Why a Large Amount of Gen X Believe They Will Never Retire
Written by
Tina Nazerian
Edited by
T. Woods
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Increasingly, Generation X is drawing closer to retirement. But a new survey from Natixis Investment Managers has revealed that over one in five Gen X-ers say they won’t retire.
What’s Standing in Front of Gen X-er Retirement Goals
Dave Goodsell, Executive Director of the Natixis Center for Investor Insights, told GOBankingRates in an email interview that a number of factors are negatively impacting Gen X-ers’ ability to retire. For one, he explained, Gen X-ers might be juggling college costs for their kids or assisting their adult children with rent — alongside “supporting elderly parents by providing a place for them to live or helping to pay healthcare costs.”
Then there’s inflation, which Goodsell wrote makes things “even more challenging.” According to the survey, 62% of Gen X-ers aren’t saving as much due to “higher everyday costs.”
“This is all happening at a time when conventional wisdom says they should have more disposable income and should be topping off their retirement accounts,” Goodsell noted.
Expectations vs. Reality
The survey revealed a significant difference between what Generation X expects when it comes to retirement — and the reality.
Specifically, the survey found that “Gen X-ers want to retire at age 60 — notably nine years earlier than the anticipated retirement age of unretired U.S. Baby Boomers (who want to retire at age 69). Gen X-ers anticipate a retirement period lasting only 20 years, which is shorter than many retirees actually experience.”
But those expectations aren’t feasible for many Gen X-ers, given their income and the amount they have in retirement savings. As indicated in the survey, Gen X-ers have “a median household income of $150,000.” As for media retirement savings? Merely “$250,000 today — hardly enough to carry them over 20 years.”
This disparity, Goodsell believes, comes down to “human nature.”
“The younger they are, the more optimistic investors tend to be about retiring early,” he explained.
However, he urged that “as retirement gets closer, people have to get more realistic.”
“They need to ask themselves: ‘Have I saved enough?’ ‘Do I really want to take early Social Security and a smaller monthly check?’ ‘How long will I need my money to last?,'” he emphasized. “What they really need is professional advice that helps them put numbers behind their goals and help them realize what they can actually do.”
With Saving and Planning, There’s Still a Path To Retirement for Gen X-ers
According to Goodsell, some people might think that if they don’t save for retirement, then they’ll just stay in the workforce longer. In fact, the survey revealed that 46% of Gen X-ers “accept they may have to work longer” and 30% fear having no choice but to go back to work after retiring.
But Goodsell warned that returning to the workforce might not be possible.
“A late career layoff, an illness in the family or a decline in your own abilities may take you out of working well before age 67,” Goodsell explained. “The best strategy for minimizing the impact of both sides of that coin is to step up your savings now.”
The good news? Members of Generation X who don’t think they can ever retire can start taking steps today to increase their chances of being able to do so one day.
“Even if Gen X-ers have waited into their 50’s to step up their game, they still have options,” Goodsell wrote. “First and foremost, it’s important max out 401(k) savings. In 2024, the contribution limit is $23,000 annually. If you’re over 50, you can save even more with up to $7,500 in catch-up contributions. Older Gen X-ers, should note that at age 60 the limit increases to $10,000.”
However, Goodsell noted that the most crucial step for Gen X-ers is to seek financial planning guidance.
“Get professional advice to help you figure out what you’ll need to fund retirement, the kind of income you can generate off savings, investments and Social Security and set a realistic plan to carry you through the final chapters of working life,” Goodsell explained.
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