Retirement Retirement Planning

15 Worst Retirement Mistakes Gen X Keeps Making

Avoid these financial missteps to set yourself up for a secure and stress-free retirement.

By Adam Palasciano

Edited by Chris Kissell

Updated Feb. 5, 2025

As members of Generation X approach retirement age, careful financial planning becomes more critical than ever.

Born between 1965 and 1980, many in this group are balancing competing priorities — such as supporting aging parents and helping adult children — while trying to secure their own retirement. Making the wrong money moves at this stage can derail the best-laid plans.

But the good news is that it's not too late to adjust course. If you're working to solidify your retirement plan, here are 15 mistakes to steer clear of as you approach this phase of life.

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Running up credit card debt

High-interest credit card debt can drain your finances quickly, making it harder to save for retirement.

Credit card balances snowball if left unchecked, so it's crucial to prioritize paying off high-interest debt to free up more money for your future.

If you get out of debt now, it will help improve your credit score, which could lead to better financial options now and during retirement.

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Not maxing out your retirement accounts

Failing to contribute the maximum to your 401(k) or IRA is a missed opportunity to put away tax-advantaged savings for the future.

In 2025, you can contribute up to $23,500 to a 401(k) or $7,000 to an IRA. Take full advantage of this chance to grow your retirement nest egg. Every additional dollar invested now has the potential to grow over time.

Not taking advantage of catch-up contributions in 401(k)s and IRAs

If you're 50 or older, you can make catch-up contributions to bolster retirement savings. In 2025, this means adding an extra $7,500 to your 401(k) and $1,000 to your IRA.

In addition, adults between the ages of 60 and 63 can make an even larger catch-up contribution to a 401(k) or similar retirement plan — $11,250.

These additional contributions can make a significant difference to the size of your retirement fund over time. The closer you are to retirement, the more critical these catch-up contributions become.

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With that amount, you could build a relatively diverse portfolio with an investment of $50 in a big tech stock, $50 in a retail stock, $50 in an energy stock, $50 in a manufacturing stock, and $50 in a bank.¹ This content is for informational purposes only, you should not construe any such information as legal, tax, investment, financial, or other advice. To get stock reward, new customers need to sign up, get approved, and link their bank account. Stock rewards shares cannot be sold until 3 trading days after the reward is granted and the cash value of the stock rewards may not be withdrawn for 30 days after the reward is claimed. Stock rewards not claimed within 60 days may expire. See full terms and conditions at <a href="https://robinhood.com/us/en/support/articles/open-account-pick-your-stock/">rbnhd.co/freestock</a>. Fractional shares are illiquid outside of Robinhood and are not transferable. Not all securities available through Robinhood are eligible for fractional share orders. For a complete explanation of conditions, restrictions and limitations associated with fractional shares, see the Fractional Shares section of our Customer Agreement. Robinhood Gold is offered through Robinhood Financial LLC and is a membership offering premium services available for a fee.

Even better news? Add a Robinhood Gold membership, and you’ll get access to 4.25% (as of 11/15/24) APY² Annual Percentage Yield. Rate valid as of April 12, 2024. To earn interest, a cash balance is needed. If you have a margin balance, there is no cash balance to earn interest. Interest rates for cash sweep and margin investing can change at any time. Fees may reduce interest earnings. on your uninvested cash³ Interest is earned on uninvested cash swept from your brokerage account to partner banks. Partner banks pay interest on your swept cash, minus any fees paid to Robinhood. As of Nov 15, 2023, the Annual Percentage Yield (APY) that you will receive is 1.5%, or 5% for Gold customers. The APY might change at any time at the partner banks' or Robinhood's discretion. Additionally, any fees Robinhood receives may vary and are subject to change. Neither Robinhood Financial LLC nor any of its affiliates are banks. All investments involve risk and loss of principal is possible. Robinhood Financial LLC (member SIPC), is a registered broker dealer. and the ability to buy and sell stocks 24 hours a day, 5 days a week.

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Taking money out of a retirement account early

Withdrawing money from your retirement accounts before age 59½ typically incurs a 10% penalty and taxes, severely depleting savings.

