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Generation X, often referred to as the “Lost Generation,” finds itself in a precarious financial situation, wedged between the money struggles of millennials and Gen Z on one side and the relative stability of baby boomers on the other. According to a recent Bankrate survey, 47% of Gen Xers (ages 44-59) have more credit card debt than emergency savings.
This statistic paints a picture of Gen X falling behind all generations, with millennials (ages 28-43) faring only slightly better at 46% having more debt than savings, and Gen Z (ages 18-27) at 32%. On the other end of the spectrum, baby boomers (ages 60-78) appear to be in a more comfortable position, with 68% having higher emergency savings than credit card debt — the highest percentage among all generations surveyed.
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The survey data highlights the financial tightrope that Gen X is walking, sandwiched between the debt burdens of millennials and Gen Z, often referred to as the “broke” generations, and the comparatively well-prepared boomers. This Lost Generation moniker takes on new significance as Gen Xers struggle to build a financial safety net amid competing demands of supporting their children and aging parents.
Greg McBride, chief financial analyst at Bankrate, points out the strain many households are facing, stating, “Financing purchases at 20% interest rates is a sign of the financial strain millions of households are feeling.”
The survey also revealed that Gen Xers were the most likely generation to report having less emergency savings than they did a year ago, with 34% admitting to a decline in their financial cushion.
Pew Research Center’s examination of Generation X highlights their significant role as a bridge between the notably different baby boomers and millennials. Despite their critical economic and social position, Gen Xers have often been overlooked in discussions about demographic, social and political changes. Their financial outlook is notably more pessimistic compared to other generations, partly because of the economic stresses associated with middle age.
Trending: If the average American household is a millionaire, why do people feel so broke?
This bleak reality was echoed on Reddit, which posted an article about Gen X having the largest wealth gap. In the comments, one user wrote, “I feel like I did everything they told us to do and be successful, and I’m sure I’m going to die penniless.”
Another lamented, “I myself have been a casualty of multiple economic downturns, notably the 2008 recession … and, well, it’s not looking good for me.” A third user pointed out, “There’s no safety net under capitalism, but millennials are not the enemy. They’re allies.”
As the generational divide widens, Gen X finds itself at a crossroads, caught between the financial challenges of their children’s generations and the looming retirement prospects of their parents’ cohort. Navigating this middle ground will require a concerted effort to prioritize both debt reduction and consistent savings — a balancing act that many Gen Xers are still struggling to master.
it is never too late (or too early) to start working toward financial stability. Consulting with a financial adviser can play a pivotal role in helping people across all generations to assess their current financial situation, set realistic goals and create a plan to achieve these goals.
Financial advisers can offer tailored advice on a range of strategies to reduce debt, increase savings and plan for retirement, ensuring that individuals are taking proactive steps toward financial health. Whether it’s exploring options to consolidate debt to lower interest rates, setting up an emergency fund to avoid future debts or investing wisely for long-term growth, a financial adviser can provide guidance tailored to each person’s unique circumstances.
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*This information is not financial advice, and personalized guidance from a financial adviser is recommended for making well-informed decisions.
Jeannine Mancini has written about personal finance and investment for the past 13 years in a variety of publications including Zacks, The Nest and eHow. She is not a licensed financial adviser, and the content herein is for information purposes only and is not, and does not constitute or intend to constitute, investment advice or any investment service. While Mancini believes the information contained herein is reliable and derived from reliable sources, there is no representation, warranty or undertaking, stated or implied, as to the accuracy or completeness of the information.
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This article ‘I’m Sure I’m Going To Die Penniless’ — Almost Half Of Gen X, The ‘Lost Generation,’ Has More Credit Card Debt Than Savings — Even the ‘Broke’ Millennials’ Are Faring Better originally appeared on Benzinga.com
© 2024 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.
The idea of retirement as envisioned by our parents is undergoing a radical change. Once viewed as the last chapter before death, it has now morphed into an intermediate phase that is no longer synonymous with old age or complete inactivity. Today, a typical retiree can reasonably expect to live another 20 to 30 years, ideally in good health, provided they continue to exercise both body and mind. In this context, the word “retirement” seems obsolete. It is perhaps more fitting to refer to it as the “third half” of life.
However, retirement often entails a profound change of identity, especially if work played a substantial role in shaping one’s identity. Losing much of what defines us while still possessing the energy and desire for a working life can be profoundly disorienting.
