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Indestata > Homes > 3 Changes Gen X Should Make To Their Retirement Strategies With Trump In Charge
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3 Changes Gen X Should Make To Their Retirement Strategies With Trump In Charge

TSP Staff By TSP Staff Last updated: April 29, 2025 10 Min Read
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The first wave of Gen X is on the cusp of retiring, and many are feeling behind on their retirement goals, according to Bankrate’s 2024 Retirement Savings Survey. Gen X — whose members were born between 1965 and 1980 — may start claiming Social Security in as soon as two years. But with President Donald Trump’s tariffs wreaking economic havoc (and likely more on the way) what changes should Gen X make to their retirement strategies to safeguard their retirement?

Here are some key ways Gen X can plan for retirement during Trump’s second term in office. 

Need an advisor to help you get your retirement on track?

Bankrate’s AdvisorMatch can connect you to a CFP professional to help you achieve your financial goals.

3 changes for the Trump 2.0 era

Gen X has one big advantage over boomers who are looking to safeguard their retirement under Trump 2.0: time. While boomers may be forced to make some tough trade-offs, Gen X has time to make small changes (and maybe a few big ones) that can still put them in good shape for retirement. They can even protect against the coming Social Security shortfall with smart strategies.

1. Expect to work longer

Let’s start with one of the toughest choices — working longer. Working more years is probably the single-best solution for funding retirement because it solves two problems at once. 

First, working longer helps you fund retirement accounts such as your 401(k) and IRA. Of course, your retirement accounts benefit from more inflows and extra growth, giving you more money. Second, a year of working means one less year you’ll need to tap your retirement funds. You should plan for your retirement account to sustain you for 20 or 25 years, and conservative financial advisors are telling clients to plan for a retirement of 30 years or more to be safe.   

Working longer may also help boost your Social Security payout if you delay filing for it. The longer you wait to claim your benefit, up to age 70, the larger your monthly check will be. So working longer can help you get a larger payout — one of the best strategies for a bigger check.

An extra year or two of work is nobody’s idea of a good time, but it does solve a lot of potential problems, and it can help you avoid one of the worst-possible outcomes — outliving your retirement income. Far better to work a little longer now when you’re likely earning a better income than come out of retirement later on and likely earn less.  

2. Be prepared to replace potentially lost Social Security income

It’s not news that Social Security will need to cut benefits as soon as 2033 if changes are not made to the program. That means that Gen X can’t count on the current level of Social Security payments, and so they must plan to offset potential cuts to the program with their own income. 

Most of Gen X already qualifies for “catch-up contributions” in their tax-advantaged retirement accounts, since they’re age 50 or older. Those 50 and older can add an extra $1,000 to their IRAs on top of the $7,000 regular contribution. A 401(k) also lets workers put away an extra $7,500 each year in addition to the regular contribution of $23,500 for this year. These extra amounts can really benefit workers with 10 to 15 years or more until retirement. 

But the oldest Gen Xers have a small extra bonus, too. The leading edge of Gen X — those turning 60 in 2025 — now have the ability to make “super catch-up” contributions, up to $11,250 this year, in addition to the regular contribution amount of $23,500. But they can only make these contributions for a few years (ages 60 to 63). Here are the details on the super catch-up. 

So savers will need to carefully consider how much to save and where to save it. Even if Social Security is ultimately not cut, you’ll never be disappointed to have money in reserve. 

3. Consider investing in dividend stock funds

One way to make up a shortfall in income is to buy some of the top dividend exchange-traded funds (ETFs). Dividend ETFs own a variety of stocks that pay out cash dividends, and the best dividend ETFs have grown their payouts over time, helping investors grow their purchasing power. This setup is perfect for retirees, who need reliable income and protection from inflation. 

Besides the cash income, dividend ETFs also offer a few other advantages, particularly in the Trump era. Not only do they pay out income, but dividend funds can grow your wealth over time, appreciating in price, so it’s not an either-or trade-off, as is typically the case with bonds. Plus, dividend stocks tend to be less volatile than an average stock, and the fund offers the benefits of diversification, reducing volatility and spreading out your investment across hundreds of stocks. 

With years and years before retirement, dividend funds can be a great choice for Gen X, helping build income for their golden years and offsetting a potential Social Security shortfall.

Beware the Social Security shortfall

The biggest issue on the horizon for Gen X is the Social Security shortfall and what elected leaders decide to do with it. If nothing is done, the program will have to cut benefits, meaning that plenty of politicians who want to cut it are incentivized to do nothing. Trump has been on the record saying that he’s both in favor of keeping the program and in favor of cutting it. While low-cost solutions exist, they have to be implemented to save Social Security.

The uncertainty about Social Security’s future means that Gen X must make other plans to replace any future income that’s lost. While no one foresees a complete cut to the program, prudent retirement planners will want to plan for a worst-case scenario first and then scale back if and when things are not quite so bad. 

Time gives Gen X a huge advantage here, compared to boomers, who are mostly already locked into their future financial plans. That’s not the case for Gen X, which in some cases may have as much as 25 years before retirement. Time is your biggest ally when it comes to building wealth and offsetting any potential shortfall in Social Security. 

So those with a long timeframe — and remember, working longer can extend your timeframe, too — can stick to their long-term plan of building wealth. Good financial advisors routinely recommend that clients do not drastically alter their long-term investment plan in response to who’s in the White House, but small tweaks at the edges can make financial sense. 

Above all, if you haven’t started making saving and investing a discipline — whatever your generation — it’s a good reminder to start securing your financial future. 

Bottom line

Investors who start today can lower the total cost and effort to minimize the effects of President Trump’s tariffs, a potential Social Security shortfall and protect their financial future. Gen Xers with a decade or more to retirement have a good opportunity to solidify their future if they step up their savings rate and invest in attractive long-term investments, such as dividend funds.

Editorial Disclaimer: All investors are advised to conduct their own independent research into investment strategies before making an investment decision. In addition, investors are advised that past investment product performance is no guarantee of future price appreciation.

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