Why Gen Xers Need to Rethink Retirement Planning

For more financial retirement tips, check out Chatzky’s new book, “The Forever Paycheck,” in collaboration with AARP Books. Visit: aarp.org/foreverpaycheck

Key takeaways

• Jean Chatzky says many Gen Xers rely on personal retirement savings.
• A retirement income plan starts with monthly needs minus Social Security.
• Annuities, bond ladders and CD ladders can provide monthly income.

Summary

Jean Chatzky discusses retirement planning for Gen Xers and addresses the anxiety many people feel about moving from saving money to spending it in retirement. She explains that unlike previous generations with pensions, many Gen Xers depend on 401(k)s, Roth IRAs and brokerage accounts to fund their future.

Chatzky outlines a three-step approach for creating a “forever paycheck.” First, determine the monthly income needed for a comfortable lifestyle. Next, subtract expected Social Security benefits. Then, invest a portion of savings in income-producing options such as annuities, bond ladders or CD ladders to generate predictable monthly payments.

The key takeaways and summary were created with the assistance of generative AI. An AARP editor reviewed and refined the content for accuracy and clarity.

Full transcript

[0:00:00] When Gen Xers hear the word retirement, the first feeling that comes up might be anxiety.

[0:00:06] Unlike our parents, many of us don’t have pensions.

[0:00:09] Instead, we were told we need to save on our own:

[0:00:15] 401ks, Roth IRAs, brokerage accounts.

[0:00:18] It’s sort of like having an expensive bottle of wine or some fancy chocolates.

[0:00:24] You’ve been saving it for so long and now you’re just supposed to open it?

[0:00:29] Is there a way to enjoy your retirement savings without guilt or fear?

[0:00:35] The answer is yes: by creating a steady, predictable monthly income, which I explain in detail in my book, The Forever Paycheck.

[0:00:45] Here’s the basic three-step idea.

[0:00:48] First, figure out the monthly income you need to live comfortably.

[0:00:53] Next, subtract your monthly Social Security payment.

[0:00:57] Whatever’s left, that’s the amount your savings needs to pay you every month.

[0:01:03] Here’s how you do that.

[0:01:05] Make sure a portion of the savings is invested in a way that will produce income that you can receive on a monthly basis.

[0:01:13] That’s something you can do with annuities or a bond or CD ladder.

[0:01:18] I break down every option in my book, so check it out at aarp.org/foreverpaycheck