First Person: Will Gen-X Live Near Poverty in Retirement?

Yahoo Contributor Network

As I watch a growing number of baby boomers live at or near poverty in retirement, I wonder to myself whether that will be me in another 30 years. According to a recent study by Wells Fargo, more than a third of middle-class Americans could teeter on the edge of poverty during retirement. Millions of senior citizens, who are close to retiring or have already accepted social security early, are totally unprepared for retirement. I know I'm sometimes like the 52 percent of Americans surveyed who say they worry about paying their monthly bills. At the same time, I don't want to go from living paycheck-to-paycheck to living social security check-to-social security check. I figure I still have time to turn things around.

Working until I'm 80

According to the survey, 30 percent of Americans say they will need to work until they are 80. Unfortunately, 73 percent don't even believe their employer would provide them with a job into their 80s. I have no problem working far beyond my so-called "retirement age." Still, I need to be practical and realize that I may not be able to keep or find a job in my 60s and beyond. Sadly, many of my older friends who have been laid off in recent years say it's tough for older workers to be find respectable employment. Instead of banking on a job in my golden years, I'm investing in dividend-paying exchange traded funds (ETFs).

Estimating my retirement income

I am not ashamed to admit, I am a little foggy about how much I'll need in retirement. According to a recent article by U. S. News & World Report, I need to replace 80 percent of my income once I'm retired. If I save 18 percent of my income and get a 4 percent return on my investments, I could retire at age 68, according to calculations cited in the article. I would like to have at least a half a million when I retire. According to the Wells Fargo survey, middle-class Americans say they need a median of $300,000 to retire, but most only have about $25,000 saved.

Expecting to live longer

My sister, who can read palms, says my "life line" is particularly long. I don't need to believe in hocus pocus to know that women tend to live longer than men. That's probably why women surveyed were not as willing as the men to accept a reduction in social security or Medicare in order to reduce the country's deficit. Forty-four percent of men ages 40 to 59 said they would take a cut versus 26 percent of women. I think Generation-X men and women have already born the brunt of downsides to a down economy. If there is going to be a reduction of social security payments in the future, why delay the inevitable. Gen-X seniors 25 years from now shouldn't have to take a 25 percent cut in social security so that the current seniors get full benefits.

On the plus side, I am hopeful that the economy will improve by the time I retire in 25 years. I think people in my generation have some time to get their finances in order. By paying off my mortgage early, saving at least 10 to 20 percent for retirement and staying out of debt, I may be able to live a comfortable life in retirement instead of depending on my senior citizen discount card for a free meal.

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More from this contributor:

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