Gen X & The (Financial) Middle Child Syndrome

in Retirement Planning by

Generational divides have always existed. From our great-grandparents to our grandparents to our parents to our children, each generation is unique in their approach to their financial lives. One of the major differences between each generation is how they approach retirement.

We surveyed Americans over the age of 18 on various retirement-related topics in partnership with ORC International to dig a bit deeper into generational divides.

Where do Gen Xers Stand with Retirement Preparedness?

Gen Xers are known for several things (and when we define Gen X, we’re talking about Americans aged 35-58): Friends, MTV, the “latchkey generation.” But something they are not known for, according to our survey, is retirement preparedness. Although they are a generation ahead of Millennials, they are equally unprepared for their golden years. The difference is, Gen X has a shorter time to prepare.

The majority of Gen Xers not only have less than $100,000 saved toward retirement, but 34% say they have no money saved. Additionally, 61% also say they don’t know their current net worth – yet they expect to need at least $1 million in retirement. Yet, paradoxically, the majority of Gen Xers (60%) say that sticking to a comprehensive financial plan is important for a secure retirement. This is slightly under the number of Baby Boomers (64%) who believe financial planning is crucial for retirement preparedness, and significantly over the number of Millennials (47%) who prioritize this.

What Will Gen X Rely on For Retirement?

So, if Gen Xers are so under-prepared for retirement, what exactly are they relying on to get them towards – and through – a comfortable one? According to our survey, 37% think that high income will get them there (compared to 46% of Millennials and 28% of Boomers), but only 24% of Gen Xers think that a skilled financial advisor is likely to help them reach a comfortable retirement.

You may also be wondering in light of these seemingly dire statistics, do Gen Xers take advantage of employer-sponsored plans? Even though the majority of them aren’t yet prepared for retirement, they are the generation most likely to contribute to their 401k (47%); yet at 18%, they’re the least likely to max it out. And they’re the most likely to rely on Social Security, despite its fate being unknown.

Our Take

It’s not all gloom and doom for this financial middle-child generation. If you find yourself in a precarious situation, there are some low-hanging fruit you can grab to kickstart your retirement planning. With the right plan in place and by course-correcting as soon as possible, a comfortable retirement can still be in the cards for this generation.

For some steps you can take now to improve your retirement readiness, check out our guide on 65 Ways to Retire Smart.

For more insights on the state of retirement preparedness in America, read the full press release on our survey.

Read the Survey Results

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Michelle Brownstein, CFP®

Michelle Brownstein, CFP®

Michelle Brownstein is the Senior Vice President of the Private Client Group at Personal Capital. She is a Certified Financial Planner with a wide range of Investment Management experience.

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