Retirement Saving: How Far Behind Is Gen X & How Can They Catch Up?

Senior mature business woman holding paper bill using calculator, old lady managing account finance, calculating money budget tax, planning banking loan debt pension payment sit at home kitchen table.
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Much has been written about how millennials and Gen Zers are changing the nature of saving for retirement and how they’re even on pace to out-save the baby boomers. But what about the lost generation in the middle?

Gen Xers are now firmly in middle age, with the oldest in their late 50s on the runway to retirement. Are they ready?

According to a new GOBankingRates study, most Gen Xers didn’t start saving until their 30s. Predictably, that late jump leaves them playing catch-up today as the finish line draws near. Around 86% have less than $200,000 saved, with the largest plurality, 35%, sitting on nest eggs of less than $10,000. One in four has only between $10,000 and $50,000 saved; another quarter has nothing saved at all.

Even so, they’re an optimistic bunch: 37% believe they’ll be able to retire on less than $500,000 and nearly 60% believe they’ll be able to stop working before full retirement age. Here’s a look at what they’re up against and how they can right the ship.

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Early Obstacles Got Gen X Off to a Slow Start

Most Gen Xers were born too late for the pensions that past generations relied on to retire and too early for the unlimited information and easy access to investing that today’s young adults enjoy growing up in the digital age.

Their employers didn’t save on their behalf like their baby boomer parents, and they didn’t have the tools or the knowledge to do it themselves like their millennial siblings.

“When Gen X was in their early 20s, most weren’t advised to start saving for retirement yet, which is why so many waited until their 30s,” said Jake Hill, CEO of DebtHammer. “Improper planning, especially in terms of accounting for changes in the economy, then led them to underestimate how much money to put aside each month.”

Also, they were the first Americans who had to trade decades of debt for higher education.

“While millennials and Gen Z have it worse, Gen X was the first generation that really had to deal with rising college costs,” said Melanie Hanson, editor in chief of EDI Refinance. “Many of them are still dealing with student loans even in their 40s and 50s, seriously cutting into their ability to effectively save for retirement.”

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Fundamentals Are Key to Catching Up

Because so many Gen Xers got off to unhealthy financial starts, bad habits impeded their progress — but there’s still time to replace bad habits with good ones.

“The first exercise they should practice is living on a budget,” said Denny Artache, a financial planner, Social Security expert and CEO of Artache Financial Group. “What is coming in and what is going out? This habit will prepare them for retirement when they decide to no longer work.”

The study shows that one in five Gen Xers is invested in crypto — more than index funds, ETFs, annuities or gold — and it’s not hard to understand why. Risky investments that promise fast gains are tempting if you’ve fallen behind; but, for Gen X, it’s too late in the game to swing for the fences.

“The more time you have, the more risk you can take,” Artache said. “If they are behind the 8-ball, then they’d better be very careful about how they invest, as we all see how markets turn for the worse faster than most are comfortable with.”

Are You Retirement Ready?

He recommends safer alternatives such as “insurance products, buffered strategies, fixed rates, income-producing investments and even their own businesses that do not require much capital.”

If They Didn’t Plan Then, They Must Plan Now

The good news for Gen Xers who have fallen behind is that the government bends a few key rules so people their age can beef up undersized nest eggs at the 11th hour.

“There is still time for Gen Xers to catch up on their retirement savings and, more importantly, to start planning ahead,” said Melody Evans, a wealth management advisor with TIAA. “If you’re younger than 50, you can contribute up to $20,500 to either a 401(k) or 403(b); but, if you’re older than 50, you can contribute an additional $6,500 as part of a catch-up contribution. You may also be able to max out contributions to a Roth IRA for you and a spouse, depending on your income.”

Now is also the time to start strategizing for decisions that are further off, but no less consequential.

“When to take Social Security is important because the longer they wait, the higher the benefit and the less in taxes they will pay,” Artache said. “Finding the right Medicare plan will also save so much money that it is just as important as investing.”

When Planning, Think Outside the Box

Evans offered the following five ideas for Gen Xers who have fallen behind: 

  1. Log into to access your Social Security statement and review your earnings history to know where you stand.
  2. Ask your employer about phased retirement plans.
  3. Consider retiring in a state with a lower cost of living.
  4. Work part-time in retirement to supplement your fixed income.
  5. Ask HR about alternative retirement plans, investment advice, pensions or annuity options.
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A Difficult Conversation With Parents Could Help

Most Gen Xers are decades out of the nest and, if their parents are still with them, they’re quickly approaching advanced age. Frank discussions about wills and asset distribution are inherently uncomfortable, but they’re critical for people in middle age who are behind on their savings.

“One way many Gen Xers might be able to catch up in savings is that they are anticipating a windfall from inheritances from their parents,” said Renee Fry, CEO of the estate planning service Gentreo. “The greatest wealth transfer in history is happening right now, but this means parents need to have their estate plans in place and be naming their Gen X children as the beneficiaries. It’s a great incentive for grown children to make sure their parents are planning ahead and not leaving decisions up to the courts.”

Even if no inheritance is in the cards, Gen Xers still have the power to make good decisions on their own behalf.

“Make tough but realistic choices and practice the art of living well beneath your means rather than competing with others that had a higher starting point,” Artache said. “Discipline, sacrifice and the right plan can still be achieved.”

More From GOBankingRates

Are You Retirement Ready?

Methodology: GOBankingRates surveyed 997 Americans aged 18 and older from across the country between Aug. 9 and Aug. 11, 2022, asking 16 questions: (1) How much money do you currently have saved for retirement?; (2) How much money do you think you’ll need to retire?; (3) Realistically, at what age do you want to be retired?; (4) At what age did you start saving for retirement?; (5) What worries you financially about retirement? (Select all that apply); (6) Do you plan to work in retirement?; (7) What assets do you have in your retirement portfolio? (select all that apply); (8) How has the current inflation impacted your retirement plans?; (9) How much of your retirement do you plan to fund with Social Security?; (10) How do you feel about the future of Social Security when you retire?; (11) What percentage of your salary are you currently investing for retirement?; (12) Are you planning to move after your retirement?; (13) Where is your ideal place to retire?; (14) What government programs do you plan to use for your retirement? (select all that apply); (15) Do you have a pension plan?; and (16) How much do you think the average American has saved at the time they retire? GOBankingRates used PureSpectrum’s survey platform to conduct the poll.

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About the Author

Andrew Lisa has been writing professionally since 2001. An award-winning writer, Andrew was formerly one of the youngest nationally distributed columnists for the largest newspaper syndicate in the country, the Gannett News Service. He worked as the business section editor for amNewYork, the most widely distributed newspaper in Manhattan, and worked as a copy editor for, a financial publication in the heart of Wall Street's investment community in New York City.
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