Inflation Is Making it Harder for Gen Xers to Save for Retirement. Here's How to Get Around That

There's lots for Gen Xers to be proud of. They roamed the streets as kids and managed to self-entertain rather than rely on screens. They navigated their teenage years and young adulthood without cellphones (or, in some cases, the internet). And they never stopped questioning authority, even when it got them detention.

OK, maybe that last one only applies to some people. But either way, Gen Xers are in an interesting situation today, financially speaking.

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Older Gen Xers may be right on the cusp of retirement. Younger Gen Xers may still have a good 20 years in the workforce to go.

But either way, the pressure's on for Gen Xers to be funding their nest eggs. And recent data from Allianz shows they're struggling to do so for one big reason.

Inflation is messing with Gen Xers' savings

In recent years, inflation has been stubbornly elevated, forcing consumers to pay more for groceries, utilities, and just about everything. But it's not just that inflation has been, in a word, annoying. It's also impeded Gen Xers from funding their IRAs and 401(k)s.

In fact, 70% of Gen Xers say they have not been able to contribute as much to a retirement plan as they'd like due to inflation, says Allianz. And that's problematic on a number of levels.

First, older Gen Xers who are behind on savings may not have much time to catch up. Also, Gen Xers who are limited in what they can contribute to a 401(k) plan risk missing out partially or fully on a workplace match. So it's important that Gen Xers find ways to continue saving, even as inflation rears its ugly head.

How to contribute to retirement savings when living costs are high

The problem with this bout of sticky inflation is that it may be driving costs up in just about every aspect of life. And if you're a Gen Xer who's in the unenviable position of caring for kids or shuttling kids off to college while helping to support aging parents, you may be feeling exceptionally squeezed.

If you're falling behind on retirement savings, it may be time to make some difficult choices. And one to look at sooner rather than later is downsizing.

A lot of people wait until they're actually retired to downsize. But if your savings need work and inflation is making IRA or 401(k) contributions impossible, you may have to take the plunge sooner.

Housing tends to be a lot of people's biggest ongoing expense. Reducing it substantially could help you get caught up on retirement savings in a meaningful way.

It could also help to turn to the gig economy for extra income. Is that an easy thing to do when you're a tired 40- or 50-something parent of teenagers? No. Is it equally difficult if you had your kids a bit later and have an 8-year-old to shuttle to activities every night? Yes.

However, the gig economy offers some great opportunities to make extra money. That additional cash could not only be your ticket to funding an IRA or 401(k), but also to having an easier time keeping up with your bills in general.

Don't let yourself fall behind

It's not surprising to see that Gen Xers are feeling the strain of inflation, and that it's impacting their retirement savings efforts. But it's important to try to find ways around it so you're able to meet your long-term savings goals and enjoy the comfortable retirement you deserve.

Remember, too, that Social Security's future is a bit precarious now due to the possibility of benefit cuts. That's all the more reason to make sure you're doing whatever it takes to save up a sizable nest egg -- even if it means making some sacrifices in the near term.

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