Top Money Tips for 40s and 50s (You Should Know, I’m One of Them)

This story is part of So Money (subscribe here)an online community dedicated to financial empowerment and advice, led by CNET Large editor and So Money podcast host Farnoosh Torabi.

Congratulations, Generation X. Sounds like you don’t have any money problems. If you were born between the mid-1960s and 1980s, you should now have lots of savings, no debt, and a solid retirement plan, right?

Do not?

I do not think so. And yet, the financial advice community is primarily focused on helping millennials and Generation Z, those born after 1980. And at the other end of the spectrum is financial advice for baby boomers, those born between 1946 and 1964, as they navigate the retirement and Medicare maze.

In between, Generation X (of which I consider myself a proud member) has been somewhat overlooked. If you’re a person of color in this demographic, you may feel completely ignored. I know because I’m part of the problem. My work doesn’t always emphasize the financial needs of Americans in their 40s and 50s. When I have Featured this cohort on my podcast or in articles, I notice an increase in engagement and a few more “thank yous.”

For one thing, Gen X has managed to keep its financial head above water more than previous and younger generations. Between 2007 and 2010, after the housing bubble burst, the median Gen X net worth fell 38%, and baby boomer households saw their wealth decline 26%, according to Pew Research.

As a result, some Gen Xers who were lucky enough to keep assets and continue to work were able to recoup losses, and more, long before retirement.

We also pay less for college. In 1995, the average annual cost to attend a four-year institution would be just over $10,000, compared to $28,000 today. And chances are we haven’t entered a deep recession by the time we graduate.

Still, the journey has been anything but linear for members of Gen X. While we may not need as much advice on how to consolidate our student loans, life events and responsibilities: getting married or divorced, raising kids or not, caring for aging parents and more leave many in this struggling demographic at critical junctures.

We could use some personalized financial advice and innovative strategies.

“We’re really at a point in our careers and our lives where everything is happening, whether it’s in our jobs, in our relationships…I don’t want to get depressed, but…it’s a lot,” says editor Margit Detweiler. Detweiler is the founder of TueNight.com, a storytelling platform for, as she describes it, “grown Gen X women.”

Financial advice for my fellow Gen Xers could span several books, so I thought I’d start with these five steps and promise to dedicate more coverage in the future.

1. Race: It’s not too late to speed up

If you’ve been climbing your career ladder for a decade or two and wondering what’s next, be inspired by the many examples of people who made huge leaps in their careers or became entrepreneurs in their 40s and 50s.

While Generation X is currently experiencing its best earning years, the best may be yet to come. Julia Child, for example, wrote her first cookbook, Mastering the Art of French Cooking, at age 49, after years in the advertising profession. Viola Davis spent decades working as an actress before her career skyrocketed at age 40, when she starred in the movie Doubt and was nominated for an Academy Award for her role.

2. Removal: Turbocharge saving

Don’t cut out the messenger, but some investment firms suggest having about three times your annual salary saved in a retirement account by age 40. At age 50, that recommended factor increases to five. This may seem like an outrageous sum to achieve, but it’s fair to say that the onus of saving for retirement falls squarely on the individual these days. With pensions extinct (for the most part) and the uncertainty surrounding the fate of Social Security, saving for our future has never been more critical.

If you have access to a workplace retirement account like a 401(k) and you’ve turned 50, know that you can catch up by contributing an extra $6,500 this year. IRA savers age 50 and older can invest an additional $1,000.

Finally, this may be a good time to reconsider your retirement age. If you had to work part time or full time between the ages of 60 and 70, what would be your ideal role? A little early strategic planning is never a bad thing.

3. Debt: Don’t worry about paying your mortgage

The idea of ​​retiring without a mortgage sounds reassuring, but in reality, it may mean making extra payments each year to get there. It’s worth it? If you have a lot of financial goals vying for your attention right now, from saving for retirement to putting a child through college or supporting an aging parent, then don’t worry now about paying off your mortgage (which is likely to be low-interest). ). Velocity). Focus on financial moves that will produce a higher rate of return, such as investing, or those that are more immediate in nature.

4. Family finances: figure out the money, talk to your parents

It can be awkward to talk about money with our parents, but it can be beneficial for both parties.

When she joined me on my podcast, Cameron Huddleston, author of Mom and Dad, We Need to Talk, talked about her mother’s battle with Alzheimer’s and how she wished she had discussed money with her mother before the diagnosis. “When I saw that she had memory problems, all of a sudden, it wasn’t a hypothetical-type conversation anymore. It was, ‘Oh my God. This is happening. What are we going to do?’ That’s why people need to have these conversations sooner rather than later…so they can talk about what-ifs. No: “We’re in the middle of this now. Is an emergency. Emotions are running high. How do we handle it? with this?'”

Huddleston says a wise way to start the conversation is to use the personal story of someone you know who went through a tough time because they didn’t talk about money with a parent. At this stage of life, “I’m sure you know someone who has already started dealing with problems,” he says.

The most important details to check, Huddleston suggests, are whether they have a will or a living trust, and whether their parents have appointed a power of attorney, someone who can step in to make financial decisions if they can’t.

5. University for children: you are not a bad parent if you do not pay for it

Really, you’re not. If your child is going to college and you haven’t saved for this expense, Do what you can. But also remember that there is much students can do on their own to ease the cost burden. Sacrificing your own retirement or dipping into emergency savings, while tempting, can come back to haunt you—and your adult child—if you have trouble replenishing those funds in the future.

A critical part of planning college is discussing all available pathways with your child, and there are many, such as scholarships and merit grants, work-study programs, attending a local community college first, working part-time to pay for credits college students , or considering a career where student loan forgiveness is a potential option. And remember, college may not be the right path for everyone. Vocational school, coding bootcamps, and apprenticeships are valid alternatives these days.

If your child is still a long way from college, consider the following: Open a 529 college savings account where your money can be compounded and, depending on your state, you may receive a tax break.

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