9 Biggest Obstacles Gen X Faces in Saving for the Future
Written by
Cindy Lamothe
Edited by
Amber Barkley
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Every generation has its common financial roadblocks, and Gen X is no different: They’re currently confronting overlooked or underestimated challenges that impact their retirement readiness.
Below are some unique issues this generation faces as they prepare for the future.
Lifestyle Inflation From Peak Earning Years
According to Benjamin P. Stroh, a financial advisor specializing in holistic financial planning at Your CNY Advisors, many Gen Xers are at the height of their earning potential, which can lead to lifestyle inflation as incomes rise.
“This may not seem concerning now, but it often results in higher-than-necessary expenses that detract from retirement savings,” he explained.
He said scaling back on non-essential spending can significantly impact future financial security.
Supporting Adult Children or ‘Boomerang Kids’
It’s common for Gen X parents to support adult children, especially as student loan debt and cost of living rise.
This support, said Stroh, while well-intentioned, can severely hinder retirement savings, making it essential to set healthy financial boundaries and prioritize their own future needs.
Inflation and Its Long-Term Impact on Retirement Goals
With inflation at historic highs over the past few years, the purchasing power of Gen X savings may erode faster than anticipated.
“Many don’t realize that maintaining a ‘safe’ cash-heavy portfolio might be detrimental in the long run,” said Stroh. Building a plan that accommodates inflation through diversified investments, he added, is crucial to protect future spending power.
Housing Costs
Gen Xers may not consider that housing costs — like maintenance and property taxes or if upgrades for accessibility are needed — are likely to increase as they age.
“Planning for these costs — or even downsizing proactively — can free up significant retirement funds,” Stroh said.
Digital Identity and Financial Security
With the rise of digital platforms, Stroh said Gen X is uniquely vulnerable to cybersecurity risks that could jeopardize retirement assets.
“Yet, few think about investing in identity theft protection or cybersecurity measures,” he said. “Prioritizing digital security is becoming a critical component of wealth protection.”
Health and Wellness as Financial Necessities
According to Stroh, many Gen Xers overlook the value of investing in health now to avoid costly medical expenses later.
He said regular health check-ups, wellness programs and preventive care can save substantial healthcare costs in retirement, making health investments a financially sound strategy.
Student Loan Debt
“Although comparatively speaking, Generation X has less in outstanding loans than younger generations, student loan debt still remains a significant headwind for generation X,” said Adem Selita, CEO and co-founder of The Debt Relief Company.
He explained that student loans can be a major handicap to their budget and significantly weigh on their debt-to-income ratio, therefore affecting their ability to own a home or make other major purchases.
Lack of Financial Literacy
Although financial literacy is promoted more now in the education system than in previous years, Selita said this wasn’t the case when Gen X was in school. “This has led many Gen Xers to simply figure it out of their own accord, and, for many, that has led to financial mistakes.”
Retirement Plan Shortfalls
Traditional retirement plans like pensions have become less and less common, said Selita. “Gen X again has been caught in a transitional period where shifting work dynamics and retirement planning has forced them to rely on individual accounts.”
To compensate, he said Gen Xers should contribute to their own individual retirement plans as much as possible — both IRAs and 401(k) plans.
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