The oldest Gen Xers will turn 60 in 2025, which means they’re two years away from qualifying for Social Security and a half-decade away from the traditional retirement age of 65. This puts additional pressure on them to prepare financially for their golden years.
For You: Cutting Expenses for Retirement? Here’s the No. 1 Thing To Get Rid Of First
Be Aware: Avoid This Retirement Savings Mistake That’s Costing Americans Up To $300K
While some Gen Xers sound confident they’ll have plenty of money to retire on, most still have a lot of work to do.
About 15% of Gen Xers believe they will build up a $1 million retirement fund, according to a new GOBankingRates survey. A nest egg of that size is enough to fund a decent retirement in much of the country.
The problem is, only 5% of younger Gen Xers, ages 45 to 54, have more than $500,000 in their 401(k) accounts — meaning 95% aren’t even halfway to $1 million. About three-quarters (74%) have $100,000 or less saved up. The numbers aren’t much better for older Gen Xers, ages 55 to 59. Only 7% have more than $500,000 in their 401(k)s, while 76% have $100,000 or less saved up.
If you’re a Gen Xer and want to build a retirement fund of $1 million or more, here are five ways to help make it happen.
Delay Retirement
Many Americans still retire around the age of 65, but that doesn’t mean it’s the best option for everyone. If you aim to retire with $1 million and have a long way to go to get there, consider delaying retirement.
This will give you more time to earn a steady paycheck and contribute to your retirement fund.
Consider This: 7 Things You’ll Be Happy You Downgraded in Retirement
Max Out Your Retirement Plan Contributions
If you haven’t done so already, you should max out your retirement plan contributions as soon as possible — especially if your employer matches your contribution.
In 2025, employees with a traditional 401(k) and similar plans can contribute up to $23,500 for the year. That’s up from $23,000 in 2024. If you are 50 or older, the “catch-up” contribution is an additional $7,500.
The maximum you can contribute to an IRA in 2025 remains at $7,000 a year, though if you are 50 or older, you get an additional catch-up contribution of $1,000 to bring the total to $8,000.
Downsize
You don’t have to wait until retirement to start downsizing your home, possessions — and expenses. If you’re already an empty nester, you can move into a smaller, more affordable home and put the savings into your retirement fund.
You can also sell excess possessions to raise more cash.
Boost Your Income
Many millionaires get that way by earning a lot of money through work, investments or some combination of the two. If your current income won’t allow you to sock away enough money to reach your $1 million savings goal, then the obvious answer is to find more income.
One option is get a side hustle or part-time job and put the extra earnings into savings/investments.
Pay Off Your Mortgage (And Other Debts)
One of the best ways to free up more money for retirement savings is to get rid of your debts — especially your mortgage. If you have the financial wherewithal to do so, make an extra payment toward your mortgage principle every month to speed up the time it takes to pay the loan in full.
You’ll also reduce the amount of interest you eventually pay on the mortgage, which saves money that can be put to better use.
If you have high-interest debt — like credit cards, car loans or personal loans — consider paying that off first, then focusing on your mortgage and any student debt you still have. In addition to freeing up more money for your nest egg, getting rid of debt leads to much less financial stress.
More From GOBankingRates
- Barbara Corcoran: If Mortgage Rates Hit This Number, the Market Will "Go Ballistic"
- 13 Cheap Cryptocurrencies With the Highest Potential Upside for You
- These 11 Rare Coins Sold for Over $1 Million
- I'm a Retirement Planner: 7 Ways I Am Guiding Clients Now That Trump Won
This article originally appeared on GOBankingRates.com: 15% of Gen X Believes They’ll Have $1 Million in Retirement: 5 Ways To Make It Happen
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
