Generation X Savers: Are They Prepared Enough for Their Upcoming Retirement Years?

Published on November 18, 2024

Reasons why Gen Xers are concerned about their retirement readiness

It seems many members of Generation X, born between 1965 and 1980, might be considering a delayed retirement—or working in some capacity through their retirement years. With the oldest Gen Xers turning 60 next year, this generation’s shared experiences over the past 20 years—and what may lie ahead—are contributing factors to a general underfunding of and concern about their retirement plans.

Between lingering student debt (their own or their children’s), mortgage payments, credit card debt, the dot-com bubble burst, stock market downturns following the 9/11 attacks and the Great Recession in 2008-2009, and the financial fallout of the COVID-19 pandemic, there are enough factors to cause concern. Add the potential to become caregivers for aging parents or needing to support grown children, the cost of health care in our senior years, and other life issues, it’s no wonder many Gen Xers are concerned about their retirement savings (or lack thereof)—in spite of this cohort doing fairly well financially.

Recent surveys and statistics about Gen X retirement readiness

A Wealth Watch survey from New York Life surveyed 2,230 adults. The survey reported that 70% of Generation X think they will retire “later than expected” “or not at all

The 2024 Annual Retirement Study* from Allianz Life Insurance Company of North America, done earlier this year, sheds light on how Generation X consumers foresee their retirement—and the threats to retirement savings and security.

Participants’ top concerns were:

• Becoming a caregiver for parent – 10.4%
• Taxes taking a big chunk out of savings – 24.5%
• Stock market drops that lead to losing retirement funds – 30.9%
• A recession will affect my ability to save – 31.6%

• Healthcare expenses – 34.1%
• I will outlive my money – 35.8%
• Everyday costs increase so much that I can’t meet basic expenses – 50.5%

The survey also revealed that less than half of Gen Xers have a plan for how to take income in retirement (44%), and 45% are worried about how to best take distributions from their retirement plan. Over half (55%) wish they would have saved more money for retirement, citing expenses for day-to-day necessities, credit card debt, and housing debt as barriers to saving more for retirement. Forty-eight percent worry they will live too frugally and not enjoy retirement as much. In addition. 58% of the Gen X respondents do not have a written financial plan.

NOTE: As we often recommend to our clients with self-directed IRAs, consult your trusted advisors—not only about the alternative assets in your portfolio but your retirement income projection and strategy.

In the 2024 Transamerica Retirement Survey of Workers, which reached 5,730 workers, the median Gen X household has $93,000 in retirement savings and as a result, In the 2024 BlackRock Read on Retirement report, only 60% of Gen Xers feel “on track” for retirement, the lowest share of any generation and 60% worry they will outlive their retirement savings.

About those retirement plans…

The Allianz survey responses showed that:

• 55% of Gen Xers have an employer-sponsored retirement account
• 27% have a non-employer retirement account (for a total of 82% with some type of retirement account)
• 35% have no retirement accounts.

That 82% figure is right behind millennials, who appear to be somewhat more prepared and confident about their retirement.

Among millennials, now ages 28-43, 83% reported making retirement plan contributions, and 77% reported they feel confident about being able to financially support all the things they want to do in life. This is despite the oldest of them entering the workforce during post-9/11 economic uncertainty and younger millennials dealing with the post-COVID economy.

About self-directed IRAs and retirement savings strategy

Saving for retirement takes discipline, no question. It also means having a goal and a long-term plan for retirement. How much income will you need? What will your budget include? How much do you have to contribute to your retirement account to meet your goals? And—good news for Gen X taxpayers who are over age 50—don’t forget that you can make catchup contributions to your IRA.

One strategy we share—in our webinars, white papers, and when investors contact our office—is including alternative assets within a self-directed IRA.

A SDIRA enables you to boost retirement savings by investing in a broad array of alternative assets—nontraditional investments that are prohibited in traditional retirement plans. Why settle for stock market volatility when you can build a more diverse portfolio with real estate, precious metals, private equity funding, royalties, gas & mineral rights, and so many more alternatives?

Self-direction is a strategy that offers many more ways to build retirement savings. It also expects—as “self-directed” investors—that account holders to do all their own research about investments and make their own investment decisions. Next Generation executes the transactions, administers the paperwork and filing for the account, and retains asset custody for our clients.

We also offer complimentary educational sessions and a helpful team that’s here to answer your questions. Contact us at 888.857.8058 or NewAccounts@NextGenerationTrust.com about opening a new self-directed IRA (Traditional, Roth, SEP, or SIMPLE).