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Is Generation X Ready for Retirement?

June 25, 2024

As the largest cohort of Baby Boomers enters retirement age, much is being made of their retirement readiness, but even generations who are several years from retirement are fretting about how prepared they are.

A recent study found that nearly half of Generation X feel that they will not have enough to retire comfortably, if at all. The report, from Natixis Investments, found that 48% of Gen Xers say they do not feel confident that they will have enough money to enjoy their retirement. Of those surveyed, 31% said they are worried that they will never be able to save enough money to retire.

The Generation X cohort generally refers to Americans born between 1965 and 1980, and though even its oldest members are still several years away from retirement age, the prospect of funding a retirement that will see them live potentially into their 80s or 90s. 

Gen X is something of a “guinea pig” for the current retirement system. They were the first generation of workers to come of age after the shift away from traditional pension plans, which guarantee lifelong income, to 401(k) plans being the primary retirement savings vehicle.

A separate report from TransAmerica found that the median age that Gen X workers began saving for retirement was 30, which is significantly older than subsequent generations like Millennials and Gen Z. More than half, 55%, of Gen Xers said they wish they had started saving earlier, according to a recent survey from Allianz Insurance. Of those who wished they had saved more, the cost of day-to-day necessities, credit card debt, and housing debt were cited as the most common reasons for not saving earlier.

With future generations living longer and life milestones like starting a family being delayed, Gen X has come to be known as a “sandwich generation,” meaning their financial priorities are split between supporting their elderly parents and providing for their children, leaving little left for funding their own retirements.

The result is that few Gen Xers expect to have financial freedom in their retirement years, with 46% expecting that they will have to live frugally in retirement, according to the Natixis report.

 

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