing their own financial responsibilities, often caretaking elderly parents, paying for their kids’ college and trying to prepare for retirement, all at the same time.
The sheer burden of managing all of these responsibilities can lead to financial mistakes that can cost them in retirement. However, with some careful attention, Gen X can prioritize their retirement.
Neglecting Retirement Savings Over Other Priorities
One common mistake Gen X individuals may make is neglecting their retirement savings altogether while prioritizing financial responsibilities such as caring for aging parents or supporting children in college, according to Taylor Kovar, CFP, founder and CEO at 11 Financial.
“It’s essential for Gen X to prioritize their retirement savings and take advantage of retirement savings vehicles such as employer-sponsored retirement plans (e.g., 401(k) or 403(b)) and individual retirement accounts (IRAs),” he said.
Not Building Up Emergency Funds
Balancing multiple financial responsibilities can also leave Gen X vulnerable to unexpected financial emergencies, Kovar warned.
“Neglecting to establish and maintain an emergency savings fund can lead to reliance on high-interest debt or premature retirement account withdrawals in times of crisis. Gen X should prioritize building an emergency fund to cover at least three to six months’ worth of living expenses.”
Charlie Massimo, senior vice president and financial advisor at Wealth Enhancement Group, added that while not saving enough is a common concern for all generations, Gen X may be particularly at risk due to several factors.
“They entered the workforce during economic stagnation and may have faced challenges with job security and stagnant wages. Additionally, many may not have access to traditional employer-sponsored retirement plans, such as pensions, which were more common for previous generations,” Massimo said.
Taking Out Student Loans for Your Children
The big mistake Gen X parents should avoid is taking out too much in parent PLUS student loans to pay for their child’s college, according to Mike Hunsberger, CFP, the owner of Next Mission Financial Planning.
“Unless they have significant free cash flow available to pay them back, they will most likely have to work longer or see their standard of living drop now and potentially into retirement,” he said.
“While those who are done borrowing still have the option to do the double consolidation loan to get into the new SAVE repayment plans, families who are just starting the college journey won’t have that option after July 2025. Those families need to realistically assess how much student loan debt they can truly take on before embarking on the college journey.”
Forgetting About Health Insurance Coverage
Gen X individuals may still be young enough to not feel the burden of extended healthcare concerns, enabling them to overlook the importance of insurance coverage. Thus, Kovar explained, it’s crucial for Gen X to consider not just regular health insurance, but life insurance, disability insurance and long-term care insurance.
“Failing to adequately protect against unforeseen risks can jeopardize their financial stability and retirement plans. Gen X should assess their insurance needs and ensure they have appropriate coverage in place.”
Not Paying Down Debt
High levels of debt in the lead-up to retirement can hinder financial security and limit retirement options, Kovar said.
“Gen X has a higher average debt load than other generations,” Massimo added. “The rising costs of education, housing and healthcare combined with the dot-com bust and [the] Great Recession have led many Gen Xers higher into debt over time.”
Massimo said it’s really important for Gen X to figure this piece of the puzzle out before retirement. “When the paychecks stop coming in, the debt cycle has to stop. Ideally, you want to solve for this a decade or two before retirement, and balance your cash flow so you can save and then live within your means in retirement.”
Kovar agreed, adding that, “Gen X should prioritize debt repayment strategies to reduce or eliminate high-interest debt before retirement. This may involve consolidating debts, negotiating lower interest rates or implementing a debt snowball or debt avalanche repayment plan.”
Not Reevaluating Their Investments
Gen X also needs to adjust their investment strategy to prioritize income and capital preservation over growth as they approach retirement, Massimo said.
“However, some may not be proactive in making these changes, exposing them to unnecessary risk in their retirement portfolios.”
Not Having a Retirement Plan
The biggest mistake Gen X may make is to not have a concrete plan for their retirement, according to Jacob Sadler, CFP, founder and senior advisor at Curio Wealth.
“This can include not knowing how much they need to save, not having a withdrawal strategy or not understanding their Social Security benefits,” Sadler said. “Lack of planning can lead to financial anxieties and difficulties adjusting to their new lifestyle in retirement.”
Being Overly Self-Reliant
Another blind spot Gen X may not even realize they have is their tendency to be too self-reliant, Sadler said. “This can be a great attribute, but it has its limits. Don’t let pride stand in the way of seeking help when it is needed. This is especially true when it comes to financially preparing for retirement.”
While many people can find success doing DIY retirement planning, Sadler urged Gen X to be honest with themselves. “[If] you need another set of eyes checking your work or being your accountability partner, then seek out a qualified and fiduciary financial advisor to support you.”
Not Budgeting
Since many Gen-Xers are caring for aging parents while raising children, Sadler said it’s easy for money to start “slipping through your hands like water.”
This makes it essential to budget, he said. “Track your expenses like a hawk. It takes time and discipline, but it is absolutely necessary in chaotic and stressful circumstances. Not only will this keep you on track, it will also feel empowering.”
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