As retirement looms, a sense of unease grips Generation X, often considered “America’s neglected middle child,” which is facing a financial landscape that feels increasingly unstable. An AARP article highlighted the stories of people like freelance writer Gretchen Elhassani, 47, and university professor Mike Cundall Jr., 49, who represent the growing concern among their peers about securing a comfortable retirement.
Despite diligent savings efforts, including contributions to 401(k) plans and Roth individual retirement accounts (IRAs), the goal of a $5,000 monthly retirement income now seems fraught with uncertainty for Cundall and his wife, Amy Werner.
The unpredictability of the stock market, exemplified by the 2008 financial crisis’s dramatic impact on savings, along with inflation and escalating healthcare costs, compounds their worries. “All this has led me to believe that no matter how much we’ve saved, we’re not going to be able to retire and simply enjoy the golden years,” Cundall said, reflecting a sentiment widespread among his Generation X counterparts.
Dubbed “Generation anXious” by a Northwestern Mutual report, 55% of Gen Xers reportedly doubt their financial readiness for retirement, a perspective not as prevalent among other age cohorts. This generation faces a unique blend of challenges: A significant portion has meager retirement savings, with 35% having less than $10,000 set aside. The report underscores the acute anxiety pervading this demographic, struggling to envision a future that mirrors the stable retirements of previous generations.
According to the Schroders 2023 U.S. Retirement Survey, a substantial wealth gap exists within this generation. On average, Gen X workers believe they need over $1.1 million for a comfortable retirement but expect to have only around $660,000 saved. Over 60% of nonretired Gen Xers lack confidence in achieving their dream retirement.
The National Institute on Retirement Security (NIRS) and other studies confirm that Gen X’s financial preparedness for retirement is lacking. The typical Gen X household has only $40,000 saved for retirement, with a clear disparity between the top earners and the bottom quartile. This generation faces unique challenges, such as being the first to rely primarily on 401(k) plans instead of pensions, higher healthcare costs and the burden of student loan debt.
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Brian Ream, a Gen X member and managing principal at CliftonLarsonAllen, acknowledges the reality of this apprehension. “The anxiety is real, and I think it’s probably somewhat well placed,” he said, pointing to a general unpreparedness for retirement as traditionally conceived. This sentiment is echoed by wealth management adviser Thomas Jensen, who said, “On the financial side, our retirement’s going to look different than that of our parents. There’s some anxiety with that.”
Complicating matters, Gen Xers’ life choices and societal roles have delayed family planning and placed them in the “sandwich generation,” juggling the care of aging parents with child-rearing responsibilities. These factors, alongside the economic volatility and unique generational challenges, paint a picture of a generation at a crossroads, searching for alternative pathways to a secure and fulfilling retirement.
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