Saving for retirement isn't easy, no matter how old you are or how much you're earning. Roughly a quarter of U.S. households earning $150,000 or more per year say they're living paycheck to paycheck, according to a survey from Nielsen Global Consumer Insights, which demonstrates that saving is hard no matter your income level.
But there are some people who are struggling more than others. Those in Generation X, in particular, are feeling some financial anxiety, and cite preparing for retirement as their number one source of financial stress, according to a survey from Schwab Retirement Plan Services.
It's easy to see why workers are worried about their futures. The median amount Gen Xers have saved in their retirement accounts is just $66,000, a report from the Transamerica Center for Retirement Studies found, and only 14% of workers in this generation say they're "very confident" they'll be able to retire comfortably.
It's easy for other financial priorities to get in the way of planning for retirement. However, it's important to save what you can for the future, even when you're struggling to balance all your responsibilities. These are some of the most common obstacles Gen Xers face when saving for retirement -- as well as tips for overcoming them.
Gen Xers' most common retirement roadblocks
Generation X (generally defined as people in their late 30s to mid-50s) may have a particularly tough time saving for retirement because this is an age when several different financial priorities are all fighting for a share of your wallet. You may have a mortgage, kids still living at home, student loans, and maybe elderly parents who need help, too. With those responsibilities on top of all your normal bills, it can be tough to find any cash to spare.
But at the same time, your retirement age is creeping closer. Once you reach your 40s, it's extra important to start aggressively saving for retirement. Wait any longer, and it will be tough to catch up.
One of the biggest challenges Generation X workers face when planning for retirement is balancing debt with saving for the future. More than four in 10 workers say they are more focused on paying off debt than on saving for retirement, according to Schwab Retirement Plan Services.
The second most common thing holding Gen Xers back from saving is unexpected expenses, followed by credit card debt, monthly bills, and helping their children pay for college. In addition, 11% of survey respondents said that their own student loans are making it tough to save for retirement.
All of these expenses are important, and some are unavoidable. You never know when unexpected expenses are going to pop up, and you can't avoid paying the mortgage and other monthly bills. That said, there are ways to limit these expenses so you still have some cash left over to stash in your retirement fund.
Saving more money when you're strapped for cash
One way to save more for the future is to establish a robust emergency fund with enough money to cover at least three to six months' worth of expenses. It might be tough at first to build your emergency savings if you don't have much cash to spare, but saving just a little every month can go a long way.
Once you have your rainy day fund established, you'll have somewhere to go when unexpected expenses inevitably arise. That way, you can still save for retirement without worrying about how unplanned costs will affect your future.
Paying down debt is also crucial if you want to free up some of your cash. When paying down debt, start with the type with the highest interest rate (even if it's not the type with the highest balance). The more you're paying in interest, the longer it will take to pay your debt down -- and eventually you could get caught up in a vicious cycle where most of your monthly payment goes toward interest, not the principal amount.
If you have credit card debt, consider opening a balance transfer card to take advantage of a 0% introductory APR. Balance transfer cards can help you pay off your debt faster, but be sure to read the fine print before you open a new account. If you can't pay off your full balance before the introductory period ends, you'll usually be slapped with a sky-high interest rate -- which could cost you even more than you're currently paying. But if you choose the right card and work hard to pay off your balance, a balance transfer card can significantly help reduce your credit card debt.
One other way to help save more for retirement is to simply budget retirement saving into your monthly financial plan. Oftentimes people will shove retirement saving to the bottom of their priority list because there aren't any immediate consequences if you don't save. But that only makes it more likely that you'll reach retirement age without nearly enough cash to last the rest of your life. When you treat retirement saving as if it's another bill you have to pay every month, you can force yourself to set at least some money aside -- even if it means making sacrifices elsewhere in your budget.
It's safe to say most people probably don't particularly enjoy saving for retirement, but it's something everyone has to do. Even though it can be a challenge, if you're strategic about your financial priorities and making sacrifices to save more now, your future self will thank you.