Getting the transition to retirement right is vital for retirees, their colleagues, and organizations. Through our research and interactions with professionals navigating this shift, we have pinpointed four psychological mindsets associated with the transition to retirement.
Vanessa was a partner in an audit firm in Paris. At the age of 51, she decided to cease her professional activity. “I was getting old and realizing it,” she says. She gave herself two years to organize her succession and slowed down, changing her occupation day by day.
“Things had changed in my head; it had become difficult to stay at 100%,” she says, adding that she was thinking about her “future job.” A year after her retirement, she remains active, but in a different field, now running a bed and breakfast hotel in Marseille. She takes daily walks to the market to source produce for her guests, and winters in the southern hemisphere for two months during the winter lull.
“Switch” professionals like Vanessa describe a natural transition to their “third half” identity. The common feature among them is how carefully they prepare with small incremental changes and open discussions about their plans. They seem to have departed from their former professional identity without regret, moving towards a new identity that they may not idealize but recognize for its positive benefits.
Denis retired a year ago. He is critical of his former professional environment, where he feels there is still a strong “alpha male” culture and excessive professional commitment. Nevertheless, he serves as a non-executive director of various organizations, one of which is a former client of his.
Other aspects of his work, however, are completely new to him. He has learned to cede executive control and take a position of oversight, which is both rewarding and different. Above all, he has adopted a holistic approach to life, leaving more room for what he finds deeply fulfilling and interesting. For instance, he takes pleasure in coaching a junior basketball team in his spare time.
Individuals who are “transcending” share similarities with professionals going through a rapid “switch.” However, the distinction lies in their desire to maintain a professional identity and shift in steps. They exist in a liminal stage, straddling between two places. Even if they are ready to engage in new activities, they do not wish to completely give up their professional lives, whether in terms of activities or the customers they serve. They have one foot in the new and one still in the old, offering a sense of psychological stability and solace.
Gregory, a former accounting partner, retired and became an independent consultant. He left at the mandatory age of 55 years old, relatively disillusioned but in good health. Relieved to have left the political aspects of his former organization behind, he is bitter about his new role, which he expected to have more purpose. He feels alone and lacks administrative support. To Gregory, enforced retirement felt like a schism.
Much like the “transcending” retirees, those in the “regret” mindset find themselves stuck in the middle between their professional and retiree identities. Their choice seems more painful, caught between two identities that they fundamentally dislike. Two common characteristics include a form of pessimism regarding their future and a lack of attachment to their current professional identity.
Although they are often strongly critical of their former role, they would have stayed in their profession if they had been given the choice. In short, they are deeply ambivalent and in a subdued emotional state. The former working identity was known but unwelcome, whereas the anticipated identity as a retiree remains vague and induces anxiety.
Akiko reached an agreement with their law firm before leaving, allowing them to continue the activity of counsel and work with their team and clients. Knowing that they would remain with their organization, they did not prepare for retirement. “It’s a bit egotistical… What am I supposed to do? Be like the mastermind that liquidates itself?”
Akiko has maintained elements of their prior role, including the pension plan, office, and parking space under the building. People who “false start” struggle to let go of their attachments, move on, make themselves redundant, and properly plan for succession. There seems to be a denial of the need to bring new generations into the mix. They never really leave the starting blocks, hardly shedding their professional identity. Their day-to-day activities are very similar to the ones they have been doing until now. Instead of accepting their status as retirees, they deliberately, and often to their detriment, find themselves incapable of letting go of their profession.
Future retirees are often disoriented and relatively anxious about this new phase in their lives. As a result, organizations must carefully consider their approach to dealing with this segment of their talent pool. Should they opt to let them go completely, or do they see an advantage in maintaining a close relationship to benefit from their experience, knowledge, or network? To support and guide them toward the chosen strategy, organizations might consider the following initiatives:
Demystify procedures and guidelines
Given that retirement remains a taboo subject in many organizations, with expectations, procedures, and available options often unclear, it is important to be transparent about the company’s strategy.
Discussing the consequences of retirement together allows both parties to prepare. This can include conversations about financial considerations, access to the workplace, participation in events, and use of email. Financial incentives could be structured to discourage people from “hanging on” indefinitely.
