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    Why Generation X Military Families Need to Be Landlords

    Plan for military retirement now.

    You've probably heard it thrown around the media, but what does it really mean when it’s said that “You can’t count on Social Security for your retirement?”

    The Cato Institute posted an article stating that the Baby Boomers are “fleecing” Generation X. They explain that Boomers paid little in Social Security tax for the first part of their careers (almost half of the current tax rate) and will collect on the retirement income in such high amounts that their children, Generation X (mid-1960s to early 1980s), will not only pay a higher Social Security tax rate for their entire careers, but also may not even have an opportunity to collect Social Security for themselves.

    Let’s do some number crunching to better understand why it is too risky to count on Social Security as part of your retirement and what you can do to prepare instead. If it turns out that I’m proven wrong, then your Social Security check will simply be a wonderful bonus to make your retirement years golden ones.

    Let’s say that the 78 million Baby Boomers (mid-1940s to early 1960s) have already begun to retire over the last five years. This assumes a retirement age of 65, which isn’t necessarily the case anymore. We’ll just use these numbers as a guideline.

    Given these numbers, we can assume roughly 3.9 million Boomers will enter retirement age each year, so by the end of this current year, almost 20 million Boomers will have begun collecting Social Security. That means that approximately 50 million more Boomers will begin collecting Social Security before you ever see a dime of it, Generation X.

    The life expectancy for Boomers is age 84, which means that Boomers will collect Social Security for an average of 19 years. By 2030, they will all collect Social Security. The problem with this math is that we have neither the workforce nor the finances to both sustain the Boomers and continue to fund this system for the next generation.

    Once the Boomers retire, there are roughly 41 million in Generation X right behind them. While there are more Millennials behind Generation X, they have high unemployment rates and high debt-to-income ratios from a combination of student loans and wages that haven’t kept pace with inflation. It’s going to be tough for this group to pay for twenty years of Social Security payments for their enormous numbers of their parents and grandparents above them. That’s why economists have calculated that Social Security will start to run out in 2038, which is when Generation X will begin to retire.

    What, then?

    Fortunately, Generation X, you still have time to prepare.

    Known as cautious double-checkers and resilient, Generation X military families will need to engage these two key characteristics now if they want to have a secure retirement.

    Generation X military families have several options for retirement:

    • Military pension, if you retired or collect disability pay. Unfortunately for some Generation X military families, unless you received a disability retirement with pay or remained in the military for twenty years or more, you will not receive a penny in retirement income. This means that unless you used your early working years to invest in alternative plans for retirement, such as TSP or an IRA account, then you have some catching up to do.

    • Retirement pay from post-military life retirement. If you’ve already left the military, then you may have experienced a loss in your 401k, TSP, or other retirement plan during the recession, though most of those accounts have long since recovered. If they haven’t, you still have time to save, so make sure to prioritize savings now!

    • Social Security. Well, we already discussed the potential for this one…

    Make sure to look for our upcoming article on military retirement for Generation X for more tips on how to prepare with creative ways to pay off your mortgage.

    Looking to begin a new career after retirement? Click below for some great resources! 

    Career Resources for Veterans and Military Spouses


    Photo credit: Stuart Miles/ DollarPhotoClub

    Karina Gafford


    Karina Gafford

    Originally from Ireland, Karina has been a proud U.S. citizen since 2010. She and her husband have lived together in Florida, South Carolina, Virginia, and Texas. Karina is a Realtor with Keller Williams City View in San Antonio, a founder of Tutors By Base, and an active member in her military spouse community. She has served on many military spouse committees, and is currently the co-chapter leader of the MilSpo Project in San Antonio, a non-profit that supports military spouse business owners and entrepreneurs.

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