Retirement Options May Be Bleak for Gen X

The oldest members of Gen X, the generation born between 1965 and 1980, are coming into their retirement years. This group, known as the “forgotten” generation, had to punch an actual time clock and were the test subjects for 401(k) retirement plans. Now that their golden years are arriving, are they ready for it?

Gen X Retirement

The Gen X clan had some unique challenges in their lives and careers. The Wall Street Journal opined that Gen Xers are financially worse off than their baby boomer predecessors. In 2022, the “median household net worth of Gen Xers between 45 and 54 years old was about $250,000,” which is “about 7% lower than that of baby boomers at the same age in 2007,” as related in the inflation-adjusted Federal Reserve data. “That was the only age group that experienced a drop in median wealth over the 15-year period.”

Media Culture described Generation Xers as having “a pragmatic, self-reliant, and skeptical outlook” on life and work. This cohort experienced social, technological, and economic issues that changed the world and impacted their lifestyles and beliefs. They were the first to witness the influence of the digital revolution, especially as it correlated to work experiences. They also saw the fall of the Berlin Wall, the economic recession of the 1990s, the introduction of the personal computer, the rise of the Internet, the Gulf War, the Los Angeles riots, and the AIDS crisis, all events that affected not only how they lived their lives but also how they looked to the future and their financial stability.

The Gen X crowd was the first to move from company pensions that promised steady income – if they put in years of service – to 401(k) plans that put their financial destiny in their own hands. Many were not prepared. Plus, early variants of 401(k) plans were not automated and did not have the benefits offered today. Saving and planning for retirement was not as easy, and many Gen Xers are finding themselves at the end of their working career without enough funds to see them through their later years.

“Generation X represents a pivotal transition in our evolving retirement landscape,” Catherine Collinson, chief executive of the nonprofit Transamerica Institute and Transamerica Center for Retirement Studies (TCRS), told Market Watch. “Many Gen X–ers may be on a collision course.”

“Generation X has median retirement savings of $93,000,” according to a new study by the Transamerica Institute and TCRS. Northwestern Mutual’s 2024 Planning & Progress Study claims adults need $1.46 million to retire comfortably. However, only 16% of that group are “very” confident they will retire with a comfortable lifestyle, and just 21% strongly believe they are saving enough for a retirement nest egg, the Transamerica Institute and TCRS study found. The report further detailed that 79% of Gen Xers are concerned that Social Security will not be available by the time they retire, and 29% expect that to be their primary source of retirement income.

The Forgotten Generation

Gen Xers are sometimes referred to as the “forgotten generation.” There are a few theories about the nickname's origin, but a 2022 poll posted on X demonstrated that this group felt left out. The poll asked participants which cohort they thought was most ignored: Gen Z, millennials, baby boomers, or the Silent Generation. Gen Xers were left off the list completely. “That sounds about right,” Eve Simon, host and executive producer of the Gen X Stories podcast, told Fast Company. “We’re ignored. Half of us will say we’re happy we’re ignored; the other half hate it. We’re America’s middle child – the forgotten generation.”

One reason is that this generation is smaller. Gen X has about 65 million people compared to 77 million baby boomers and 83 million millennials. However, more than half of Fortune 500 CEOs are Gen Xers. Think of Elon Musk and Jeff Bezos. “We’re the bridge/translator generation,” Lindsey Pollak, who writes about multigenerational workplaces, told Fast Company. “We entered a workplace dominated by baby boomers. We thought it’d be our turn once they retired; but then their kids, the millennials, started entering the workforce and we had to adapt to them.” Boomers have not been leaving their jobs as expected due to the average retirement age increasing from 57 (in 1991) to 61, and the target age has jumped from 60 to 66.

As inSight pointed out, “People from Generation X currently make thirty-one percent of the total US income, even though they only comprise twenty-five percent of the population.” They also founded 55% of today’s startups, and they outspend other generations when it comes to clothing, housing, and entertainment, according to the Department of Labor.

As Gen Xers consider their retirement options, they realize they're in a bit of a pickle – their plans are a mix of independence and uncertainty. This "forgotten" generation, sandwiched between boomers and millennials, has had to navigate many changes, including a shift from reliable pensions to the DIY 401(k) era. Generation X's golden years may be losing their shiny luster.