Celebrate and honor the retiree
Organized programs can initiate and support the transition into retirement, as well as an event to say goodbye and honor their legacy. This experience can be positive for both those leaving the organization and their colleagues. Sabbaticals near the end of the executives’ tenures can provide a psychological release to explore new horizons. Assigning people ambassadorial roles at conferences and other visible and high-status events also sends an appropriate signal to the market and the individual.
Provide support
Providing people with time for reflection and creating a space for reflective practice is essential to help them prepare for retirement. Individual coaching or, better still, group coaching, can be invaluable in this regard. This allows them to reflect on their transition, verbalize their feelings and misgivings, and receive the advice and benchmarking they may need.
Despite being laden with anxiety, the so-called third half can be the most glorious chapter of life. Liberated from the shackles of insecurity and aware of their competencies and strengths, people can be empowered to contribute to broader social systems. Rather than perpetuating a taboo, healthy companies address the subject early, identify the specific mindset of each individual, and gently guide them towards a different and more constructive future.
Graham Ward is an adjunct professor of organizational behavior at INSEAD and the director of the Challenge of Leadership program for C-level executives. Isabelle Lebbe is a partner in the investment management practice of Arendt & Medernach.
The opinions expressed in Fortune.com commentary pieces are solely the views of their authors and do not necessarily reflect the opinions and beliefs of Fortune.
This story was originally featured on Fortune.com
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As Generation X edges closer to the traditional retirement age, with the oldest members born in 1965, a palpable sense of financial unpreparedness permeates this cohort.
Insight from a Fortune article featured on Yahoo Finance, fueled by responses from numerous Gen Xers, lays bare the anxieties many feel about their retirement readiness. In addition to being tagged with various monikers such as the “forgotten generation” and “the latchkey generation,” a significant portion of Gen X finds itself grappling with the reality of insufficient retirement savings.
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The challenge of securing a financially stable retirement is underscored by data shown in a report from the National Institute on Retirement Security, which signals a glaring disparity between the desired and actual savings among many Gen Xers. This sentiment is echoed in the Schroders 2023 U.S. Retirement Survey, revealing that over 60% of non-retired Gen Xers doubt their ability to achieve a comfortable retirement.
The survey highlights that the average Gen X household has amassed $40,000 in retirement savings, a figure drastically inadequate compared to the million-plus dollars financial experts recommend.
The narratives of individual Gen Xers further illustrate the depth of the retirement readiness crisis. “I’ve followed my dreams, as my generation was told to do, but found that some dreams cost more to follow than others,” writes one Gen Xer. “My savings are virtually nonexistent.” Another candidly shares, “I’ll likely die before I can retire. Fun stuff,” underscoring the dire financial outlook some face as they approach retirement.
Trending: If the average American household is a millionaire, why do people feel so broke?
These personal accounts shed light on the myriad challenges that have contributed to the financial predicament facing Gen X. From navigating economic downturns and market crashes to adjusting to the shift from pensions to 401(k) plans, Gen Xers have contended with significant financial hurdles. Additionally, they bear the burden of higher student loan debts and healthcare costs compared to previous generations.
However, not all Gen Xers view their retirement prospects through a lens of pessimism. Some have successfully navigated the economic landscape, achieving financial security and even early retirement. These success stories, though less common, provide a glimmer of hope and a different perspective on the retirement readiness of Gen X.
The broader picture, however, remains one of concern and calls for action. Industry experts like Deb Boyden from Schroders highlight the precarious position of Gen X, being the first generation to predominantly rely on 401(k) plans.
While Gen X may not be prepared overall as a generation, they can employ targeted strategies to strengthen their retirement readiness. Incorporating the wisdom and expertise of a financial adviser into a retirement planning strategy could bolster Generation X’s efforts to achieve a secure and comfortable retirement.
Financial advisers play a crucial role in navigating the complexities of retirement savings, offering tailored advice that considers an individual’s income, assets and retirement goals.
Diversification stands as a cornerstone strategy for Gen Xers to mitigate risk and enhance potential returns. By spreading investments across a variety of asset classes, such as stocks, bonds and real estate, individuals can protect their portfolios from significant losses tied to any single investment. This approach is complemented by exploring alternative investments, including commodities or private equity, which can offer growth opportunities outside traditional markets.
Maximizing retirement savings is important, particularly through vehicles like 401(k) plans and Individual Retirement Accounts (IRAs). For those with access to a 401(k), making the most of employer contributions and taking advantage of catch-up contributions for those over 50 can substantially increase retirement savings. IRAs, both Traditional and Roth, offer unique tax advantages that can be tailored to an individual’s financial situation, with Roth IRAs providing tax-free growth and withdrawals, beneficial for those expecting to be in a higher tax bracket in retirement.
