Born between 1965 and 1980, Generation Xers are no longer the “latchkey kids” and “slackers” of lore; they’ve reached middle-age and are saving for retirement.

Or are trying to, at any rate. In some ways, GenX is living up to its slacker image; 52% of them have saved less than $ 10,000 for retirement, and only 40% of those 45-54 have more than $ 50,000 saved for that purpose.

They’re also facing key challenges that are beyond their control, including a recession in which as much as 45% of their net wealth may have been lost. The rising expense of raising kids also figures prominently into their retirement savings. “Education spending is the biggest culprit,” notes Joshua Wilson of WorthPointe Wealth Management in Dallas, Texas. Rising costs for both housing and healthcare also hinder retirement savings.

Then there’s the old-fashioned search for status that supposedly bedeviled GenX’s boomer parents. Long-term saving requires the ability to distinguish between ‘wants’ and ‘needs’ in order to set aside money, and not all GenXers excel at making that distinction.

When planning for retirement, professionals advise starting early, with a 401(K), if one is available through an employer. For GenXers without a workplace plan, an IRA is the next best option. Mike Sena, CFP, a Wealth Manager based in the Atlanta area, tells Gen Xers who are just getting started to consider including in a portfolio such investments as “low-expense exchange traded funds that cover the market… small and large domestic, small and large international, emerging and frontier markets, global real estate and higher quality shorter term bonds, both domestic and international.”

For investors who want something tangible, income-producing real estate is an option. But caution is warranted. This type of investment makes personal demands on the investor, and is inappropriate for “someone who does not want the someone that doesn’t want the hassle, doesn’t want to take midnight phone calls of an overflowing toilet or leaking hot water heater, doesn’t want to take the time and effort to manage the property(s),” says Mike Sena. “You also need to have the temperament to evict a problem tenant.”

Many people have some savings but are not on track to meet their retirement needs. One good way to step up your game is to steadily increase your rate of saving. Justin D. Smith, CFA, CFP, a partner with Slayton Lewis Wealth Management in Chicago, recommends that people start small but slightly and steadily increase their 401(k) contribution every year. “You will notice the slight decrease in the first couple paychecks [each year], but you’ll quickly adjust to the new number.”

Smith outlines the impact of this measure for a 40-year-old with a balance of $ 30,000 in a 401(k) and who is contributing 5% of a $ 70,000 salary. “If they escalated their savings rate by just 1% each year for the next decade, reaching 15% at age 50, and maintained that 15% savings rate until 70, they would end up with about $ 1,742,000.” And that figure, he notes, represents twice the retirement savings of an individual who stuck with a 5% per year contribution. (Both examples assume an average annual return of 7%.)

There is a psychological component to savings. Some people have trouble with the discipline required to save over time. In that case, get an “accountability partner and tell them what you need to save more over time,” says Joshua Wilson. Just as having a workout partner helps people lose weight, the company he works for, WorthPointe Wealth Management, will “gradually increase the amount that they {clients} are saving at regular intervals.”

Mike Sena also notes the need to impose discipline. He recommends, “Combining automatic savings with a spending journal reinforces purposeful saving and investing.” These steps influence people to make better spending and saving decisions.

Many Americans value not being a burden on their children and staying independent in old age. Others just want to live in maximum comfort at the end of a demanding career. Whatever the reason, people need to start as young as possible to have adequate retirement savings.

With the pain of the Great Recession over for most Americans, Gen Xers now must know their spending and saving weaknesses in order to address them. Then, individuals can develop a thoughtful, disciplined approach to investing for the future. This type of unglamorous approach helps people meet the goal of a comfortable retirement.

The article How (and Why) Generation Xers Should Save for Retirement originally appeared on ValuePenguin.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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