How Much Is Enough to Retire and What If there Isn’t Enough?

How Much Is Enough to Retire and What If there Isn’t Enough?

The Great Recession has affected family decisions at every life stage. Get back on your financial feet, even if you are getting a late start.

For one family in their middle forties, their current upper-middle class life of financial success is a result of a 13-year struggle. He was downsized from his job in 2006, then in the aftermath of the Great Recession, he found new jobs, only to be laid off twice, finally landing a position in 2019, as described in Consumer Reports in the article “Will you have enough money to retire?”

The couple has battled to keep their finances together. While the wife continued to be employed, to cope with long periods of low income, they slashed spending while continuing to save for their daughter’s college education. No vacations, low contributions to their 401(k) plan and lowered expectations for retirement were some of the adjustments.

Their boomer parents have recently spent a month in Australia, but that’s not likely to occur for this generation of the family. As members of Generation X, a group in age from about 39-54, they are in classic American mid-life, with mortgage payments, saving for college and saving for retirement. The Great Recession hit this generation harder than others, just as they were establishing themselves.

Only 65% of people between ages 40 and 61 owned their own home in 2016, according to a recent study by the Employee Benefits Research Institute. When today’s boomers were in that age range, 75% owned homes. In addition, few Gen Xers have a retirement plan.

It is true that all Americans were hurt by the recession, but those furthest away from retirement seem to have found it most debilitating. What can this generation do to re-tool for retirement?

Scrutinize finances. Face the financial facts head-on, get a clear picture of how much you bring in every month after taxes and deductions and how much you spend each month.

Cut out any excess. Are you paying twice for the same streaming service, or making auto renew payments for things you don’t use? Even small amounts add up over time.

Deal with debt. Credit card debt at a high rate, like 17%, needs to be paid off as soon as possible. At mid-life, credit card debt can wreck retirement. Target the highest rate debt first. It’s tempting to pay off little accounts first, but the highest rate debt is the most expensive.

Look hard at big ticket items. Skip the new car and opt for a staycation. Downsize to cut housing costs, if that is a realistic option.

Treat retirement savings as sacred. Take advantage of any matching contributions from employers. If you are self-employed, set up an IRA or a solo 401(k) plan. Don’t tap these accounts, no matter what.

Stay employable. The single most effective way to protect retirement is to continue working. That requires staying current in your industry and making yourself necessary. Take advantage of training opportunities or develop new skills outside of the workplace.

ReferenceConsumer Reports (Aug. 29, 2019) “Will you have enough money to retire?”

Hear From Our Clients

I heard Cindy’s presentation at a Senior Luncheon at my church, and was very impressed. She helped my daughter and me understand many aspects of elder law. Josh has also been very helpful in my planning to enter an independent living situation . I have told many friends about them.

- Charlotte

The very best elder law attorney and staff anyone could ever ask for! I have referred a number of clients to Cindy and she never disappoints. She is kind, caring, and extremely thorough in making sure everything is completed as it should be. I highly recommend Cindy for anyone needing lawyer services; she truly goes above and beyond for every client she helps and has had a huge impact in so many peoples’ lives. Thank you, Cindy and staff, for everything that you do- I’m so glad to know you!

- Kerri

Cindy and the Nelson Elder Care Law team are trustworthy and helpful. They are the experts in elder care law. At Leaf Cremation, we entrust our families to the care of the Nelson team when their services are needed.

- Pierce

Josh Nelson, and his staff, have been amazingly helpful to our family. The ins and outs of nursing homes, the rules and regulations that govern Medicare and Medicaid are daunting and the folks at Nelson Elder Care Law have been informative, responsive, and above all, empathetic. I cannot emphasize enough how their service has taken a weight off of our shoulders especially during a world pandemic that has targeted nursing homes across our country. I highly recommend retaining Josh and his firm!

- Marcia

I had a simple legal question to them that I needed answered and they very helpful in giving me the information I needed. I highly recommend them and will reach out to them if I need more advice or assistance. Thank you for taking your time to just answer a couple of questions I had!

- Ben