Gen X Faces Retirement Savings Crisis Amid Economic Uncertainty

As economic volatility continues and job security wanes, Generation X, those born between 1965 and 1980, finds itself in a precarious position regarding retirement savings. With ages ranging from 45 to 60, this demographic is increasingly concerned about achieving the financial stability their parents enjoyed, as retirement looms for its older members. The challenge of saving for retirement is compounded by daily living expenses, educational costs for children, support for adult children, and care for aging parents, all of which detract from the ability to contribute to IRAs and workplace retirement plans.

A recent analysis by Next Generation Trust Company reveals a stark reality: only 14% of Gen Xers believe they have saved enough for retirement, with an average expectation of needing $1.07 million to retire comfortably but anticipating a shortfall, expecting to have only $602,944 saved. This discrepancy is more pronounced than the gaps faced by millennials and baby boomers. Concerns are further exacerbated by findings that over half of Gen Xers worry about outliving their assets, nearly half have not engaged in retirement planning, and 43% plan to claim Social Security benefits early due to doubts about the program's sustainability.

The annual Transamerica Center for Retirement Studies survey underscores these anxieties, with respondents indicating a belief that achieving financial security is more challenging for their generation than it was for their parents'. Over 70% express concerns about the Social Security Trust Fund's future, and 20% anticipate living to at least 100 years old, adding another layer of complexity to retirement planning.

Jaime Raskulinecz, CEO of Next Generation, points to the financial burdens of homeownership, family responsibilities, and caregiving as significant stressors for Gen X and younger generations. The addition of longer life expectancies, the costs associated with long-term care, and recent job market instability further complicate retirement savings efforts. Raskulinecz highlights the option for those 50 and older to make catch-up contributions to their retirement plans and the possibility of opening a self-directed IRA to continue building retirement wealth, emphasizing the potential of alternative investments for long-term growth.

For more insights into retirement savings strategies, consider reading the full blog article here. Additional information on self-directed retirement plans can be found at https://www.NextGenerationTrust.com.