Written by Hazel Secco, CFP®, CDFA®
Estimated reading time: 9 minutes
Life can feel like a constant juggling act as a Gen X. You’re raising children, supporting aging parents, managing a demanding career, and trying to make smart financial decisions—all at the same time. On some days, it may seem impossible to save for both retirement and college tuition without sacrificing one goal for the other.
Here’s the truth I want you to hear: you don’t have to choose.
Your future matters. Your children’s dreams matter. With the right strategy, it is possible to build a strong retirement plan while still supporting your children’s education. In this guide, we’ll explore practical ways to make your money work smarter—so you can move forward with clarity, confidence, and a plan that supports your whole family.
Table of contents
The Reality of Retirement Planning for Gen X
Let’s be honest. Retirement planning looks very different for Gen X than it did for our parents.
Unlike earlier generations, most Gen Xers aren’t relying on pensions. Instead, retirement has largely shifted to 401(k)s and self-funded savings, putting the responsibility squarely on your shoulders. That’s a lot to carry—especially while juggling careers, family responsibilities, and rising costs of living.
It’s no surprise that 60% of Gen Xers feel anxious about their finances, while only 28% feel hopeful. But here’s the encouraging part: it’s not too late to change the trajectory.
A strong retirement plan isn’t just about saving more. It’s about making smarter decisions with what you already have—and building a strategy that supports your future with confidence, not constant second-guessing.
Where Gen X Stands Today
Gen X carries more debt than any other generation. About one in four Gen Xers is still paying off student loans, and more than half worry they’ll never fully pay them off. Add to that the financial pressure of supporting children and aging parents, and it can feel like you’re being pulled in every direction at once.
And let’s not forget the financial storms Gen X has already weathered:
- The dot-com bubble
- The 2008 financial crisis
- The COVID-19 pandemic
- Today’s rising inflation and higher interest rates
It’s no wonder many Gen Xers feel behind, even after doing “everything right.”
Why Cookie-Cutter Advice Doesn’t Work Anymore
Traditional retirement advice wasn’t designed for Gen X. In many ways, Gen X is the first true “401(k) experiment” generation. Only about 20% have access to a pension, compared to most of their parents who retired with a guaranteed income.
Here’s the reality check:
- 35% of Gen Xers have less than $10,000 saved for retirement
- 18% haven’t started saving at all
Advice like “just max out your 401(k)” doesn’t reflect real life when you’re balancing debt, family obligations, and rising expenses all at once.
Finding Smart Ways to Fund College Dreams
You might think scholarships are out of reach—but here’s something many families don’t realize: local scholarships often have far less competition than national ones. When many school districts struggle to meet the growing demand for education funding, every scholarship opportunity matters.
Making Scholarships Work for You
Here’s a truth I’ve seen again and again: while everyone rushes to apply for large national awards, local communities are full of overlooked opportunities. Churches, nonprofits, employers, and hometown organizations often offer scholarships that far fewer students pursue.
Want to improve your odds? These strategies really work:
- Start looking in junior year, earlier than most families
- Focus on local scholarships first
- Keep grades steady and consistent
- Track leadership roles, volunteer work, and extracurriculars
- Apply early—many scholarships go to the first qualified applicants
Smart Ways to Earn College Credit Early
Here’s a strategy many parents wish they’d known sooner: AP classes and dual enrollment can significantly reduce college costs. AP credits may allow your child to skip expensive college courses. Even better, some motivated students earn an associate’s degree while still in high school through dual enrollment programs.
The savings can be substantial. Students enrolled in community college dual-enrollment programs spend significantly less than those who attend traditional four-year colleges—and they’re also more likely to graduate. Saving money and improving outcomes? That’s a win-win.
Finding Hidden Money for College
Tuition help can come from places you might not expect. Many employers—even large retail and fast-food companies—offer education assistance programs. The Federal Work-Study Program allows students to earn income while gaining experience.
Another often-missed opportunity: regional tuition exchange programs, which can cap out-of-state tuition at a fraction of the usual cost. That difference alone can save families tens of thousands of dollars over four years.
Every scholarship earned, every credit earned early, and every tuition discount adds up. And when scholarships cover part of the cost, your 529 savings stay intact—available for graduate school, another child, or even future Roth IRA flexibility.
