Generation Xers are known for a lot of things. They’re cynical, yet entrepreneurial, individualistic, and super tech-savvy. But some fear that, soon, they’ll be known for something else – their total and complete lack of planning and preparation for retirement. Here’s what you need to know.
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1. Generation X is turning 50.
The youngest members of Generation X are about to turn 35. But, believe it or not, the older Gen Xers are turning the corner toward 50 and therefore, toward retirement. Are they prepared? Not so much. In fact, compared with baby boomers (who were generally better prepared for retirement than the generation that came before them) Gen X is in big trouble. And, at this stage in their careers, they’d love to be further along.
Every generation experienced loss in the Great Recession, but data shows that Generation Xers were the hardest hit. Boomers lost about 26 percent of their median net worth from 2007 to 2010, but Gen X lost nearly half of their wealth, about 45 percent. This came out, on average, to about $33,000. Even as some indicators suggest increasing stability in the job market and better wages, this loss still took a toll. And, Gen X continues to struggle to bounce back.
3. Although the clock is ticking, Generation X is not prepared for retirement.
Research from the Transamerica Center for Retirement Studies paints a dim picture of Gen X’s readiness. Compared with millennials and baby boomers, Gen X is less sure they’ll be able to retire comfortably, less confident in the size of their nest egg, and more than anyone else, believe they will have a harder time finding financial security in retirement than their parents did. They also contribute to retirement plans less than either of the other two generations surveyed and are least likely to have some form of a retirement strategy. Additionally, they have employed the services of a financial adviser less often than baby boomers or even millennials.
“Gen X is in retirement jeopardy,” says Catherine Collinson, president of the organization that released the study. “At their age, they need to be more focused on saving and planning for retirement, but our research found that many have backed away from it.”
4. Despite being nicknamed “Generation Stress,” Generation X doesn’t seem very worried about retirement.
There are many potential reasons why Gen X is behind in their planning and saving for retirement, but it’s surprising that they haven’t gotten themselves together, given their reputation for stress and anxiety. As retirement age looms closer and closer, Gen Xers would be wise to direct some of their tension toward preparing for this stage of life. The economic ups and downs haven’t made it any easier, but it’s time to get going nonetheless.
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