Gen X's Looming Retirement Crisis Is Worse Than They Realize – Expert Compares It to Being Handed A Rubik's Cube And Told 'Good Luck, Kid!'

Gen X, often called the "sandwich generation" or "the latchkey generation," is heading toward a retirement crisis many don't even realize they're facing. 

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A recent report from Principal found that 59% of workers who hadn't signed up for a 401(k) believed they were enrolled through their employer, only to find out they had no retirement savings. This issue is even more pronounced among Gen X, with 64% mistakenly thinking they had a 401(k) when they didn't.

With Gen X so close to retirement after baby boomers, their lack of savings is a serious concern. Many assumed that 401(k)s, which often replaced pensions when they entered the workforce, would set them up for their golden years. However, financial experts warn that this generation’s reality is more complicated.

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In a Newsweek article, finance expert Michael Ryan compared Gen X's retirement situation to "being handed a Rubik's Cube and told, ‘Good luck, kid.'" He explains that Gen X has also been prone to job-hopping, often leading to missed retirement savings opportunities. It's a financial "tug-of-war," Ryan says. Mom and Dad need help on one side, while on the other side, their adult kids can't even afford to move out. 

Given the circumstances, it's not surprising that Gen X is considered the most stressed generation alive. Saving for retirement isn't high on the list of priorities when they have so much on their plates. 

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The sandwich generation is squeezed between caring for aging parents and supporting their own children, leaving little room to focus on retirement. Unfortunately, this responsibility during prime earning years can have a lasting impact on their financial future.

The confusion around retirement accounts doesn't help either. Many Americans confuse 401(k)s with IRAs, separate accounts with different tax advantages. There's a clear need for better education on the differences between various retirement plans, such as Simple IRAs, SEP IRAs, and 401(k)s. 

Experts agree that the situation calls for action, not just on the part of workers but employers as well. Ryan emphasized the importance of automatic 401(k) enrollment, noting that it should be a standard feature in the workplace. He also encouraged Gen X to take a more proactive approach. "Time to channel that slacker spirit into something useful like checking your retirement account more than once a decade."

Assumptions about retirement savings can be risky, especially for Gen Xers who often believe their current job offers the same retirement benefits as previous positions. As retirement approaches, this can lead to the unexpected realization that the job they've held for years didn't provide a 401(k) as they had assumed. 

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For Gen X, the message is clear: retirement is coming whether they're ready or not. It's time to pay closer attention to savings and take steps now to avoid a retirement crisis down the line. If you're worried about retirement or want to ensure you are on track, consider consulting a financial advisor who can review your finances and help create a perfect plan for your goals. 

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