Instead, explore other options to access cash, such as a home equity line of credit or personal loan. Preserving retirement funds ensures they're available when you truly need them during your golden years.

Making late payments

Late payments on credit cards or loans can hurt your credit score, and you might face higher interest rates and extra fees.

Set up auto-pay or calendar reminders to ensure all bills are paid on time so you keep your credit in good standing. Good payment habits now can save you thousands of dollars in interest and penalties over time.

Giving too much money to adult children

While it's natural to want to support adult children, overextending yourself financially can jeopardize retirement security.

Set boundaries and consider helping in non-monetary ways, such as offering advice. And remember, securing your financial future also sets a good example for your children.

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Not taking advantage of catch-up contributions in an HSA

Papers about Health savings account (HSA) on a desk

In 2025, health savings accounts (HSAs) allow you to contribute either $4,300 (for singles) or $8,550 (for those with a family plan). In addition, those who are 55 and older can contribute an extra $1,000 annually.

Maxing out your HSA contributions can create savings that may help you cover health care costs in retirement while offering tax advantages both today and in the future.

Ignoring the need for — or not updating — an estate plan

If you don't have an estate plan — or if you haven't updated the one you do have — your assets may not be distributed according to your wishes, creating legal and financial complications for loved ones.

Work with an attorney to draft a will, establish a health care directive, and assign power of attorney. Having an up-to-date estate plan in place ensures peace of mind for both you and your family.

Giving too much to charity

While supporting causes you care about is commendable, donating too much can strain your finances.

Set a budget for charitable contributions and stick to it, ensuring your generosity doesn't hinder retirement goals. Consider planned giving or trusts as tax-efficient ways to contribute.

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This powerful combination checking + savings account from SoFi® allows you to earn up to a $300 bonus with direct deposit and grow your money with up to 3.80% APY.⁴ New and existing Checking and Savings members who have not previously enrolled in Direct Deposit with SoFi are eligible to earn a cash bonus of either $50 (with at least $1,000 total Direct Deposits received during the Direct Deposit Bonus Period) OR $300 (with at least $5,000 total Direct Deposits received during the Direct Deposit Bonus Period). Cash bonus will be based on the total amount of Direct Deposit. Direct Deposit Promotion begins on 12/7/2023 and will be available through 1/31/2026. See full bonus and annual percentage yield (APY) terms at <a href="sofi.com/banking#1">sofi.com/banking#1</a>. SoFi Checking and Savings is offered through SoFi Bank, N.A., Member FDIC. SoFi members who enroll in SoFi Plus with Direct Deposit or by paying the SoFi Plus Subscription Fee every 30 days or with $5,000 or more in Qualifying Deposits during the 30-Day Evaluation Period can earn 3.80% annual percentage yield (APY) on savings balances (including Vaults) and 0.50% APY on checking balances. There is no minimum Direct Deposit amount required to qualify for the stated interest rate. Members without either SoFi Plus or Qualifying Deposits, during the 30-Day Evaluation Period will earn 1.00% APY on savings balances (including Vaults) and 0.50% APY on checking balances. Only SoFi Plus members are eligible for other SoFi Plus benefits. Interest rates are variable and subject to change at any time. These rates are current as of Jan. 24, 2025. There is no minimum balance requirement. Additional information can be found at <a href="http://www.sofi.com/legal/banking-rate-sheet">http://www.sofi.com/legal/banking-rate-sheet</a>. See the SoFi Plus Terms and Conditions at <a href="https://www.sofi.com/terms-of-use/#plus">https://www.sofi.com/terms-of-use/#plus</a>.

