How Financial Literacy Can Help Secure Gen X’s Future

When it comes to real-world education, financial literacy is a vital subject–one that Generation X has great potential to wield in order to help maximize their quality of life in retirement.

A knowledge gap in financial literacy would undermine the prospects of any generation. But its consequences can be especially alarming for Gen Xers, many of whom may be already strained by expenses such as mortgage payments and college tuitions, coupled with the challenges of managing their careers while some may also be caring for aging parents and supporting boomerang kids. It’s a lot to ask.

Another thing that can add to their stress is if they do not have a pension to fall back on, which leaves saving for retirement squarely on them.

Financial illiteracy carries a heavy toll that can increase in times of economic turmoil. In 2022 alone, a lack of financial knowledge cost Americans an estimated $436 billion, with money lost through common mistakes like incurring overdraft fees and credit card interest, and that’s not sustainable. Trying to plan for the financial future without a firm grasp on the basics is not a luxury this cohort can afford.

"The good news is it can be easy to get up-to-speed, especially if you're working with a financial professional," says Chris Grady, EVP and Head of Retail Sales at Athene, a leading retirement services company.

Like a lot of fields, the financial world is filled with complex concepts but also rife with jargon that can make things seem muddier than they really are. That’s where a good financial professional comes in. In addition to help distilling complicated topics, making them readily accessible, they cut through lingo so that clients can deepen their knowledge and improve their communication skills around their finances.

Consumers keen to discuss their financial future with family members and financial professionals can often be hindered by their own financial illiteracy. Grady offers the following strategies to help get those crucial conversations back on track and build financial confidence:

1. Write down your short- and long-term goals: Figure out what your individual needs and wants are in your ideal retirement, and think about how these might change over time.
2. Know your appetite for risk: Economic volatility can make you want to reevaluate your investment strategy and your comfort level with risk. Thinking through your level of risk tolerance can help you figure out a plan that works best for you.
3. Consider products that help reduce exposure to volatile markets: Annuities are one option that can bolster confidence with their unique ability to help protect retirement savings and guarantee lifetime income.
4. Do your own research: If a financial product is recommended to you, learn more about it before making any decisions so you're well informed and can ask more questions if clarification is needed.

For all the obstacles they may face, Gen Xers also have a key opportunity to benefit from a massive wealth transfer as an estimated $70 trillion of assets is handed down by the Baby Boomer generation, according to Bloomberg. This wealth handover could help support Gen Xers, who indicate that more money and income would help boost their confidence in their ability to meet the financial obligations of caretaking, while ensuring they are saving enough for retirement, according to a survey from Athene.

With the right guidance, Grady believes that Gen X can feel more confident about achieving their retirement goals.

“With more than a decade or two left in the workforce, Gen X still has the potential to take control, save more, and enjoy the retirement of their dreams,” he says.