For self-employed Gen Xers, the retirement saving landscape includes distinct options such as Solo 401(k)s and Simplified Employee Pension (SEP) IRAs. A Solo 401(k) plan allows self-employed individuals to make contributions both as an employer and employee, significantly increasing the potential for savings. SEP IRAs offer a straightforward, high-contribution limit option for entrepreneurs, while a Roth IRA remains a flexible choice for those with variable incomes. For those seeking to rapidly accelerate their retirement savings, defined benefit plans can provide a pathway to save large amounts in a short timeframe, particularly beneficial for older business owners focusing on catch-up contributions.
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*This information is not financial advice, and personalized guidance from a financial adviser is recommended for making well-informed decisions.
Jeannine Mancini has written about personal finance and investment for the past 13 years in a variety of publications including Zacks, The Nest and eHow. She is not a licensed financial adviser, and the content herein is for information purposes only and is not, and does not constitute or intend to constitute, investment advice or any investment service. While Mancini believes the information contained herein is reliable and derived from reliable sources, there is no representation, warranty or undertaking, stated or implied, as to the accuracy or completeness of the information.
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This article ‘I’ll Likely Die Before I Can Retire’ – Gen X, ‘The Forgotten Generation’ Is Struggling With ‘Virtually Nonexistent’ Retirement Accounts – The Average Gen Xer Has Only $40,000 Saved originally appeared on Benzinga.com
© 2024 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.
As retirement looms, a sense of unease grips Generation X, often considered “America’s neglected middle child,” which is facing a financial landscape that feels increasingly unstable. An AARP article highlighted the stories of people like freelance writer Gretchen Elhassani, 47, and university professor Mike Cundall Jr., 49, who represent the growing concern among their peers about securing a comfortable retirement.
Despite diligent savings efforts, including contributions to 401(k) plans and Roth individual retirement accounts (IRAs), the goal of a $5,000 monthly retirement income now seems fraught with uncertainty for Cundall and his wife, Amy Werner.
The unpredictability of the stock market, exemplified by the 2008 financial crisis’s dramatic impact on savings, along with inflation and escalating healthcare costs, compounds their worries. “All this has led me to believe that no matter how much we’ve saved, we’re not going to be able to retire and simply enjoy the golden years,” Cundall said, reflecting a sentiment widespread among his Generation X counterparts.
Dubbed “Generation anXious” by a Northwestern Mutual report, 55% of Gen Xers reportedly doubt their financial readiness for retirement, a perspective not as prevalent among other age cohorts. This generation faces a unique blend of challenges: A significant portion has meager retirement savings, with 35% having less than $10,000 set aside. The report underscores the acute anxiety pervading this demographic, struggling to envision a future that mirrors the stable retirements of previous generations.
According to the Schroders 2023 U.S. Retirement Survey, a substantial wealth gap exists within this generation. On average, Gen X workers believe they need over $1.1 million for a comfortable retirement but expect to have only around $660,000 saved. Over 60% of nonretired Gen Xers lack confidence in achieving their dream retirement.
The National Institute on Retirement Security (NIRS) and other studies confirm that Gen X’s financial preparedness for retirement is lacking. The typical Gen X household has only $40,000 saved for retirement, with a clear disparity between the top earners and the bottom quartile. This generation faces unique challenges, such as being the first to rely primarily on 401(k) plans instead of pensions, higher healthcare costs and the burden of student loan debt.
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Brian Ream, a Gen X member and managing principal at CliftonLarsonAllen, acknowledges the reality of this apprehension. “The anxiety is real, and I think it’s probably somewhat well placed,” he said, pointing to a general unpreparedness for retirement as traditionally conceived. This sentiment is echoed by wealth management adviser Thomas Jensen, who said, “On the financial side, our retirement’s going to look different than that of our parents. There’s some anxiety with that.”
Complicating matters, Gen Xers’ life choices and societal roles have delayed family planning and placed them in the “sandwich generation,” juggling the care of aging parents with child-rearing responsibilities. These factors, alongside the economic volatility and unique generational challenges, paint a picture of a generation at a crossroads, searching for alternative pathways to a secure and fulfilling retirement.
