Generation X Does Not Have Enough Money Saved For Retirement

While much of my blog over the past few weeks has been focused on the plight of Millennials, today we are going to take a closer look at the retirement savings outlook for Generation X.   While Millennials have faced many of the same economic hurdles, they have one sizable advantage that Generation X does not, time.  With millions approaching the age of 50, this age cohort is rolling toward retirement age in sore shape, and unless they begin to save aggressively, they will face serious financial challenges in the time of life when previous generations were able kick back.  MarketWatch examined this problem this past week:

“Gen X is in retirement jeopardy,” warns Catherine Collinson, president of the Transamerica Center for Retirement Studies (TCRS), which just released A Compendium of Findings About American Workers backing that up. “At their age, they need to be more focused on saving and planning for retirement, but our research found that many have backed away from it.”

Similar studies from Northwestern Mutual, Allianz Life and New York Life ring a similar alarm.

TCRS had the Harris Poll survey American workers and compared those results with other surveys it had commissioned since 2011. Among the findings: While Generation X has inched closer to retirement, it has grown increasingly less interested in planning for retirement. Specifically:

  • 45% of Gen X workers prefer not to think about or concern themselves with retirement investing until they get closer to their retirement date, up from 35% in 2011.
  • While 11% of Gen X workers said they had no sources of information for retirement planning or investing in 2011, today 25% say that. They’re not using retirement calculators, getting 401(k) advice at work, reading money articles or meeting with financial planners.
  • And although a smaller percentage of boomers and millennials told TCRS they don’t know as much as they should about retirement investing than said so in 2011 (63% of boomers, down from 71% in ’11 and 73% of millennials, down from 82%), the needle barely moved for Gen X: 66% now and 68% in 2011.

While Millennials dealt with the calamities of the Housing Crisis and the Stock Market Crash of ’08-’09 Generation X dealt with them during their early working years.  In previous decades, a workers 30’s to 40’s were a time to amass wealth and implement an early path toward retirement. Not anymore.  Too many Gen X’ers sacrificed their retirement savings to deal with joblessness and stagnating wages.  As a result, few of them have prepared financially for their retirement.

Northwestern Mutual’s report, The Gen X Retirement Dilemma, noted that Gen Xers had the highest levels of financial insecurity of all U.S. generations. A striking 82% said they won’t have enough saved to retire comfortably; 18% don’t think they’ll ever be able to retire.

That may be partly because 37% of Gen Xers told Northwestern Mutual they’ve taken no steps to plan for their financial future. And they concede needing help: 66% said they think their financial planning needs improvement; by contrast, 58% of Americans overall felt that way.

In the Allianz Life Generations Apart survey that came out in May 2015, when Gen Xers were asked how they were planning for retirement, 46% said they’d “just figure it out when I get there.”

To be fair, Gen X financially has “had one body blow after another,” says Chris Blunt, president of New York Life’s Investment Group.

Boomers were already in their 50’s, and had been saving for their retirement for years when the housing market implosion and the Crash of ’08.   For Generation X’ers these trends made saving for retirement almost impossible.  Putting off thinking about retirement is the logical reaction to all of this.

Many were clobbered in The Great Recession of 2008-’09, losing jobs and facing shrinkage in their retirement savings and home values, just as they needed to save for college and retirement (though, for many, their stocks and real estate have bounced back). The first true 401(k) generation, most Gen Xers missed out on qualifying for pensions. They were too young for the big stock market and housing run-ups the boomers enjoyed.

They’re lugging student loans, mortgages and credit-card debt; the average student loan balance for Americans in their 40s is roughly $30,000. Allianz Life found that Gen Xers carry about 60% more mortgage debt than boomers and 82% more nonmortgage debt (student loans and credit cards).

Some are facing caregiving costs for their parents, or expect they will. And looking ahead, the Social Security Trust Fund is forecast to be exhausted just as Gen Xers start hitting retirement age in the mid 2030s.

Those older generations had positive economic trends at their back, as well as pension plans and a decent return from Social Security.  Generation X is the first age cohort that was unable to take advantage of pension plans, favorable prices for health insurance, and the first to get royally screwed over from Social Security.  These economic trends already hint toward a bleak retirement picture, one that becomes frightening when we consider that most of them are not actively setting aside money for their later years.

It’s precisely because of these challenges, however, that you’d think Gen X would be maniacal about planning for retirement. Why aren’t they?

Collinson says the media is partly to blame.

“Boomers and millennials are garnering tons of media attention,” but not Gen X, she says. That’s because boomers and Gen Y are bigger generations and, to use Collinson’s word, “flamboyant,” compared with the in-the-shadows, middle-child that is Gen X.

While Generation Y and Baby Boomers do get a considerably larger amount of media attention, this is ridiculous.  I don’t care what the media has to say about other generations, if I was struggling in saving for retirement, that would be a personal priority.

While the trend away from traditional pension plans to 401 (k) plans, the Housing Bubble, and the Stock Market crash are absolutely key factors here, we can’t go back in time and reverse these trends.  Social Security grabs 6.2% from the personal payroll contributions of Generation X and Millennials and tosses that money into the abyss where it goes toward the whims of politicians and into the pockets of Baby Boomers.  We can fight to take back our six percent.  With that extra 6% back in their hands, Generation X’ers and Millennials can stop waiting around to ‘figure it out’ and begin to address their retirement needs.  Then they can find out just how easy it is to achieve a rate of return far greater than they would ever receive from Social Security.

-R.J. Renza, Jr.

Please take a moment and sign the National Petition to Opt-Out of Social Security. The more signatures we gather, the more pressure we place on Congress and our political leaders.

August marked the release of my first e-book “How Are You Not Angry Yet: How Social Security is Destroying the Futures, Finances and Hopes of Generations X,Y and Z and How We Can Put and End to it,” which takes on Social Security from the perspective of young America in a visceral and humorous way.  “Angry Yet” breaks down the complex topic of Social Security into a way that most Americans can easily understand and find entertaining and is available here.

I was recently mentioned by my favorite economic blogger Michael Shedlock in his post “Question To Millennials: Why Are You Not Mad As Hell Yet?”

I also appeared on The Debt Dialogues, the weekly podcast of “RooseveltCare” author Don Watkins:

Check out my video of how I celebrated Social Security’s 80th Birthday and What Social Security Does To Kids.

You can also follow me on Twitter at


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