GreyWingFinancial.com believes one needs to knock out their debt, save, and then retire.
Chicago, IL (PRWEB) July 09, 2013
Grey Wing Financial announced its support of Fox Business’s article titled “Generation X: Don’t Approach retirement Like Your Peers”, released on July 2nd. Grey Wing Financial also offered additional tips for those preparing for retirement, both for Generation X subscribers and those who have not yet adequately prepared for retirement.
Fox Business writer, Richard Barrington, tackled the necessity of middle-aged people saving for their retirement and looking 20-30 years into the future to prepare. The article is aimed toward Generation X, citing a recently conducted study that found the majority of Generation X are wildly underprepared for retirement—saving only enough to replace 50 percent of income, versus the 99 percent of people only three generations ahead. This drastic 49 percent drop, Barrington argues, is motivated by 5 things. The first is Generation X’s susceptibility to following peers’ example rather than what is considered financially wise. Barrington urges Generation X to look to financial planners rather than their peers for financial advice and inspiration. The second and third motivations involve the desire to live well now, at the expense of living well later. Typically, Generation X is more concerned with having a more resplendent lifestyle now, and failing to sacrifice for the sake of the future. The fourth, Barrington argues, is making decisions based on panic. Upon realizing that they are unprepared, Generation X tends to invest poorly and wildly, rather than making rational, intentional financial decisions. Finally, Barrington identifies the fifth motivation as the decision to embrace debt. Accumulating debt and saving for retirement simultaneously may prove pointless as Barrington points out that debt-accrued interest is much higher than most savings returns. Failing to eliminate debt while saving for retirement may actually result in losing money. Global Life Insurance Company’s website stated that in 2012 the average debt per individual was $11,124.00. GreyWingFinancial.com believes one needs to knock out their debt, save, and then retire.
Barrington’s assertion that, over a three generation span, retirement savings have dropped by 49% is startling. While he synthesizes the study adequately, his article does not offer real-world solutions to fix the problem of Generation X not saving enough. With that in mind, Grey Wing Financial has stepped in to offer readers solutions to prepare for retirement.
The first problem with Generation X is identified as their likelihood to utilize income to keep up with the Joneses, rather than spend and save realistically. GreyWingFinancial.com believes the solution to this is simple: rather than looking to one’s friends or peers for financial advice or financial examples, talk to actual financial professionals to get a clear idea of what is necessary for retirement. The second and third obstacles to saving adequately for retirement were identified as living for now, rather than living for the future. Generation X is hesitant to sacrifice perhaps a new car or a vacation in order to save for retirement adequately. Again, the solution is simple, but may be difficult; Grey Wing Financial suggests rather than investing in an unnecessarily large house, consider downsizing. Rather than purchasing a brand new car, consider buying a used car. And rather than taking a vacation to an exotic location or theme park, consider going to a national park nearby and camping, in place of going to a hotel. While these sacrifices may seem too much now, Generation X’s standard of living will drop drastically upon retirement if some sacrifices are not made immediately. The fourth obstacle identified by Barrington is making decisions in a panic, versus making decisions wisely. The solution? Before making any drastic investment decisions or placing a vast amount of money in any stock, consult a financial professional. Take time to research options to find higher returns and a lower likelihood of failure. Rather than making decisions fueled by panic, take a deep breath, and make the changes necessary to succeed. Doing so ensures making a well-informed decision. The final obstacle identified by Barrington is the failure to eradicate debt. Generation X chooses to save for retirement alongside accrued debt. Grey Wing Financial knows that while it is always advisable to save for retirement, eliminating debt is equally important; allowing debt to survive past retirement will place a drain on all retirement savings and any potential income after retirement. It is advisable to allot a smaller portion of money for debt savings, and a larger portion of income to eradicate debt. The interest accrued over years of debt may effectively outweigh any returns on savings, actually causing the retiree to lose money. Again, this may be difficult, but certainly can be done—with patience and, once again, sacrifice.
GreyWingFinancial.com responded to Richard Barrington’s article, identifying the reasons why Generation X is so far behind in retirement saving, versus generations before them. Though Barrington’s observations were clearly identified, steps to change these obstacles were not offered. GreyWingFinancial.com stepped in to offer practical advice to change the unfortunate financial climate enveloping Generation X.
About Grey Wing Financial:
GreyWingFinancial.com is a website devoted to providing those interested in retirement or already engaging in retirement with up-to-date retirement advice and news.