Personal Finance

How Gen X Can Boost Their Financial Prospects

With time and regular investments, you can grow your nest egg significantly. Image: Pixabay.

If you have 15 years until retirement and you can sock away $8,000 per year in an IRA, 401(k), or other account, and you earn the stock market's long-term average annual return of close to 10%, you can end up with about $280,000, a rather useful sum. If you can do so for 20 years, you might end up with $504,000!

Working longer, as many Gen Xers assume they will have to do, is another option. It won't work for all, but for some it will, and it offers the benefits of being able to earn and sock away more money, being able to let your investments keep growing without needing to start withdrawals yet, and being able to remain on your employer's health coverage, saving some medical costs.

Delaying when you start collecting Social Security benefits (which are initially available at age 62, at a reduced rate) can also help, as for each year beyond your normal retirement age that you delay, up to age 70, you can boost your monthly checks by a significant 8%.

A smart move for Gen Xers (and anyone else) worried about their financial future is to take the time to draft a retirement saving plan, estimating how much you'll need to amass, how you'll do so, how you'll spend money in retirement, and so on. Don't be afraid to seek professional help with this, either. What you pay for that can be more than offset by savings from improved financial strategies and better sleep at night. Favor fee-only financial advisors, whom you can find via referrals from friends or at the website of the National Association of Personal Financial Advisors.

No matter what your current financial situation is, with a little planning and action, you can make your future much better.

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The article How Gen X Can Boost Their Financial Prospects originally appeared on Fool.com.

Longtime Fool specialistSelena Maranjian,whom you canfollow on Twitter , owns no shares of any company mentioned in this article.Try any of our Foolish newsletter services free for 30 days . We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy .

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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