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SoFi has no account or overdraft fees⁵ Overdraft Coverage is limited to $50 on debit card purchases only and is an account benefit available to customers with direct deposits of $1,000 or more during the current 30-day Evaluation Period as determined by SoFi Bank, N.A.  The 30-Day Evaluation Period refers to the "Start Date" and "End Date" set forth on the APY Details page of your account, which comprises a period of 30 calendar days (the "30-Day Evaluation Period"). You can access the APY Details page at any time by logging into your SoFi account on the SoFi mobile app or SoFi website and selecting either (i) Banking > Savings > Current APY or (ii) Banking > Checking > Current APY.  Members with a prior history of non-repayment of negative balances are ineligible for Overdraft Coverage. and additional FDIC insurance up to $2 million on deposits is available through a seamless network of participating banks.⁶ We do not charge any account, service or maintenance fees for SoFi Checking and Savings. We do charge a transaction fee to process each outgoing wire transfer. SoFi does not charge a fee for incoming wire transfers, however the sending bank may charge a fee. Our fee policy is subject to change at any time. See the SoFi Checking & Savings Fee Sheet for details at <a href="http://sofi.com/legal/banking-fees/">sofi.com/legal/banking-fees/</a> ⁷ SoFi Bank is a member FDIC and does not provide more than $250,000 of FDIC insurance per legal category of account ownership, as described in the FDIC’s regulations. Any additional FDIC insurance is provided by the SoFi Insured Deposit Program. Deposits may be insured up to $2M through participation in the program. See full terms at <a href="http://sofi.com/banking/fdic/terms">SoFi.com/banking/fdic/terms</a> See list of participating banks at <a href="http://sofi.com/banking/fdic/receivingbanks">SoFi.com/banking/fdic/receivingbanks</a> Plus, you can receive your paycheck up to 2 days early.⁸ Early access to direct deposit funds is based on the timing in which we receive notice of impending payment from the Federal Reserve, which is typically up to two days before the scheduled payment date, but may vary.

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SoFi is a Member, FDIC. ⁷ SoFi Bank is a member FDIC and does not provide more than $250,000 of FDIC insurance per legal category of account ownership, as described in the FDIC’s regulations. Any additional FDIC insurance is provided by the SoFi Insured Deposit Program. Deposits may be insured up to $2M through participation in the program. See full terms at <a href="http://sofi.com/banking/fdic/terms">SoFi.com/banking/fdic/terms</a> See list of participating banks at <a href="http://sofi.com/banking/fdic/receivingbanks">SoFi.com/banking/fdic/receivingbanks</a>

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Trying to keep up with the Joneses

woman holding car keys with happy expression

If you live beyond your means in an attempt to keep up with neighbors or peers, you're setting yourself up for financial stress.

Focus on your own goals and values instead of trying to maintain appearances. Keeping money priorities straight will benefit your long-term financial security.

Continuing to impulse shop

Spontaneous purchases can derail your budget and prevent you from saving adequately for retirement.

Combat impulse shopping by sticking to a list and giving yourself a cooling-off period before making unplanned buys.

Alternatively, you can follow the 24-hour rule for purchases: Wait one day before purchasing what's in your online shopping cart or buying an extra item in the store. During this period of restraint, you might realize you don't need the item after all.

Taking a DIY approach to finances

Managing your finances without professional guidance can lead to costly mistakes. A financial advisor can provide personalized advice to help you maximize savings and avoid pitfalls.

Professional advice often uncovers opportunities you might otherwise miss.

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Not taking enough risk

Risk and reward bags on a basic balance scale

Being overly conservative with investments may limit your retirement savings potential.

While it's essential to protect your principal, allocating a portion of your portfolio to growth-oriented assets like stocks can help you outpace inflation. Balancing risk with reward is crucial for building long-term wealth.

Not diversifying your investments

Putting all your eggs in one basket — whether it's a single stock, industry, or asset class — can leave you vulnerable to market fluctuations.

Spread investments across various sectors and asset types to minimize risk. A diversified portfolio often can better withstand economic downturns.

Underestimating your longevity

If you fail to account for the fact that life expectancy has steadily increased, you very well may outlive your retirement savings.

Planning for a 20-year retirement may leave you financially vulnerable if you live longer than expected. Consider options such annuities to ensure you get ahead financially in a way that makes your savings last for the long haul.

Bottom line

Securing a comfortable retirement starts with avoiding costly financial mistakes. By recognizing these potential pitfalls and taking proactive steps to prevent them, you can set yourself up for a stress-free retirement.

Are you ready to make the changes necessary to prepare for retirement and achieve financial peace of mind? Now is the perfect time to take control of your future.

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