Generation X is often referred to as “the forgotten generation,” and that rings true in various facets of life—including retirement.
As far back as the turn of the century, the financial media’s attention was laser-focused on the eventual (and, starting in 2011, actual) retirement of the Baby Boomer generation. We still have several years before all Baby Boomers hit retirement age, and the conversation is shifting … but largely toward Millennials and how ready they are for retirement.
Forgotten by most again is Generation X, born between the years of 1965 to 1980, and set to start hitting retirement some 15 years earlier than Millennials.
And on that front, Gen X unfortunately looks behind the 8-ball as it pertains to retirement. Whether they simply didn’t have the means, weren’t educated enough about the importance of saving for their post-career years, or any other reason, the average retirement account balance for Gen X workers isn’t as high as they’d hoped—and as a result, most Gen Xers are worried they won’t be able to retire comfortably.
What does Gen X’s retirement picture look like? I’ll dive into a number of statistics that explore Generation X’s readiness for, and mindset about, retirement. (And for those who feel they’re behind, regardless of age, I’ll offer some tips on how to get on track.)
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Table of Contents
Gen X Retirement Statistics
Read on as I dig into the specifics of how much Generation X has saved, their financial fears, and more. These statistics come from a variety of studies and surveys about Gen X’s retirement preparedness.
There’s No Denying That Gen Xers’ Retirement Savings Need Work
The average retirement savings balance among members of Gen X is $108,600. Seeing as how many Gen Xers find themselves well into their 50s, you can quickly see the problem this poses for retirement. (Source: Northwestern Mutual1)
Consider this: At 55 with $108,600 saved, you’re aiming for retirement at 65. Even with aggressive assumptions (additional monthly savings contributions of $400 and a 7% annual return even though requiring a stock-heavy portfolio needed for achieving that type of return is less suitable nearing retirement), you’d reach roughly $288,000.
Would that amount fall short of what’s needed in retirement over a longer time horizon? $288,000 might seem decent, but consider this: Over 20 years of retirement (potentially!), the 4% rule translates to a mere $11,520 annually (initially, since this withdrawal rule requires you to adjust for inflation over time). With Social Security uncertain and averaging $21,900 per year as of the latest Social Security benefit report from December 2022, this picture might need some additional savings help.
Now, we’ll explore several Gen X retirement statistics to provide a fuller context of the generation’s preparation for retirement.
1. 45% of non-retired Gen Xers say they’ve done no retirement planning.
Comparatively, only 43% of Millennials can claim the same.
Also troubling in its own right: Some 30% of non-retired Baby Boomers claim they haven’t planned at all for retirement. (Source: Schroders)
2. Only 55% of Gen X workers participate in an employer-sponsored retirement savings plan.
The small share of Gen Xers who still have student loan debt are more likely to work for an employer that sponsors a retirement plan (76%), and they’re also more likely to participate in those plans (66%). Also of note: Hispanic Gen X members trail all other demographics, at just 35% participating in an employer-sponsored retirement plan. (Source: National Institute on Retirement Security)
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3. Only 13% of Gen X workers still carry student loan debt, but it’s not insubstantial—the average is a bit more than $40,000
On the one hand, Gen Xers that do still have student loan debt also have higher annual incomes (and thus have more means of paying off those student loans). However, while they’re more likely to have access to (and use) employer-sponsored retirement accounts than Gen Xers without a college degree, the National Institute on Retirement Security (NIRS) says Gen Xers still paying off student loans “have lower net worths and are more likely to fall short of their retirement savings targets, at least in part due to student loan debt.”
A couple demographics notes: Women account for 60% of Gen Xers with student loan debt. Also, Asian Americans are the least likely among Gen Xers to still have student loans outstanding. (Source: National Institute on Retirement Security)
Related: Student Loan Interest Deduction: How Much, Eligibility + More
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4. About 66% of Gen Xers worry that they won’t meet their workplace plan goals.
According to Schroders, two-thirds of non-retired Gen Xers worry that they won’t grow their workplace retirement plan savings to the level they’d hoped for. That fear is pretty similarly shared by other generations—64% of Millennials and 61% of non-retired Baby Boomers have the same worry. (Source: Schroders)
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5. Gen X workers expect to have less than 60% of what they need saved by the time they retire.
According to Schorders, non-retired members of Generation X expect to have just $661,000 by the time they retire. However, they believe, on average, that they’ll need roughly $1.1 million to retire comfortably. That’s a roughly 40% shortfall. (Source: Schroders)
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6. The difference between Gen X’s retirement haves and have-nots can be measured in the hundreds of thousands of dollars.
When considering the mean (average), the top quartile of Gen X holds almost $250,000 in retirement savings while the bottom quartile holds only $35,000.
When considering the median (midpoint), the bottom half of Gen X households has troublingly little saved for retirement. The second quartile has just $4,290 saved, while the bottom quartile has just $200 in retirement savings! (Source: National Institute on Retirement Security)
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7. Gen X workers are allocating an average of 32% of their assets for retirement to cash.
That’s right—”despite their time horizon and sizeable retirement savings gap,” Schroders says, Gen Xers are effectively parking a third of their money in cash. That means the money will not only fail to grow, but it’s doomed to lose value to inflation.
When questioned about why they’re investing such a large chunk of their portfolio in cash, nearly two-thirds (63%) say they’re worried about losing their money. (Source: Schroders)
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8. Nearly a quarter of non-retired Gen Xers are unsure about what they’re investing in.
