A new study finds the retirement prospects for Generation Xers pretty bleak, and this week's Money Matters Report offers steps they should be taking today to lay the groundwork for a solid future. NY1's Tara Lynn Wagner filed the following report.
When the Great Recession hit in 2007, one of the biggest blows landed on Generation X. According to the Pew Charitable Trusts, Americans born between 1966 and 1975 saw their wealth drop by almost half as the collapse of the stock and housing markets delivered an economic one-two punch.
"A lot of them bought at the top of the market, so their home values went down along with their stock market values," says Gary Scheer, a registered financial consultant.
On top of that, Gen-Xers are also dealing with college loans for themselves and their children, a decline in pension plans and, of course, credit card debt.
"Many of these people have been able to access credit card debt, mortgage debt, refinancing very easily before this whole crisis came about, and they were actually spending way, way above their means," says Alan Kahn, a certified public accountant.
Even those who had been saving may have already dipped into that pool.
"A lot of people, unfortunately, had to tap into their 401ks and pay the taxes and penalties," Scheer says.
Of course, Gen-Xers won't reach retirement age for another 20 to 25 years, but is that enough time to get back on track?
"There absolutely is enough time, but what you need is to change your lifestyle," Kahn says.
For starters, pay yourself first through an IRA or a 401k, especially if your company offers a match.
"Take advantage of that, because many employees are leaving free money on the table," Kahn says. "It is amazing what you can do with a little bit of money on a tax-deferred basis."
Whether your goal is to stock away $25 a paycheck or 10 percent of your take-home pay, experts agree that the important thing is to make a plan and commit to it, even if that means tightening your belt.
"The whole key is to live on less, making the commitment to put away money for the future," Scheer says. "No matter what's happening economically, always put money away."
"You don't have to map out a plan that's going to say, 'I'm going to be a millionaire when I retire,' but you can map out a program that will enable you to put something away towards that retirement, because between social security and hopefully, your 401k plan and some other savings, hopefully you'll be able to make it in retirement," Kahn says.