Health & Fitness
Gen X’ers Must Juggle a Variety of Financial Issues
By answering these questions, you can get a handle on all the financial issues you face at your stage of life.
If you’re part of “Generation X” — the age cohort born between the mid-1960s and the early 1980s — you’re probably in one of the busiest phases of your life, as you’re well into your working years and, at the same time, busy raising a family.
But just as you’re “multi-tasking” in your life, you’ll also need to address multiple financial goals.
In seeking to accomplish your key objectives, you may be asking yourself a variety of questions, including the following:
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- Should I contribute as much as possible to my IRA and 401(k)? In a word, yes. Your earnings on a traditional Individual Retirement Account (IRA) and a 401(k) grow on a tax-deferred basis, so your money can accumulate faster than it would if placed in an investment on which you paid taxes every year.
Plus, since you typically make 401(k) contributions with pretax dollars, the more you contribute, the lower your taxable income. And your traditional IRA contributions may be tax-deductible, depending on your income. If you meet income guidelines, you can contribute to a Roth IRA, which provides tax-free earnings, provided you meet certain conditions. - Should I put away money for my kids’ college education? It’s not easy to fund your retirement accounts plus save money for your children’s college education. Still, college is expensive, so if you feel strongly about helping to pay for the high costs of higher education, you may want to explore college funding vehicles, such as a 529 plan, which offers tax advantages.
However, you may want to consider putting any extra money into your investment portfolio to help as you work toward your retirement goals. Work with your financial advisor to determine what may be most appropriate for your portfolio.
By answering these questions, you can get a handle on all the financial issues you face at your stage of life. It may seem challenging, but taking the time now can help you better position yourself to reach your financial goals.
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This article was written by Edward Jones for use by your local Edward Jones Financial Advisor.