A Balanced Approach That Works
A thoughtful savings strategy doesn’t have to be all-or-nothing. A balanced approach often includes:
- Never missing out on your employer match
- Starting 529 plans early to harness long-term growth
- Taking advantage of catch-up contributions when eligible
And here’s an important flexibility many parents don’t realize exists:
Starting in 2025, you can still roll up to $35,000 (lifetime limit) from an unused 529 plan into a Roth IRA, subject to IRS rules. This provides added flexibility and helps ease the fear of “over-saving” for college.
With the right strategy, your money can work harder—supporting your retirement and your children’s future, without forcing you to choose one over the other.
Smart Ways to Save on Taxes
Building wealth efficiently often starts with reducing taxes wherever possible.
Traditional IRAs allow your money to grow tax-deferred until retirement.
For 2025, you can contribute up to $7,000, with an additional $1,000 catch-up contribution if you’re age 50 or older.
Roth IRAs offer another powerful option. Contributions are made with after-tax dollars, but qualified withdrawals in retirement are tax-free.
For 2025, Roth IRA income limits are:
- Single filers:
- Full contribution up to $150,000
- Phased out between $150,000–$165,000
- Married filing jointly:
- Full contribution up to $236,000
- Phased out between $236,000–$246,000
Choosing between traditional and Roth accounts depends on your income today, your expected future tax bracket, and your long-term goals—but used strategically, they can significantly improve your retirement outlook.
The Power of 529 Plans
Think of 529 plans as a gift to your children’s future. These education savings accounts allow investments to grow tax-free when used for qualified education expenses.
The average family keeps a 529 plan for about six years, accumulating roughly $11,600. But starting earlier can dramatically change the outcome.
For example, opening a 529 plan before your child’s first birthday could allow the account to grow to around $52,000 by college time—more than double what you might accumulate if you waited until your child was 10. That’s the power of time and compound growth.
Making the Most of Your Workplace Benefits
Your 401(k) remains one of the most powerful tools for building long-term wealth.
For 2025, you can contribute up to $23,500 to your 401(k).
If you’re age 50 or older, you can still contribute an additional $7,500 in catch-up contributions.
(Note: enhanced catch-up contributions of $$11,250 for ages 60–63 are scheduled to begin in 2026.)
At a minimum, aim to contribute enough to receive your full employer match, which is often between 3% and 5% of your salary. That’s essentially free money and one of the easiest ways to boost your savings.
Putting Your Retirement First
Let’s talk about something that keeps many Gen X parents up at night: only a small percentage believe they have enough saved for retirement. That’s a sobering reality, but it doesn’t have to be your story.
Your Catch-Up Opportunities
There’s good news. If you’re between the ages of 60 and 63, upcoming “super catch-up” contributions allow you to save even more in the years when your earning power is often at its peak. Combined with standard catch-up contributions after age 50, these years can become your most powerful wealth-building window.
Think of this phase as your financial momentum season—when focused decisions can make a meaningful difference.
Making Your Money Work Harder
Retirement money shouldn’t sit idle. Yet many Gen X retirement dollars remain parked in cash, missing out on long-term growth. While cash has its place, growth assets are essential for keeping pace with inflation and supporting a long retirement.
Building on Your Progress
An emergency fund acts as your financial safety net. Even modest reserves can protect you from needing to tap retirement accounts when life throws a curveball. Many families aim for four to six months of expenses to maintain flexibility and peace of mind.
High-yield savings accounts and money market funds can help—but always check whether the interest rate is ongoing or just promotional. The goal is stability and smart growth.
Your Path Forward
Here’s the good news: momentum already exists. About 60% of Gen Xers have retirement accounts, and 82% of those are actively contributing. Many are doing the right things—but without a clear strategy, effort doesn’t always translate into confidence.
And one important truth to remember: Your children can borrow for college, but no one will lend you money for retirement.
That’s not meant to scare you. It’s meant to empower you.
With the right plan, you can build a secure retirement and support your children’s education. It starts with understanding where you are today and creating realistic, intentional goals that honor both your future and your family’s dreams.
When your money is saved intentionally, it can support two important goals at once—your retirement and your children’s education. The key is knowing which savings tools give you the most value for every dollar you set aside.
If you’re ready to create a strategy that brings clarity and confidence to both retirement and college planning, let’s talk. Schedule a 15-minute intro call and we’ll explore what’s possible for your family—together.
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References
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Note: This information is for educational purposes only and should not be considered individualized tax or financial advice. Tax laws and contribution limits are subject to change. Consult a qualified financial or tax professional before making decisions.