Unprepared Retirees: The Forgotten Generation

Generation X is the forgotten ​generation that rarely is in the news. While baby boomers and millennials had cultural identifiers, ⁣Gen X just hung out there. Sandwiched between the 71.6 million baby boomers and⁢ the strong 72.1 million millennials, Gen X comes in at 65.2 million.

With all⁢ the talk of baby boomers retiring, what about Gen X? They’re reaching the golden years too. But is Gen​ X financially ready to call work quits? Will they have⁣ enough savings or ⁢investments⁤ to maintain their retirement?

Generation X: The Neglected Middle Child

Born‌ between 1965 and 1980, Gen​ X ‌was often ‍referred to as the MTV generation. They grew up during​ dual-income or single-parent homes and were often latchkey kids. They came of age during the AIDS epidemic in ​the 1980s and lived through the fall of the Berlin ⁤Wall.

They endured⁤ hard economic times during the‍ recessions in the 1970s, 1980s, and‌ 1990s. This economic turmoil would continue throughout their adulthood.

College tuition rates soared, and‌ student loans were hefty. Saddled with ‍this debt,⁤ they endured the Great Recession of 2007–09, which gave them a significant setback in their retirement⁤ funds.

46 Percent of‍ Gen X Don’t Have Enough‌ Retirement Funds

In the past, Americans could ⁤count ‍on Social Security covering 40 percent of their retirement ‌and their savings​ covering the ⁢rest. But 58 percent of Gen X plan to rely on their Social Security benefit as a primary source of ⁣income.

Unfortunately,⁢ Medicare reserves are set to be depleted by 2033. This means that even if Congress funds it, ⁤benefit increases to ‌cover retirement may not be available.

Sixty-seven percent of Gen Xers don’t have a retirement plan.‍ To make up for that, roughly 80 percent of Gen ‌X ​don’t think they’ll fully ⁢retire. The result is that not only will Gen X be working through retirement to make ends meet but they ⁤will also probably be the first generation to⁣ break down the⁣ “great wealth transfer.” Eighty-four percent of Gen X don’t plan to leave an inheritance to their children.

Gen X Cares for Two Generations

There are several reasons⁢ that Gen X is in⁣ this predicament. They are pinched in ⁤between their parents and‍ their children. In​ some cases, ⁢they‍ are taking care of both.

Aging baby boomers​ are turning to their children for help. And many Gen‍ X⁢ still have children living at home ​or adult children returning home. Fifty-two‌ percent‌ of ‍millennials ​were forced to return home due to the​ COVID shutdown​ layoffs. This contributed‍ to the rise of multigenerational⁣ living.

A lot of Gen X income is going toward ⁤caring for family members. That leaves fewer funds for ⁤retirement savings.

Traditional Pensions Disappear

They also lost the past generation’s pension parachute. Private-sector employers stopped offering traditional pensions. In 1975, there were 27.2 million ​active pension participants. These⁣ provided retirees with a guaranteed monthly income for life. But by 2019, it had declined ‌significantly.