America’s “middle child” generation, otherwise known as Generation X, is on the cusp of a new financial stage. Nearing retirement or heavily focused on building their retirement funds, those born between 1965 and 1980, have shifted their focus from day-to-day expense planning to building a portfolio that will carry them through retirement and other life changes. 

Financial planning tips for this cohort vary widely. Those born closer to the start of the generation may find themselves preparing for retirement, becoming empty nesters, or controlling the care and finances of a loved one. However, those nearer to the close out of the generation may be more focused on education planning, building a healthy and diversified portfolio, or even investing in real estate.

Though there are differences, there are also key similarities that everyone in this age group should consider. Here are our top 5 financial planning tips for Generation X.

1. Bulk Up Savings

According to Vanguard, the average 401(k) balance for Gen X is just $115,000. Some financial advisors recommend saving between 10-15% of your income from the time you start working until retirement – putting Gen X seriously behind financially. 

If you feel your retirement savings are off track, consider bulking up your savings starting today. Here are some helpful steps you can take to boost your retirement savings:

  • Increase your 401(k) contribution annually or with any salary increase
  • Match your employer’s 401(k) contribution
  • Set up automated transfers to your savings account each month
  • Contribute to an IRA – whether Roth or traditional
  • Meet with a Financial Advisor to determine how much you should save 
  • Reassess your monthly budget for savings opportunities
  • Diversify your portfolio for strategic tax benefits

Americans have shown to spend more than anticipated during retirement, so bulk up your savings now when you’re earning peak income. 

2. Use Apps to Manage Your Finances

Gen X may not be known to be the most tech savvy of the demographic cohorts, but using financial apps for purposes of budgeting, investing, and wealth management can help propel your finances to the next level. 

Take for example Mint, an online budget planner and tracker that gives you clear insight into where you are spending your money. Here you can track your spending into categories, find missed savings opportunities, and create financial goals to plan for the future. 

Another superb app for Gen X is YouNeedABudget. This powerful tool is accessed via the web with accompanying mobile apps. It’s not free, but has stronger budgeting and cash flow tools than Mint.  There’s a bit of a learning curve and the app requires you to be a bit more hands-on. However, the app is perfect for those who want full control of their budget because it teaches how to give “every dollar a job”.

As much as technology can help us stay connected to our finances, it can also have a dark side. Be watchful of scams on payment platforms, like Zelle, where scammers have recently run rampant. 

3. Kick Start Education Planning 

If you haven’t started education planning for your child, now is the time. A 529 Plan is the most common and financially rewarding tax-advantaged savings plan. These plans do not have income restrictions and offer tax-free withdrawals if used on education expenses. 

529 Plans are great for their flexibility, as most plans allow you to change the beneficiary, even to yourself. Have an accredited cooking or golf school that you’re interested in attending?  You might be able to pay for the class using a tax-free withdrawal from a 529. 

If a 529 Plan doesn’t sound right for your family, you may also want to consider a custodial account or traditional savings account which essentially hold all contributions and aren’t as restrictive with how the funds are used. 

With your children now off to college you may find yourself to be an empty nester. With fewer people in your home, you may find traditional living expenses, like groceries and electricity, are cut down significantly. If you aren’t ready to downsize completely, consider investing the expense gains into your retirement savings.

4. Be Mindful of Inflation

Inflation will likely remain elevated over the next year as the Fed continues to approve interest rate hikes to offset inflation. The interest rate spikes are expected to carry out over the next 18-months, but in the meantime you’ll notice you’re paying far more for everyday items like produce, meat, and furniture.  

Americans are concerned about inflation for several reasons. From one aspect, the more money you spend out of your personal budget, the less you may have to tuck away for savings. On the flip side, when you’ve reached retirement age the same products or services you were previously paying a premium for have increased by as much as 2% – essentially eroding the purchasing power of your savings. 

While the Fed works in overdrive to manage inflation, you can offset the side effects by taking initiative with changes like increasing your retirement contribution annually, diversifying your investments, and reducing living expenses. 

5. Review Your Estate Plan 

Estate planning is a must for Generation X. Not only does an estate plan protect your assets, it also describes how you want your assets dispersed when you pass. An estate plan presents a more robust plan of action and captures your assets that apply in both life and death, versus a will, which solely describes your assets and their allocations after you die. 

If you haven’t started estate planning yet, now is the time. The first step is gathering information on all of your assets, including cash, jewelry, property, investments, etc, and then who will be included within the estate plan, i.e. power of attorney, beneficiaries, advance healthcare directive (AHCD). Next step, meet with an attorney or estate planning service to carefully create your plan.

If you’ve already checked ‘estate planning’ off your list, it’s recommended that you review your documents regularly and update as needed. Experts recommend reviewing and updating your estate plan every 3-5 years or following any major life changes, like the birth or death of a family member, marriage, divorce, etc. 

As the life expectancy of Americans continues to increase this becomes a huge factor in your retirement planning. Longer retirement means you’ll likely need a more robust retirement plan.

If you don’t feel your current retirement plan can carry you to your max life expectancy or you aren’t even sure how long your retirement funds will last you, it’s time to call in your financial advisor. They’ll help adjust your investment strategy, if needed, to ensure you’re tucking away the appropriate funds for a plentiful retirement. 


Much of the financial work ahead of Gen Xers falls to retirement, but not all. Staying up to date with relevant financial news and financial planning tips can put you ahead of the curve when it comes to your finances. For more tips like this subscribe to Prudent Pulse, our weekly 1-minute video update that talks all things economy, market trends, and more. Subscribe now.

Jared Ong

Jared Ong oversees portfolio management, trading and technology. He previously worked at the Capital Group as a business systems analyst where he was integral in improving the trade operations group’s equity, fixed income, and foreign exchange trade processes. A graduate from Brigham Young University, Jared holds a Bachelors in Music. In his spare time, he enjoys composing and arranging music.