Rosalind Evans
Generation X grapples with the challenges of retirement preparedness, caught between financial struggles and hope for the future.
Gen X, born between 1965 and 1980, is next in line for retirement after the baby boomers. However, the journey toward retirement has been fraught with financial uncertainties. Unlike earlier generations, Gen X had to navigate a new savings environment, with pensions becoming scarce and 401(k) plans taking their place. Adding to the pressure, major economic events like the 2008 Great Recession have negatively impacted their financial health. As the oldest members of this generation approaches 60, many Gen-Xers are left wondering if they are truly prepared for what lies ahead.
Struggles with Retirement Preparedness
Many Gen-Xers are not actively preparing for retirement, according to a Wealth Watch survey by New York Life, which found that only 46% are actively planning for retirement. Alarmingly, 70% expect to retire later than anticipated—or perhaps not at all—with only 25% confident they’ll retire on time.
“There are a whole lot of Gen Xers who are finding themselves resigned to the fact that they’re going to be working forever,” said Matt Schulz, chief credit analyst at LendingTree. The struggle is real, with Gen Xers aged 45-54 reporting a median net worth of $247,000 in 2022, a figure lower than that of boomers at the same age in 2007.
Economic Crises and Late-Start Savings
Historical economic crises have shaped Generation X’s financial difficulties. “I think there’s this cumulative wear and tear of different circumstances Gen X has had throughout their lives,” explained KC Boas, head of retirement thought leadership at BlackRock. Many Gen-Xers began their careers during the dot-com crash in 2000, followed by the devastating effects of the 2008 recession during their prime earning years.
“This all happened without access to education and guidance,” noted Jessica Ruggles, corporate vice president of financial wellness at New York Life. She highlighted how features like auto-enrollment in retirement plans only became widespread much later, leading many Gen-Xers to start saving at 30—significantly later than millennials.
Debt Issues and Optimism for the Future
Alongside insufficient savings, Gen Xers are dealing with high levels of credit card debt. Bankrate reports that 27% of Gen X credit card holders have maxed out their cards—more than any other generation. This is concerning since paying down debt is crucial as retirement approaches. Yet despite these setbacks, Gen X seems to be adjusting its financial habits.
Bank of America reports a 2% decline in discretionary spending among Gen Xers, the most significant drop across generations. At the same time, they are investing a larger share of their income. “Bottom line, they’re spending less and investing more,” said Joe Wadford, an economist at the Bank of America Institute. “It’s certainly a sign that Gen X is hopeful for the future. They think they will retire, and they think that those investments will pay off in the future.”
Navigating Toward Retirement with Optimism
Although financial hardships have shaped much of Generation X’s experience, this group remains hopeful about their future. As they reduce spending and increase investments, many Gen-Xers believe they can secure a comfortable retirement in the long run. However, significant challenges remain, with surveys indicating that only 60% feel “on track” for retirement.
With careful planning and continued financial discipline, Gen X may yet defy the odds and achieve the retirement they envision. And for those still worried, financial advisors and resources can provide much-needed support to navigate the road ahead.
