As the oldest members of Generation X reach the age of 60, many people are worried that they will not be able to live the retirement life they dreamed of.
A report released on Wednesday by the Retirement Research Center Transamerica shows that only 18% of Gen X employees are “very confident that they will be able to retire completely and maintain a comfortable lifestyle.” A quarter of them strongly agree that they are currently building up a sufficient retirement savings to feel at ease after retirement; this proportion is several percentage points lower than that of Millennials and Baby Boomers.
The concerns of Generation X are not without basis in reality. The median amount in the family retirement accounts of Generation X employees is $113,000, which is less than half of the $263,000 for Baby Boomer employees. Compared to the $750,000 they believe they need to save by the time they retire, this figure is far from sufficient.
Over the past year, Business Insider has interviewed dozens of Gen X individuals who are dealing with financial pressures stemming from job hunting, self-employment, and caregiving responsibilities. Many older Gen X respondents stated that becoming unemployed in their 50s disrupted their careers. Data from the U.S. Bureau of Labor Statistics shows that as of September, the average duration of unemployment for people aged 55 to 64 was over 8 months, which is about 7 weeks longer than for those aged 45 to 54. Many Gen X individuals interviewed by BI attribute this to implicit age discrimination.
Some people have told Business Insider that they have taken significant salary cuts, filed for bankruptcy, or arranged to be temporarily off work in order to learn AI skills. Many others, after depleting their savings, have had no choice but to draw from their 401(k) accounts or rely on relatives and friends to support themselves. There are also those who have grown tired of searching for jobs and have turned to starting their own businesses instead.
Many members of Generation X, born between 1965 and 1980, are delaying their retirement. In a Transamerica survey, more than a third of them stated that they are likely to retire at the age of 70 or later, or perhaps not retire at all. Over half of them expect to continue working to some extent after retirement.
The survey shows that, overall, Generation X has less confidence about retirement than their older and younger peers. Less than a quarter of Generation X expects to be able to retire before the age of 65, which is only half of the proportion for Generation Z.
Even if it's just a temporary early retirement, it is a common trend among caregivers. The survey found that more than one-third of the respondents are currently or have previously been caregivers. Among them, 35% indicated that their financial situation has deteriorated during the period of caring for others. The survey points out that millennials and Generation X are more likely to bear this pressure than other generations.
The out-of-pocket expenses for family caregivers exceed $11,500. Although many have taken on a second job, others pause their careers in their 40s and 50s to care for their parents or spouses. A few people give up six-figure salaries and rely on savings, public pensions, or their spouse's disability insurance to make ends meet.
CareScout CEO Samir Shah stated: "When a large number of people leave the labor market, or when people take three to four years off, their families are affected, and society is also damaged due to the economic impact."
Some of this anxiety can be traced back to the fact that they started saving later than their younger colleagues. Generation X began saving through 401(k) plans on average at the age of 30, while millennials started at 26. Many members of Generation X began working after it became clear that traditional defined-benefit pension plans were declining, just as 401(k) plans were starting to become more widespread in the workplace. Over 80% of Generation X employees have access to 401(k) or similar plans, and nearly half of them believe that these tools will become a major source of their retirement income.
Despite some statistically optimistic figures related to retirement, younger and older generations also expressed financial difficulties in the survey. Among Generation Z employees, six in ten feel exhausted, and half have difficulty maintaining a balance between income and expenses. Many prioritize debt repayment, building emergency savings, and covering basic living costs; their median savings amount to about $37,000.
Nearly 60% of millennials say debt is a barrier to saving for retirement; 37% are responsible for caring for others, and almost everyone has adjusted their work schedules as a result.
For the baby boomers, more than half of them either do not intend to retire or expect to retire after the age of 70; only slightly over a quarter have made a written retirement plan. Preparing for long-term care and worrying that they will live longer than their savings will allow are the main retirement concerns for the baby boomers.
