Generation X Unprepared For Retirement: $250,000 Median Savings Won't Last 20 Years

A recent survey by Natixis Investment Managers highlights the unique challenges Generation X faces as they approach retirement.

The study, which included 2,928 Gen X respondents from a global pool of 8,550 individual investors, uncovers a significant gap between expectations and reality, according to Think Advisor – and reveals some key insights for advisors engaging with Gen X clients.

North American Gen Xers aim to retire at 60 and expect their retirement to last 20 years. However, with a median household income of $150,000 and median retirement savings of only $250,000, they are unprepared for a retirement lasting two decades, not to mention the much longer one that their life expectancy suggests they'll have.

Dave Goodsell, executive director of Natixis Center for Investor Insight, describes Gen X as the “Jan Brady of demographics,” often overlooked in favor of the older Baby Boomers or the younger Millennials.

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The survey reveals that 78% of North American Gen Xers believe funding their retirement is increasingly their responsibility. This self-reliance has led to concerns about delaying retirement (44%), potentially returning to work post-retirement (30%), and the impact of growing public debt on retirement benefits (76%).

Economic challenges loom large, with 85% recognizing inflation as a major threat to retirement security. While 46% are comfortable with investment risks, 78% prioritize safety over performance when forced to choose.

The survey also reveals some serious knowledge gaps in financial planning. Only 2% of Gen Xers correctly answered questions about how interest rates affect bonds, and 48% admit to not fully understanding all their retirement plan investments.

Despite these challenges, Gen Xers show a declining interest in professional financial advice. Only 38% of North American Gen Xers believe they need professional guidance, compared to 56% globally. However, crucially for financial advisors, 79% of Gen Xers prefer in-person advice over digital alternatives.

The survey underscores the importance of tailored financial education and guidance for Gen X. As they navigate the complexities of retirement planning, addressing knowledge gaps and providing personalized advice in-person will be crucial in helping this generation bridge the gap between their retirement expectations and financial realities.

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