Someone with no job has a bigger hill to climb of course. In a past post we dissected the numbers of a couple each working a total of 60 hours per week in two low paying jobs. This would be a difficult existence but that adds up to around $45,000 per year which in the context we’re talking about is pretty good. This scenario could allow for putting aside a little for retirement depending on location and willingness to live below ones means.
This scenario is unlikely to result in accumulating enough wealth for retirement but could result in accumulating a meaningful chunk especially for Gen X-ers with many years to go before getting to what is considered normal retirement age. A $300,000 nest egg would generate $1000/month (assumes a 4% annual withdrawal rate) which in the context of a $3000 monthly lifestyle seems like a decent chunk plus Social Security.
We’ve also written a couple of hundred posts about figuring a way to generate an income in retirement doing something you love. When my 80 year old neighbor with the backhoe (he is 83 now) and his wife were in their 50’s and he was newly retired from the police department they worked as caretakers on a wealthy celebrity’s compound in Florida for a few years before coming back to Arizona to take more backhoe hours at $60 per hour than they needed. The caretaking situation required some handyman skills and an ability to interact with very different types of people in return for a decent income and a free place to stay.
The solutions are endless and Gen X-ers who are struggling but fortunately they have the time to find the right answer for themselves.
There is also an implication for financial professionals (FP’s) in this. The industry might struggle if there is a gap between boomers and Gen Y that the X-ers do not fill. This could lead to a whole new series of discussions that FP’s will need to be ready to have in order to sustain their practices.
This article was written by AdvisorShares ETF Strategist Roger Nusbaum.