6 Tips for Gen X To Stay Ahead of Retirement Savings In Case of a Possible Recession
Written by
J. Arky
Edited by
Ashleigh Ray
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It might be difficult for some people to believe, but Gen X has nearly reached retirement age. For Gen X, or those born between 1965 and 1980 who are currently 44-59 years old, retirement could be on the horizon, as could a looming recession.
For months now, the economy has struggled to reduce prices on everyday goods while inflation continues to damage American wallets. What should Gen Xers do should the bottom fall out of the economy just as they hang up their work boots?
To help Gen X stay ahead of a possible recession, GOBankingRates reached out to the experts for their advice for Gen Xers on the verge of retirement.
Review Your Retirement Plan
Going over retirement goals and dates is a key part of any retirement plan, but it’s especially important when facing a possible recession.
“In light of the economic forecast, one might consider the choice to extend working years for several years to build a solid financial base,” said Brook Hiddink, the founder of High Ticket.
“On the other hand, [you could] take on work part-time or consulting to make a comfortable transition to retirement with a source of income.”
Cut Out Debt
Michael Platner, the managing partner of Fort Lauderdale at Lewis Brisbois, suggested that any Gen X-er on the cusp of retirement consider eliminating debt, especially high-interest rate debt like credit card debt.
Hiddink knows this suggestion is easier said than done, “but the less debt you carry, the more of your retirement income can be dedicated to other essential expenses.”
And doing this will give your wallet some breathing room during an economic downturn.
Build an Emergency Fund
“Build a robust emergency fund with at least enough to cover 6-12 months of living expenses,” advised Hiddink. “This fund serves as a hedge in case you encounter any unexpected financial obstacles during the course of a recession.”
In order to do that, first Gen X-ers have to build it into their budgets, if they have one.
“If you don’t currently live on a budget, consider doing a family budget to reveal where you may be leaking cash in your life,” suggested Platner. “Review credit card statements for recurring charges you may have not noticed or subscriptions you don’t really use or need.”
Reaffirm Job Security
Protecting your job security is another key step in preparing for a recession.
“Think about money-making and saving ideas your company/employer can benefit from,” said Platner, “[because] when recession comes and employers consider workforce reductions, those team members who contribute to the bottom line are usually the last to go.”
Platner suggested that if Gen Xers have their own businesses, recessionary times can be a reminder to acquire competitors or hire talent from other firms while terminating unproductive or overpaid team members.
“Prioritize cash flow and having cash in the bank so you can spend money on things that are most productive or bring the best quality of life results,” he added.
Have Multiple Income Streams
According to Hiddick, diversification of your income sources has to be at the forefront in case a recession occurs. Platner agreed, also suggesting that Gen X consider their “side gig appetite and options.”
He said, “Today’s retirees have found that there are all sorts of ways to leverage their expertise from their careers and real-life experience to do something fun that keeps cash coming in the door and diversifies sources of income.”
Stay Informed and Flexible
“Keep yourself abreast with the economic trends and be ready to adjust your financial strategy as times change,” advised Hiddick, noting that flexibility is essential to successfully getting through uncertain periods.
“Taking these proactive steps will definitely have one better prepared for retirement and truly have an edge on seeking suitable ways to guard one’s finances against a recession.”
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