Gen X and Boomers: 3 Key Signs You Won’t Be Able To Afford To Retire Before Age 70

A retired couple sits in their living room and goes over financial paperwork.
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For Gen Xers and baby boomers, retirement age is likely just around the corner. If you’re planning your retirement, you have only a limited amount of time to fund it before starting to draw from it.

On average, most Gen Xers have around $313,220, while boomers are slightly better off, with between $537,560 and $609,230 saved for retirement, according to the Federal Reserve. Unfortunately, if you want to retire before age 70, it might be too little. While a lot will depend on your lifestyle and expenses, there are certain red flags that you can’t afford to retire before becoming a septuagenarian.

GOBankingRates asked financial experts to weigh in on what may signal that retirement is still years away for boomers and Gen Xers.

Here are the three key signs you won’t be able to afford to retire before age 70 if you are a Gen Xer or boomer

Insufficient Savings

“One of the most evident signs is having inadequate retirement savings. If your retirement accounts, such as 401(k)s and IRAs, have not reached substantial balances, it indicates a need to extend your working years. Financial planners often recommend having eight to 10 times your annual income saved by the time you retire,” said Dennis Shirshikov, an adjunct professor of economics and head of growth at Summer.

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To curb this, Shirshikov recommended upping the amount you save. “Increase your savings rate by maximizing contributions to retirement accounts and taking advantage of catch-up contributions if you’re over 50,” he said. “Investing in a diversified portfolio with a mix of stocks, bonds and alternative assets can enhance growth potential.”

In order to determine whether your retirement is fully funded, you will need to create a budget and decide how much you will need.

“As both a financial expert and a boomer, I can confidently say that you won’t be able to retire before age 70 if you don’t know how much you’ll need. You just won’t,” said David Bakke, a financial expert at Dollar Sanity. “Here’s the good news — you might need a lot less than you think. Envision your retirement, and then take a conservative look at online calculators. You might be able to get by with a lot less than you might have originally thought, but you have to do the math first.”

High Levels of Debt 

“Carrying significant debt into retirement can severely impact your financial stability,” Shirshikov said. “This includes mortgage balances, credit card debt or outstanding loans. High debt levels mean more of your retirement income will be allocated to servicing debt rather than covering living expenses.” 

Luckily, there are ways to reduce your debt and expenses. “Streamline your expenses and prioritize paying down high-interest debt. Adopting a minimalist lifestyle or downsizing your home can free up resources to bolster your retirement fund,” Shirshikov said.

Bakke recommended getting an early start on reducing expenses.

“Without a budget, you might be working well past age 70. Get an idea of your income now, track your expenses and get to work on cutting costs. Every dollar you save is one more dollar you’ll have in retirement and will also get you closer to retiring by the time you’re 70,” he explained.

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Lack of Diversified Income Sources

“Relying solely on Social Security and a single retirement account can be risky,” Shirshikov said. “A diversified portfolio, including investments, rental income or part-time work, provides a buffer against market volatility and economic downturns.

“If your retirement plan lacks multiple income streams, it’s a sign you may need to work longer to build a more robust financial foundation. For instance, incorporating real estate investments can offer a steady income stream, reducing the pressure on your retirement savings.”

He said hopeful retirees could “consider part-time work, freelance opportunities or starting a small business.” Doing so could provide additional income sources and more financial stability.

“These activities can supplement your retirement income and provide a safety net. Additionally, investing in rental properties or dividend-paying stocks can create passive income streams,” Shirshikov explained.

Understanding exactly what you will receive for Social Security and how your age may affect your benefits is also critical.

“In terms of your Social Security benefit, the longer you wait to retire, the higher it is. However, if the target is 70, you need to know an estimated benefit to see if that fits well enough with your overall financial picture,” Bakke said. 

He suggested boomers and Gen Xers research what their payments will be so that they can be better prepared.

“Do a generic internet search, enter your info and see your estimated monthly payment. Make your plans from there, and you just might be able to call it a career before age 70,” Bakke said.

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