Chris Taylor at NBC News wrote about the financial squeeze Gen X faces in its 50s: peak earning years that also carry the highest risk of a career setback or a health problem, arriving at the same time as college bills for kids and care needs for aging parents. It is the decade where retirement savings should accelerate and often stalls instead.
The pattern I see with clients in this stretch is that the 50s get planned as if they were the 40s with more money. They are not. Income is higher, but so is the chance of an involuntary job change, and a layoff at 56 is much harder to recover from than one at 36. Health events start showing up in the household, sometimes the client's own and sometimes a parent's, and the cost lands on the same balance sheet either way.
Three things I tell people in this window. Capture the catch-up contributions the tax code gives you at 50 and the larger ones at 60 to 63, because these are the last high-income years to use them. Keep a larger cash reserve than you did at 40, because the downside of a gap in employment is bigger now. And put a number on what you are willing to spend supporting adult children and parents, because unlimited help at 55 becomes a retirement shortfall at 70.
The squeeze is real. The response is to plan the decade for what it is, not for what the last one was.
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