The first 401(k) generations are creeping ever closer to the traditional retirement age of 65. And survey after survey consistently shows that Gen Xers feel completely unprepared for the next stage of their lives.
In fact, Gen Xers are more likely to be less confident about saving for retirement than any other age group in the U.S., according to BlackRock’s ninth annual survey. Read the Exit Surveysurveyed nearly 3,000 Americans about their financial situation, and found that about 60% feel they are in good financial shape, compared to 68% of Baby Boomers and 77% of Gen Z.
This adds to a growing body of research about the financial hardships plaguing Gen X. investigation The median savings for people around age 55 is $47,950, about 10% of the $446,565 that Prudential recommends people have saved by that age. (The company’s rule of thumb is to have eight times your annual salary saved by age 55.) study A study by the National Institute on Retirement Security, a nonprofit research organization, found that the typical Gen X household had just $40,000 saved for retirement.
There are myriad reasons why individuals don’t save for retirement — they may have other priorities, or they may not be able to cover all of their other expenses each month, especially during times of high inflation — but for Gen X as a whole, financial experts point out that we’re moving away from an era in which companies saved for employees through pensions and other vehicles to an era in which employees are responsible for nearly all of their savings. Save for your own retirementThis has really been accelerated by this generation of workers.
Indeed, while Millennials and Gen Z have had more time to learn from Gen Xers and educate themselves about retirement savings and investments, older generations have become guinea pigs for change.
The good news is that while Gen Xers may feel the least prepared, they’re also the most likely to actually be saving consistently, with 80% reporting that they are doing so, according to the BlackRock survey.
The oldest members of Gen X are now 59 1/2 years old and reaching a milestone in their retirement planning, and financial advisers are encouraging those who can to take advantage of catch-up contributions, or the ability to put more money into retirement accounts such as IRAs and 401(k)s after turning 50.
They’re also the first to benefit from the “millionaire transfer” that will see trillions of dollars transferred from wealthy baby boomers to their younger spouses, children and other heirs over the next decade or so. That could help boost their confidence.
