Will Gen Xers have enough money to retire?

Will Gen Xers have enough money to retire?

If you thought that the Americans who are most concerned about retirement planning are the workers who are closest to reaching retirement age, you’re in for a surprise. Roughly 10,000 Baby Boomers reached full retirement age today (congrats, Baby Boomers—you made it!), and roughly 10,000 Baby Boomers will continue to turn 65 every day for the next 11-ish years [1]. But they aren’t the generation that has the most anxiety about reaching retirement. Not by a long shot.

Enter Generation X.

How is Generation X preparing for retirement?

Gen Xers (born between 1965 and 1978) started joining the workforce in the late 80s—right as employer-sponsored retirement savings plans began to change. Many companies kissed defined benefit plans goodbye in favor of defined contribution plans, putting the responsibility of saving for a financially secure future directly onto the employee, rather than the employer, for the first time.

And that’s where the anxiety probably started setting in.

With the days of relying on a company-sponsored pension plan long gone, Gen Xers were the first generation to utilize a new type of retirement savings plan: a 401(k). The generation began contributing to their retirement savings at the median age of 28, contributing 7 percent of their annual pay to a 401(k) or similar plan [2]. Things were going well—and then the economic downturn started.

Some older Gen Xers may remember the effects of the 1987 stock market crash, which was then followed by the tech stock meltdown in 2000. But the most disastrous economic slump didn’t come until 2008—right as Gen Xers began entering their highest potential earning years yet. The Great Recession hit hard for millions of workers across the country, and the effects of that economic downturn have been monumental. In fact, a staggering 63 percent of Gen Xers admit they still haven’t fully recovered from the Great Recession ten years later [2].

And the challenges for Generation X savers don’t end there.

Not only were they the first to say goodbye to retirement benefits previous generations had enjoyed and probably taken for granted, like employer-sponsored pension plans, but Gen Xers will also be the first who may not be able to rely on Social Security benefits as a retirement security blanket. According to a 2018 report straight from the Social Security Administration, Social Security benefits are on track to run out by 2034—just four years after the oldest Gen Xers reach full retirement age [3].

But that’s not to say many Gen Xers plan on retiring as soon as they reach age 65, anyway. In reality, 70 percent of Gen Xers agreed that they could work until the age of 65 and still not have enough money saved to retire. And it gets worse. Only 8 percent of Gen Xers currently have enough money saved to even be on track for retirement—despite the oldest members of the generation having received their AARP cards two years ago already.

So is it feasible to assume that many members of the Gen X community will be working well past age 65? In theory it’s possible, but proper planning is paramount—and that’s something studies have shown Gen Xers seem to struggle with when it comes to retirement. In fact, a surprising 40 percent of the generation admits that they would prefer not to even think about retirement investing until they get closer to their retirement date [2].


This lackadaisical approach has put Gen Xers practically an entire generation behind when it comes to saving for retirement. The median retirement savings balance among Generation X amounts to just $35,000—which, incidentally, is the same median account balance Millennials have already managed to amass [4].

Steps Gen Xers can take to better prepare for retirement

It may seem like Gen Xers are in for a retirement nightmare, but luckily there’s still time to turn things around. Even the oldest Gen Xers have about a decade left before reaching full retirement age, and the younger members of the generation still have 20-30 years to grow their nest eggs. Plus, Gen X’s best earning years are still ahead.

Gen Xers can still achieve the retirement they’ve always dreamed of—they just have to do a little bit better job of preparing first.

· Determine retirement goals

Roughly half of Gen Xers say they haven’t guessed how much money they’ll need for retirement, and trying to determine how much will be needed can definitely seem like a daunting task at first [2]. Make it easier on yourself by breaking it into baby steps. First, think about your retirement goals. Are you a travel enthusiast who envisions exploring the world in your golden years? Or maybe you’d like to take up a new hobby, like golf, instead. Whatever the case may be, determining what your retirement goals actually are will help give you a realistic estimate of how much money you’ll need to fund your desired lifestyle.

· Avoid early withdrawals

Statistics show that three in ten Gen X plan participants have already taken out a plan loan or early withdrawal from their retirement account, which experts suggest doing only on a last-resort basis [2]. The top reasons for doing so include to pay off debt or to pay for unexpected major expenses (like car or house repairs), but remember that taking out an early loan or withdrawal can majorly impact the health of your retirement account over time.

· Utilize catch-up contributions

Gen Xers who are at least 50 years old (or will be 50 years old by the end of the calendar year) are eligible to contribute extra funds to their 401(k) account—over and above the federal limits. Normal 401(k) contribution limits cap off at $18,500 per year, but those aged 50 and over are eligible to contribute an extra $6,000 worth of “catch-up contributions” to their 401(k) account, which can be hugely beneficial to Gen Xers feeling the stress of approaching golden years.

Thinking about retirement or preparing for such a huge life event may not sound like fun for a huge portion of Gen Xers, but it’s vitally important to do so anyway. Without proper planning and preparation, Gen Xers will face a tougher retirement than past generations. And with parents who may soon need extra help due to failing health and children who are quickly approaching college, Gen Xers should begin saving for the future as much as they can—sooner rather than later.