Gen Xers Approaching Retirement with Inadequate Savings

October 04, 2023: Gen Xers born between 1965 and 1980 are approaching retirement age, but many have not saved enough to support themselves in their golden years.

A recent study by the National Institute on Retirement Security found that the median retirement savings for a Gen X household is just $40,000. This is far below the amount experts recommend that retirees have saved, typically between 10 and 15 times their annual pre-retirement income.

Several factors have contributed to Gen X’s retirement savings crisis. One factor is that Gen Xers came of age during economic uncertainty. Many Gen Xers experienced job losses and stagnant wages during the 1980s and early 2000s recessions.

Another factor contributing to Gen X’s retirement savings crisis is the decline of traditional pension plans. Many Gen Xers do not have access to a pension plan, meaning they are solely responsible for saving for their retirement.

What Can Gen Xers Do to Prepare for Retirement?

Despite their challenges, Gen Xers can still take steps to prepare for a secure retirement. Here are a few tips:

1. Start saving early. The earlier you start saving for retirement, the more time your money has to grow. Even if you can only save a small amount each month, it will add up over time.
2. Take advantage of employer-sponsored retirement plans. If your employer offers a 401(k) plan or other retirement savings plan, participate and contribute as much as possible. Many employers offer matching contributions, which is free money.
3. Invest wisely. Once you have saved some money for retirement, it is essential to invest it wisely. Choose investments that are appropriate for your risk tolerance and time horizon.
4. Create a retirement budget. Once you know how much money you have saved and how much you expect to need in retirement, create a budget to help you track your spending and make sure you are on track to reach your goals.

Gen Xers are facing several challenges as they approach retirement. However, Gen Xers can still prepare for a secure retirement by taking steps to save early, take advantage of employer-sponsored retirement plans, invest wisely, and create a retirement budget.