Survey finds that nearly half of Generation X lacks confidence in retirement planning

As Generation X gets closer to retirement, many are feeling uncertain about their prospects, with 45% reporting a lack of confidence in being able to retire when and how they want. This generation, currently between the ages of 44 and 59, often finds themselves as part of the “sandwich generation,” responsible for caring for both children and aging parents while also preparing for retirement. Factors such as higher costs of living, the expenses of children, and healthcare and long-term care costs for aging parents are contributing to the financial challenges faced by Gen X.

One of the main reasons for the uncertainty around retirement for Gen X is that they are expected to be the first “401(K) generation,” relying primarily on 401(K)s, IRAs, and individual savings vehicles for retirement. This is a significant shift from current retirees who primarily use pensions for retirement savings. The higher cost of living, moving closer to retirement age, and concerns about the lasting power of retirement savings are all factors contributing to the decreasing confidence in retirement prospects among Gen Xers.

In contrast to Gen X’s negative outlook, younger generations like Gen Z and millennials are feeling more confident about retiring “on their own terms,” with 75% and 71% respectively expressing confidence in their retirement prospects. Baby boomers, on the other hand, reported 68% confidence in their ability to retire as they want. Gen X’s concerns are mainly driven by the challenges of balancing the financial responsibility of children and aging parents with planning for retirement, leading to increased anxiety as retirement age approaches.

Retirement planning poses various challenges for individuals, including saving enough money, navigating inflation and high costs of living, balancing current expenses with saving for retirement, and estimating the funds needed for a comfortable retirement. Among current retirees, 72% reported that their retirement was going as planned, and 70% felt that their retirement planning had set them up sufficiently. Social Security was identified as the top source of retirement income for 77% of retirees, followed by pensions at 48% and personal savings at 41%.

The study highlights the importance of continued financial planning even in retirement to adapt to changing circumstances and maintain financial security. Rising costs of living have impacted the savings of 70% of retirees, emphasizing the need for ongoing financial management and adjustment to ensure a comfortable retirement. The median age of retirement for middle-class retirees is 62, and Americans believe that $1.46 million is the necessary amount to experience a comfortable retirement, according to recent studies by Fidelity Investments and Northwestern Mutual. Efforts to support Gen X in addressing their retirement concerns and planning for a secure financial future are crucial as they approach retirement age.