Gen Xers are feeling unprepared for retirement as they approach the traditional retirement age of 65. A recent survey by BlackRock found that only 60% of Gen Xers feel on track with their retirement savings, the lowest confidence level among all age groups in the U.S.
Gen X faces several challenges when it comes to saving for retirement.
Many prioritize other expenses or struggle to cover monthly costs, especially with high inflation rates. Unlike Baby Boomers who often had company pensions, Gen X workers have had to save for retirement mainly on their own. The shift from employer-based savings like pensions to employee-driven methods such as 401(k) plans happened during Gen X’s working years.
This puts more responsibility on individuals to save for their own retirement.
Gen X retirement savings challenges
Despite feeling unprepared, Gen Xers are consistent savers.
The BlackRock survey shows that 80% of Gen Xers save for retirement regularly. As the oldest Gen Xers turn 59 and a half, they can make catch-up contributions. This allows them to invest more in retirement accounts like IRAs and 401(k)s after age 50.
Gen X also stands to benefit from the “Great Wealth Transfer.” Tens of dollars will be passed down from Baby Boomers to their heirs over the next decade, and this inheritance could boost Gen Xers’ confidence in their financial futures. While Gen X may feel the crunch now, there is hope for a more secure retirement through strategic saving and potential inheritances.
Time will tell if these factors can help close the retirement savings gap for this generation.