For those concerned about approaching retirement without ample savings, alternative investment platforms present practical options beyond traditional methods. Fractional real estate platforms, for example, enable people to invest in real estate with just $100, making it feasible to start building wealth through property. This method offers a straightforward way to diversify investment portfolios and work toward a more secure financial future. By investing in shares of rental homes and vacation properties, people can tap into real estate’s potential for passive income, providing a valuable avenue for enhancing retirement funds without necessitating large initial investments.
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This article ‘No Matter How Much We’ve Saved, We’re Not Going To Be Able To Retire’ — Generation X, ‘America’s Neglected Middle Child,’ Is Freaking Out About Retirement And Experts Say Rightfully So originally appeared on Benzinga.com
© 2024 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.
Industry watchers see the development advancing not only Ripple’s XRP token but also benefiting the wider crypto sector by adopting trusted financial industry models for security and cooperation.
In a move viewed as transformational for cross-border cryptocurrency storage and transfers, blockchain company Ripple‘s Metaco custody network has partnered with digital asset custodial provider Zodia Custody. The collaboration marks what Zodia CEO Julian Sawyer regards as ‘third generation’ custody. The partnership tries to form a regulatory complaint and seamless digital service that also has traditional finance standards.
Industry watchers see the development advancing not only Ripple’s XRP token but also benefiting the wider crypto sector by adopting trusted financial industry models for security and cooperation. Together, UK-based Zodia and Swiss firm Metaco want to deliver robust, regulated solutions for institutional participation under Ripple’s guidance. In commenting on this and illustrating how this cooperation will work, Sawyer said:
“I think of this as the third generation of crypto custody, where multiple custodians are linked together. For example, a client in Brazil, who is a custodian, may want to store some assets in the UK, and they’re not currently in the UK. So they could use us as their sub-custodian and use our regulatory permissions, etc. I think the multiple networks that are out there are really key in terms of linking custodians together, and linking custodians to exchanges and venues in a compliant manner.”
As a leading crypto custodian focused on institutional clients globally, Zodia boasts backing from Standard Chartered Bank which helps it to provide highly secure and compliant services. Its partnership with Ripple-owned Metaco will facilitate easier access to these offerings across borders. Observers also note surging institutional interest in custody networks following past crypto exchange violations and vulnerabilities just like the FTX crash of last year. By evolving to mimic traditional financial practices, their goal is to reduce counterparty and transactional hazards.
The collaboration is a vital step in linking digital asset custodians around the world while satisfying compliance requirements. This ‘third generation’ approach joins multiple regulated crypto custodians internationally for smooth cross-border asset movements.
By potentially positioning Ripple’s XRP token favorably for major global banks to easily adopt, the cooperation also reflects ongoing dedication to technological progress and confidence in XRP’s prospects. It positions the blockchain solution in a good spot in its goal to get more adoption by banks around the world. It also potentially furthers the evolution of digital asset protection and approves growth for compliant international frameworks.
Upon the release of such collaboration news, it is anticipated that community expectations regarding the respective token will soar. In this instance, analysts predict that this development will significantly impact the price of XRP, leading to a surge in both weekly and monthly highs.
Following a two-week retracement period, the price of XRP has begun to rebound. Over the past week, the price has experienced an increase of more than 5%, instilling hope among XRP holders. The news itself further bolsters this optimism and is expected to influence overall market sentiment.
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Meta, the parent company of Facebook and Instagram, announced a speech-generation AI model called Voicebox on June 16.
The company said Voicebox could generate speech from text and noted that the model could match an audio style based on a sample just two seconds long.
Voicebox can also convert a text sample to another language and, given a separate speech sample, read the translated text in the speaker’s original voice. This capability supports six languages: English, French, German, Spanish, Polish, and Portuguese.
The AI model can additionally edit existing recordings to remove background noise. More generally, it can create speech that is modeled on diverse speech samples.
Meta said that Voicebox and other similar AI models could allow virtual assistants and non-player characters in its metaverse to have realistic voices. The tool could also be of use to content creators and to users with accessibility needs, it said.
Meta said that Voicebox is currently a research project. It did not say when the feature might be publicly available, but it shared a demo video.
Meta announced several consumer AI tools earlier in June, revealed details about its AI chips in May, and discussed internal AI applications in an April investor call.
The post Meta unveils speech generation AI: Voicebox appeared first on CryptoSlate.