Step 2: Get your savings on track<\/p>\n
If, after crunching the numbers, you foresee a shortfall in savings, you\u2019ll want to course-correct. One way to turbocharge your nest egg<\/a> is by taking advantage of catch-up contributions to your retirement accounts. \ufeff<\/p>\n Most employees enrolled in workplace plans like a 401(k) or 403(b) can contribute up to $23,500 to those accounts in 2025, but those 50 and older can put in an additional $7,500\ufeff, for a total of $31,000. Workers ages 60 through 63 have a higher catch-up limit of $11,250, for a total contribution of $34,750. The individual retirement account (IRA) contribution limit in 2025 is $7,000, plus a $1,000 catch-up contribution for adults 50 and older.<\/p>\n If you still feel like you won\u2019t have enough saved for retirement, go back to the spending review from step one. \u201cIt can help identify where to pare back,\u201d Power says. Even simple cost-cutting measures\ufeff, like getting rid of some streaming subscriptions<\/a> or negotiating a lower rate with your internet provider<\/a>, can yield significant savings over time.<\/p>\n Step 3: Build a rock-solid emergency fund<\/p>\n Generation X is doing a slightly better job when it comes to stashing away money for emergency expenses<\/a>, with a median savings of $868 compared with $600 for Americans overall, according to a 2024 survey<\/a> by retirement plan provider Empower. That\u2019s a good start, but Naffa says Gen Xers should aim to have an emergency fund that can cover at least three to six months\u2019 worth of expenses.<\/p>\n Once you retire and no longer have a paycheck, an unexpected expense could force you to dip into your retirement account or rely on credit cards if you don\u2019t have a rainy-day fund. \u201cA solid emergency reserve acts as a safety net, keeping your retirement assets invested and working for you,\u201d Naffa says. Setting up monthly automatic transfers to a high-yield savings account now can help you build a sufficient emergency fund for retirement.\ufeff<\/p>\n Step 4: Wait as long as you can to claim Social Security<\/p>\n You can start drawing Social Security retirement benefits as early as age 62, meaning the oldest Gen Xers will become eligible in 2027. However, financial advisers typically recommend delaying your claim<\/a>, especially if you\u2019re counting on Social Security to cover a significant portion of your spending in retirement. \ufeff\ufeff<\/p>\n That\u2019s because \u201cthe longer you defer Social Security, the bigger the benefit,\u201d Power says. Claiming at 62 will permanently reduce your benefit by as much as 30 percent. You get your full benefit amount if you wait until full retirement age<\/a> \u2014 for Gen Xers, that\u2019s 67\ufeff \u2014 and a further boost of two-thirds of 1 percent for each month you delay until age 70. Waiting until then will get you your full benefit plus 24 percent, for life.<\/p>\n Step 5: Tackle debt<\/p>\n Gen X has an average of $30,879 in non-mortgage debt, more than any other generation, according to a 2024 Experian analysis<\/a>. Paying off debt can create space in your budget to increase your retirement contributions and prevent interest from chipping away at your nest egg.<\/p>\n \u201cPrioritizing the highest-interest-rate debt first is a good rule of thumb,\u201d Naffa says. Many financial advisers recommend taking out a lower-rate personal loan to pay off high-interest debt<\/a>, or transferring credit card balances to a card with a 0 percent introductory rate and paying it off before the intro rate expires.<\/p>\n