According to Schorders, 24% of Gen Xers said they “are not sure how best to invest their savings.” This admitted lack of information is also factoring into Gen X stashing large swaths of their savings into cash. (Source: Schroders)
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9. Only 14% of Gen X has a pension plan.
The National Institute on Retirement Security says Gen X is “the first generation to enter the labor market following the shift from defined benefit pension plans to 401(k)-style defined contribution accounts.” Very few Gen Xers have pensions as a result—only 14% of the generation’s future retirees have a pension plan. (Source: National Institute on Retirement Security)
Indeed, nowadays, only 15% of private-industry employers offer a pension plan, according to the Bureau of Labor Statistics. (Source: Bureau of Labor Statistics)
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10. 47% of Gen Xers fear Social Security might run out of money.
For one, that’s more fearful than both Baby Boomers (38%) and Millennials (44%). But it’s also worth noting that large chunks of every generation are misunderstanding a pervasive Social Security myth.
That is: While Social Security’s financial situation is worsening, it’s not going broke. Social Security isn’t going broke, and it won’t fully run out of money. Social Security’s reserve, which stood at $2.8 trillion as of 2022, is at risk of running out by 2034—and if it does, Social Security will likely have to reduce payments to about 80%. But the rest will continue to be paid from annual tax revenues. (All of this assumes no fix to Social Security’s situation, which is not a given.)
One other note: Just 11% of Gen X plan to wait until they are 70 to receive maximum Social Security benefit payments. (Source: Schroders)
Related: How Are Social Security Benefits Taxed?
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11. 84% of non-retired Gen X workers are “concerned or terrified” of the thought of no more regular employment paychecks in retirement.
By comparison, 74% of non-retired Baby Boomers, who are much closer to the finish line, feel the same way. Unsurprisingly, only 49% of Millennials, who are quite a ways away, expressed a similar worry. (Source: Schroders)
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12. 61% of non-retired Gen X workers say they have no confidence that they can achieve a “dream retirement.”
Meanwhile, only 49% of Millennials and 53% of non-retired Baby Boomers believe the same about their own retirements. (Source: Schroders)
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13. Gen X members spend an average of 1.5 hours each day worrying about money.
This is nearly double the 0.8 hours per day Baby Boomers stress about their financial situation. And it’s only slightly less than the Millennial average of 1.7 hours. (Source: Schroders)
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14. Only 12% of Gen Xers predict an inheritance will be part of their retirement income.
The Baby Boomer generation is expected to pass down more than $70 trillion, but Gen Xers expect to be the “Forgotten Generation” in that regard, too. Just 12% say inheritance will be a source of retirement income. (Though it’s possible some respondents expect to receive an inheritance but just don’t think it will be used toward funding their retirement.)
On the flip side, most Gen Xers (84%) aren’t planning on leaving an inheritance, either. (Source: Prudential Financial)
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15. Almost half of Gen X workers expect to retire later than anticipated.
According to Prudential Financial Plus, 40% are planning to work part-time after full-time retirement. (Source: Prudential Financial)
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16. Nearly half of surveyed Gen Xers worry they won’t be able to retire at all.
The 49% of Gen Xers who worry retirement won’t be an option is from a 2023 Natixis survey. It’s also up from 2021, when 42% of Gen Xers expressed the same concern. (Source: Natixis Investment Managers7)
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17. On average, Gen Xers start saving for retirement at age 36.
This is younger than Baby Boomers, who on average got their start at age 44, but older than Millennials (27) and Gen Z (20). Of course, this only accounts for people who have already started planning, so you can expect the younger generations’ averages to trend higher as more Gen Zers and Millennials start saving for retirement. (Source: Fidelity8)
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18. Just 40% of Gen Xers say they use financial advisors for retirement planning.
This is lower than their younger counterparts—roughly 47% of Gen Z and 54% of both Boomers and Millennials get help on their retirement planning from a financial advisor. (Source: BlackRock via Axios9)
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So How Can Gen X Meet Retirement Savings Targets?
The data is, in a word, discouraging. But Gen Xers shouldn’t just give up. Here are a few ways anyone can get their retirement plans back on track—and many of these tips are applicable to several generations, not just Generation X.
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1. Invest More Aggressively
Above, I said that Gen Xers are allocating nearly a third of their retirement assets to cash. That’s way, way too much. While the exact percentage depends on your individual circumstances, most investment experts say you should allocate anywhere between 2% to 10% of your investment portfolio in cash or cash equivalents. Why? Because you need most of your portfolio working for you, whether that’s more aggressively growing in stocks, or at least collecting interest in fixed-income investments.
Related: Best Fidelity Retirement Funds for an IRA
2. Prioritize Retirement Over Your Child’s College Fund
It’s honorable to want to cover your child’s future college tuition in full. But if you’re behind on your retirement savings, you need to reprioritize and contribute more toward retirement.
Your child will have options: They might be able to get scholarships or financial aid, cover some of their own costs through a part-time job, or attend school through a combination of cash and student loans. But you will have far fewer options if you retire without enough money. Only after your nest egg reaches appropriate levels (ask a financial professional to determine what those are) should you bump up your education savings again.
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3. Make Smart Use of Retirement Accounts
You probably already know that retirement plans such as 401(k)s and individual retirement accounts (IRAs) offer tax advantages that make them ideal vehicles to save for your post-career life. But you might not know how to maximize those advantages.
In short: Even if you have multiple retirement accounts, you shouldn’t necessarily be splitting your savings equally among them. You should have a list of priorities—indeed, we can show you, in order, how to max out your 401(k) and other retirement accounts.
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