Adults age 38 to 47 years old, also known as ‘Generation X,' may find themselves in hot water when it comes to preparing for retirement.
Curtis Blair, financial expert and CEO of retirement planning and asset protection company, the Blair Group, says that with some careful planning, retirement doesn't have to be a challenge.
Blair says there are several reasons for the current bad shape of retirement.
Many have had a difficult time with the last recession; Gen Xer's lost 45 percent of their net worth during the recession, Blair says. That's 17 percent more than the Baby Boomers lost.
"They weren't in very good shape before the recession," Blair says, "and they carry huge debt loads. The average debt load is about $80,000 for Gen Xers."
Over half of Gen Xers don't have sufficient savings in their retirement funds to help them along, he says.
"There's been a study done that said 59 percent of Gen Xers don't even have $100,000 for their retirement," Blair says, "so that's woefully inadequate."
He says many are relying partly on social security that may or may not be there when they retire, while life expectancy has increased, meaning that assets need to last longer as well.
Another reason X'ers are struggling is job security – many executive level positions sought after by Gen Xers are still occupied by Baby Boomers who are staying in the work force.
Most Gen Xers are still paying off massive debt loads, which is no surprise - the national debt level for credit card limits is approaching $1 trillion, Blair says.
Some are pulling out of their savings early. 15 percent have pulled out their 401k money to help with the recession, he says, and 22 percent aren't putting that money back into their retirement plans.
"Gen Xers are having a hard time servicing their debt load as well as trying to put money back," he says.
The future is not totally bleak, though. Blair says that Gen Xers looking to protect their retirement funds should follow a few guidelines to help them along.
Save money – 59 percent of Gen Xers say they have not properly planned for saving money. Blair suggests visiting with a financial planner to help with designing a plan to create and save income.
He also suggests planning ahead to account for inflation. Factor in at least three percent for inflation when planning out finances, because in twenty years, inflation may cause income needs to double.
Gen Xers should also plan for healthcare expenses, Blair says. Married couples will take an average of $250,000 to $290,000 of out of pocket expenses in retirement for healthcare, he says, regardless of Medicare or any other supplements.
He also advises that Gen Xers don't take money out of their 401k's, because it may cost them later.
"Certainly not, because when they do that, they incur additional taxes and penalties," Blair says. "So that's one of the things we always say – never take out money early unless you absolutely have to."
The road ahead may be rocky, he says, but with the proper planning, Gen Xers can have a smooth retirement.
Visit the Blair Group website at http://www.theblairgroupllc.com/.