Gen X Is Getting Ready To Retire, But Their Savings Are Significantly Lower Than Recommended
Yet again, Gen Xers are left to fend for themselves.
fizkes | Shutterstock Gen Xers pride themselves on being independent and self-sufficient. However, this generation of latchkey kids, who were born between 1965 and 1980, is now facing a future in which they could benefit from community support.
Many Gen Xers are getting ready to retire, but their savings are significantly lower than the recommended amount.
Gen Xers have 5 to 15 years left before they hit 65 years old, which was traditionally the age at which people were fully eligible to collect Social Security. Yet for people born in 1960 or later, the full benefit age is 67.
This could be seen as one more way that Gen Xers are being put at an economic disadvantage, setting them up to struggle in their golden years.
A survey conducted by the investment firm Prudential found that Gen X is financially unprepared for impending retirement, with 55-year-olds in an especially precarious situation.
This age group has a median savings of $47,950, which is 10% lower than the amount of savings Prudential recommends they have: $446,565.
Yet our current economic reality makes saving that much money seem virtually impossible.
The extreme level of financial insecurity that 55-year-olds are experiencing is creating major mental and emotional health issues. They reported being the least satisfied with their lives compared to other ages surveyed.
Close to two-thirds of 55-year-olds believe they’ll outlive their savings, making their future seem uncertain.
fizkes | Shutterstock
The National Institute on Retirement Security (NIRS), a nonprofit organization, reported that the average Gen X household has $40,000 saved for retirement.
Dan Doonan, the executive director of NIRS, emphasized how dire the issue of retirement is for Gen X.
“They’ve lived through multiple economic crises. Wages aren’t keeping up with inflation, and costs are rising,” he said. “The American dream of retirement is going to be a nightmare for too many Gen Xers.”
Pekic | Canva Pro
Even their current financial situation is fairly dire, due to factors out of their control, like high balances and compounding interest on student loan debt.
Many Gen Xers have been thrust into the role of economic caregiver, as they’re providing for their aging parents and their adult children at the same time.
Gen X’s lack of savings can’t be blamed on poor planning or individual financial choices.
Rather, it's a combination of public policy changes and corporate decisions that have put them at a major disadvantage.
They’ll end up paying for more of their retirement on their own, highlighting how little support they have, compared to Boomers, who are America’s wealthiest generation.
Yet Boomers, too, are feeling the crunch of the country’s retirement crisis, and they’re moving abroad to build an even better life than they have here.
According to data from the Social Security Administration from December 2022, there were 700,800 people getting Social Security payments abroad, compared to less than 400,000 people in the year 2000.
The fact that Boomers have the ability to leave the U.S. behind illustrates how they’ve benefited from economic policies that no longer exist in the way they once did, like getting a pension and accessing the G.I. Bill to pay for college.
Boomers tend to believe that they earned their wealth all on their own, yet that mindset overlooks how much national support networks have changed as the years have passed.
They maintain that younger generations don’t want to work hard and, therefore, shouldn’t complain about how impossible it is to survive.
It doesn’t appear as though Gen X is being offered any solutions to mitigate the retirement crisis they’re about to enter. Yet it’s clear that epic change is needed, or Gen X will be left to fend for themselves once again.
Alexandra Blogier is a writer on YourTango's news and entertainment team. She covers social issues, pop culture and all things to do with the entertainment industry.