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As retirement looms, many Gen Xers are still playing catch-up

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  • Generation X feels less prepared for retirement than other generations despite approaching it sooner.
  • Nearly half of Gen Xers, or 48%, say they won't have enough money to enjoy retirement.
  • Much of Gen X is in the "sandwich generation," taking on the financial burden of caring for both adult children and aging parents.

As older members of Generation X inch toward their golden years, the pressure of retirement saving is on — especially for those sandwiched between the financial burdens of caring for both elderly parents and adult children.

About half, or 48%, of Gen Xers say they won't have enough money to enjoy their retirement, a 2024 report from global asset management company Natixis Investment Managers found. Meanwhile, of those surveyed, 31% say they fear they'll never save enough to retire. 

Gen X is typically defined as those born between 1965 and 1980. Its oldest members are several years away from retirement, but they are already starting to think about where they will live in their 70s, 80s and even 90s.

"I think where it's very stressful for [Gen X] is being sandwiched in that tug of war, saving for their retirement as well as helping aging parents," said Marguerita Cheng, a certified financial planner and Gen X mother. "Even if they don't have aging parents, their parents are fine, there is still that tug of war between retirement savings and helping their kids with education." 

Gen X is the first generation of U.S. workers to come of age with 401(k) plans as their primary retirement vehicle after employers largely shifted away from traditional pensions in the 1980s.

As retirement approaches, Gen X is feeling the financial squeeze — but financial planners say there are still ways to maximize your savings.

"Generation X is the guinea pig for the 401(k)," said CFP Preston D. Cherry, founder and president of Concurrent Financial Planning.

Cheng, CEO of Blue Ocean Global Wealth, and Cherry are both members of the CNBC Financial Advisor Council.

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Natixis Investment Managers' Global Survey of Individual Investors conducted by CoreData Research in March and April 2023, included 8,550 individual investors across 23 countries with 2,928 Gen Xers (age 44-59).

The 'forgotten' generation

Gen Xers experienced political turmoil and societal change as children in the 1970s and later entered the workforce without the security that a pension offered their parents, Cheng said. 

"We're very irreverent, latchkey kids, independent, a little bit skeptical," she said. "I feel like Gen X is the middle child, it's like Rodney Dangerfield said, 'they get no respect.' People talk a lot about millennials, talk about boomers, but then Gen X is like the middle child, forgotten."

As Gen Xers began to think about planning for retirement, they faced 401(k) decisions about how much and what to invest in that their boomer parents never had to consider, Cherry said.

"They're having to make constant decisions to choose how much they're going to contribute to their 401(k)," Cherry said. "That's why we have automatic enrollment now, because it was so much of an under-allocation for so many years."

The median age at which Gen X workers began saving for retirement is 30, according to the research nonprofit Transamerica Institute, which is significantly older than the generations that came after.

More than half Gen Xers, or 55%, wish they saved more for retirement, according to a recent report from the Allianz Life Insurance Company of North America. That report was based on a survey of 1,000 respondents conducted between March and April 2024. The 55% who wished they saved more said in the report that day-to-day necessities, credit card debt and housing debt prohibited them from saving more.

Much of Gen X, coined the "sandwich generation," also found themselves caring for elderly parents and supporting their kids' college funds as they got older. 

That toll is expected to impact the financial freedom of nearly half of the generation, with 46% anticipating living frugally in retirement, according to the Natixis report.

'Retirement savings rates determine retirement dates'

Gen X can take advantage of their peak earning years, roughly the 40s and 50s, by maxing out contributions to tax-advantaged accounts like 401(k) plans and individual retirement accounts, according to Cherry.

Additionally, individuals who are age 50 or over at the end of the calendar year may be permitted to make annual catch-up contributions of up to $7,500 in 2023 and 2024 to their 401(k) plans.

The more someone saves toward retirement from their income, Cherry said, the earlier they can retire.

"Retirement savings rates determine retirement dates," he said. 

For Gen Xers without a lot of extra cash flow to devote to savings, not much can be done to make up for lost time, advisors say. But it's not too late to start saving and maximize existing savings accounts, they said.

Gen Xers can also look to delay claiming Social Security until age 70 to maximize their monthly benefits, Cherry said. They can also consider working past the typical retirement age of 65 if they are able, he added.

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