Evidence is mounting to suggest that Generation X, comprising Americans ages 44 to 59, is falling behind in retirement planning. In fact, according to Schroders’ 2024 U.S. Retirement Survey, just 14% of Americans between 44 and 59 believe that they have saved enough money for retirement. At the same time, nearly half of all Gen Xers say they have not done any retirement planning.
Such findings are worrying — especially considering that the oldest Gen Xers are approaching 60, Deb Boyden, head of U.S. defined contribution at Schroders, told ThinkAdvisor. “If planning and saving don’t become higher priorities, Gen X could become the lost-retirement generation,” Boyden warned.
Gen X, Boyden explained, is effectively the first generation to come of age with 401(k) plans rather than traditional pensions as their primary retirement savings. Yet many Gen Xers missed out on the automatic enrollment features that were not available in the early years of the 401(k).
“They also weren’t immediately invested into well-diversified default investments, and that has had an impact, too,” Boyden said. “The good news is even the oldest Gen Xers have several years left to better prepare financially before reaching their full retirement age, and the younger cohort in the generation has a lot of runway left.”
The full survey results also show baby boomers and millennials facing challenges. Both groups also face a sizable gap between what they expect to have saved and what they expect to need as a nest egg by the time they reach retirement.
“It’s important for people in all generations to assess where they stand and consider steps they can take today in order to improve their retirement outlook,” Boyden said.
A Closer Look at Gen X and Retirement
When asked how much money is needed to retire comfortably, Gen Xers say on average it will take $1.07 million. Asked how much they expect to have saved by retirement, the figure falls to just over $600,000.
The resulting gap of $466,000 is larger than the shortfall that millennials ($322,128) and baby boomers ($353,069) expect to face. Those generations anticipate needing $1.2 million and $1 million, respectively.
“I think these are really just aspirational figures that people are citing — and getting over that $1 million mark feels psychologically important,” Boyden noted. “In reality, everyone has a unique income need in retirement that depends on lifestyle, longevity and more.”
That’s why typical Americans can benefit by working with a financial professional or a representative of their 401(k) plan recordkeeper to do budget projections for retirement.
“Unfortunately for the Gen Xers who were the focus of this edition of the study, they are the least likely to be working with a financial advisor,” Boyden said.
Specifically, just 27% of Gen Xers surveyed are working with a financial advisor — compared with 37% of boomers and 31% of millennials — and the absence of a plan or guidance from an advisor could explain why 60% of non-retired Gen Xers are not confident in their ability to achieve their dream retirement.
“It’s never too late to seek the services of a financial advisor or explore investment solutions tailored to help retirees grow and safeguard their savings,” Boyden emphasized. “With more than half of Generation X worried about outliving their assets, a plan for generating income in retirement that includes an informed decision about when to apply for Social Security benefits could provide much-needed peace of mind.”
Additional Survey Highlights
The survey also showed that, despite their time horizon and savings shortfall, Gen Xers are holding, on average, 35% of their assets earmarked for retirement in cash. When asked about that allocation, 64% of Gen Xers describe a fear of losing too much money if the stock market goes down.
More than half of retired Gen Xers (53%) are concerned or very concerned about having to return to work to pay their bills. Just 20% of retired baby boomers said the same.
Similarly, 26% of non-retired Gen Xers are “terrified” about the idea of no more regular employment paychecks in retirement, compared to 22% of non-retired millennials and 15% of non-retired boomers.
Finally, just 10% of Gen X plans to wait to take Social Security benefits at age 70, when individuals reach their maximum monthly benefit. Notably, 43% of Gen Xers say they are planning to claim Social Security before 70 because they are concerned that the fund may run out of money or stop making payments. Just 24% of baby boomers and 37% of millennials cite the same concern.