Our individual financial needs and goals shift with our age and life stage, and of course, the broader economic environment makes a notable impact. Here, we’re taking a closer look at the needs for one specific age group. Gen Xers, as of 2024, are in the 45-59 age range. This age range is particularly important because it encompasses peak career earnings, preparation for retirement, plus family caretaking responsibilities such as caring for elder family members, children, and perhaps even grandchildren. It’s a lot to manage, and like all things in life, money plays a role both in the foreground and background.
Keep reading as we’ll cover some of the key financial metrics and possible money moves Gen Xers should consider at this important life stage!
Plan a Career Peak
To reach any financial goal, having sufficient income is a must. Gen Xers are best positioned to take advantage of their career peak. The 2022 Survey of Consumer Finances found that the median income for people aged 45-54 at the time (so the middle of Gen X now) was the highest of all age groups, at $91,880 per year. That’s a helpful benchmark for comparison.
These are prime earning years as people in this age range have accumulated experience – anywhere from 20 to 40 years’ worth depending on someone’s age and career path! It’s important to be intentional with any career moves. There are a few paths to consider.
The first clear option is to maximize income. Someone could aim for a higher-level job with a higher salary. It’s helpful to explore opportunities with better healthcare benefits to lower that expense, or better retirement benefits, such as a higher 401(k) match.
Another path is to prioritize flexibility. Gen Xers could leverage their experience to land an opportunity that provides more balance work and life rather than sheer earnings. For some, this flexibility means nontraditional work arrangements. It could be something as simple as remote work. One could work on a contract basis or become self-employed to have flexible work hours or be able to work fewer hours while still meeting financial obligations.
No matter someone’s core priorities, everyone should make sure they are being paid fairly, so as not to leave money on the table. Here are a few key actions items everyone should review at least once a year:
- Research the fair market value salary for a role and experience level.
- Research the right position level/title commensurate with one’s experience.
- Understand the rate of inflation and if wages have kept pace.
- Check out the Bureau of Labor Statistics Employment Cost Index to see the average wage increases.
- Advocate to keep up with inflation and/or the market rate, such as during the annual review cycle.
The top takeaway for Gen Xers is to be intentional. Gen Xers have experience to leverage unlike workers with less experience, which can be helpful to landing a career opportunity with more competitive benefits and compensation.
Catch Up on Retirement Savings
The next key money move for Gen X is to catch up or continue making progress toward saving for retirement.
Gallup surveyed Americans to discover the age that people expected to retire and the age when they retired. As of 2022, Americans planned to retire at age 66 but actually retired at age 61. They found that for over the last 20 years, Americans have consistently anticipated working longer than they did, and this delta is between two and five years.
Early retirement has a lot of awesome points! It’s just important to consider how one’s finances will work to support it. When someone retires earlier, that means giving up on potentially peak earning time to contribute to retirement accounts, and using retirement savings and Social Security Benefits sooner, meaning the retiree has to stretch them out.
For Gen X, however, the state of retirement savings is unfortunately below the target based on what financial experts generally recommend. The 2022 Federal Reserve Survey of Consumer Finances found that for people aged 45-54, the median retirement account balance was $115,000 and the average balance was $313,220. In 2024, Fortune magazine reported that Gen Xers reported needing $1.1 million to retire comfortably, but expected to retire with $660,000. That’s a hundreds of thousands of dollars’ worth savings gap based on the expectation to retire and the state of actual retirement savings from just two years prior.
Saving for retirement is important for everyone, but especially for the population group who is closest to it. Here are some ways to get retirement savings in good shape:
The first step is to calculate how much one needs to retire and orient financial plans around that. Retirement account provider Fidelity recommends using a proportional formula to set the savings goal:
| Age | Savings |
| 30 | 1x your salary |
| 40 | 3x your salary |
| 50 | 6x your salary |
| 60 | 8x your salary |
| 67 | 10x your salary |
This formula takes into account the rising salary over the course of a career and someone’s unique lifestyle and financial needs, rather than a dollar amount that may or may not be realistic or relevant.
After identifying one’s retirement goal and pacing, it’s time to take action. Maximizing 401(k) and Individual Retirement Account (Roth or Traditional) contributions is a great money move. People 50 years old and over can make an additional $1,000 catchup contribution per year to Roth IRAs. Working that into the family budget is helpful to reaching those lofty retirement savings goals.
It’s also always a great idea to work to squash outstanding debt and find ways to reduce costs to free up money to save. Bringing down expenses will also help retirees stretch retirement savings further. If someone is behind target or finds themself needing to retire earlier than expected, having reduced expenses can be a huge help.
Tackle Financial Planning
Getting ahead of finances with financial planning is another valuable step for those in the 45-59 age range. Gen Xers’ finances are likely more involved than when they were younger as they are more likely to own property and leverage other types of financial products to manage your money. Gen Xers may have new financial considerations based on family situations, such as inheritance after a family member passes away, supporting children, marriage, or divorce. Taking the time to do financial planning can help make those situations smoother.
In general, it’s helpful to speak with a financial advisor who can make tailored recommendations for your situation. Here, we have a list of possible things for Gen Xers to consider and discuss with a professional:
Consider property ownership status and future plans. Does the current home work, or would it be prudent to upsize or downsize? How will that look based on one’s remaining working years and retirement savings? For those with a mortgage or who are looking to buy, it’s helpful to make an intentional plan about paying off a mortgage before retirement.
Depending on someone’s age and family situation, they may be an empty nester or may have multiple kids under the same roof. Gen Xers should think about what the near and distant future of their household makeup looks like in advance.
Like we touched on in the last section, reducing expenses can be a helpful way to make retirement more comfortable. For Gen Xers, now is the time to plan how that can be feasible. Gen Xers may consider downsizing their home at some point, perhaps orienting around after any children move out. This may allow Gen Xers to tap into home equity or move to a more affordable home based on location, utilities, property taxes and more. Many people retire to lower-tax states to help make their retirement savings and Social Security benefits go farther – it’s not a coincidence that we associate Florida with retirement!
For those looking for ways to grow money while hedging risk, consider looking into U.S. Treasury security financial products. They are backed by the full faith and credit of the government, so they offer more stability than other investment options. Some like Treasury Bonds are not taxed at the state and local level – something especially helpful for those who reside in high-tax states and cities.
Evaluate life insurance needs and sign up for a policy to fill any gaps. This can be a quick and easy way to bring some peace of mind!
Lastly, as we all get older, it is increasingly important to do estate planning. Tackling this well ahead of when you and family will likely need it makes the process easier and less fraught with emotions. It’s quick, and now, there are free online will maker services to designate beneficiaries and power of attorney. Some people may find a trust serves their financial and family needs better.
Conclusion
Gen Xers: kudos for seeking out financial tips tailored to this unique life stage. We hope this blog post helps call out at least one action item to tackle! When it comes to the Gen X life stage, being intentional about one’s career, retirement, and financial planning are all especially important. Being proactive about retirement helps to make goals more feasible – financial and otherwise.
Keep reading on the Milli blog:
Asset Allocation Among Americans: Where People Keep Their Wealth
Stress-Free Finance: Easy Ways to Build Financial Empowerment
Thriving on a Fixed Income: Smart Financial Tips for Stability
