Gen X Retirement Struggles: Praying for a Miracle To Turn Things Around

The discussion of Gen X’s retirement struggles has reached a breaking point as many claim it will take a “miracle” for them to ever retire. Despite being touted as the golden years of their life, the future looks anything but glorious for the Gen Xers who will soon be reaching the landmark age of 60. Gen X’s retirement issues have been linked to many different elements but the unstable financial markets that persist today and the switch to 401(k)s over the course of their working years have been the most damaging to their retirement plans. 

A recent survey on Gen X’s retirement plans found that 60 percent of them were worried about having to work much longer and 47 percent were worried they wouldn’t be able to work long enough to get to their goal. The population is understandably stressed. 

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Gen X’s Retirement Struggles Bring the Plight of a Generation to the Forefront

Have you checked in with the GenXers in your life and asked about their retirement plans? Many think it might be best to avoid the subject considering how sensitive and pressing of an issue it is for them right now. The Gen X population refers to those born between 1965 and 1980 and the oldest of them will turn 60 next year. As of July 1, 2024, many of them will turn 59 and a half, which is a critical point for many in dialing down on work and shifting toward retirement. For Gen Xers with solid retirement plans, it marks a good time to withdraw funds from their 401(k) or IRA without facing the 10 percent penalty that they might have otherwise faced for early withdrawals. 

To seek the full potential of their Social Security benefits, workers need to wait till they turn 66 years but early retirement benefits can be received with a 30 percent deduction at 62. A large number of those from the generation are close to the typical age of retirement but becoming eligible and actually receiving benefits are two separate things. Unfortunately, as things stand with the Gen X retirement issues, it doesn’t seem likely that too many of them will be in a position to get started toward withdrawals. 

What Do We Mean By Gen X Retirement Savings Complications?

A study by asset management company Natixis Investment Managers found that 48 percent of Gen X folk believe they will not have the funds they need to retire securely. The Gen X retirement issues and fears didn’t stop there. 41 percent of those surveyed felt that inflation was destroying their dreams of retirement, 37 percent of them felt the government may fail to provide them with the full benefits owed to them, and 31 percent of them were certain they would never save enough. These numbers paint quite a bleak picture, to say the least.

Despite Gen X’s retirement crisis, a large number of them hope to retire by 60, but if their financial situation is accurately represented by these numbers, it might be a tough task. It’s no wonder that 28 percent of them are certain they will have to return to work after retirement. 

The eye-opening study revealed that only 54 percent of them felt they had the freedom to do what they wanted if they did retire. For the rest, some were resigned to the possibility that they would have to live frugally, others predicted that they would have to sell their house and move to a less expensive location, and others even acknowledged that they would have to rely on their near and dear ones to get by. 

It’s clear that many of those who did see themselves retiring didn’t expect to have an easy time. The idyllic retirement is nowhere to be seen and Gen X’s retirement struggles only grow. 

What’s Causing the Gen X Retirement Crisis?

You might wonder why Gen X’s retirement plans have turned out so badly, but there are quite a few factors that have played into their situation. The generation has been repeatedly presented with one tumultuous phase after the other and the financial market has rarely let up to allow them to save. Gen X’s retirement savings have been difficult to track, as financial restructuring initiatives like the 401(k) left them unable to organize their own retirement funds without anyone properly teaching them how. 

With scattered savings that didn’t hold up to market crashes, the generation has also been sandwiched between looking after their elderly parents as well as their adult kids who have struggled with the shifting labor markets and periods of unemployment. High levels of inflation have made it harder to save and the cost of living has gone up significantly over the years. 

Adding to their fears, reports suggest that the funds to pay Social Security benefits could run out by 2035. This may not mean an end to the Social Security system entirely, but retirees may have to settle for only 83 percent of their full benefits. Considering this is just an estimate, there could be more cuts later down the line 

Despite Disheartening Gen X Retirement Survey, Not All Hope Is Lost

In an interesting turn of events, Investopedia found that 59 percent of Gen Xers invest in cryptocurrency, which means that many of them are looking at alternate sources of long-term investment, Considering that 48 percent said that the digital currency was too confusing for them, the benefits of investing in the segment aren’t going to extend to everyone but it is good to see a large chunk of them look into other savings options. To deal with their retirement struggles, Gen X needs reliable financial advisors. Now is the time for them to take a closer look at their assets and plan for how they are going to approach the next few years in a way that works best for them. While their 401(k)s and Social Security benefits will come in handy, any support from a diversified portfolio should benefit them. 

Data from financial firm Fidelity showed that for the first time ever, Gen X workers have managed to bring their 401(k) balances higher than those of Baby Boomers, although the difference is minute for now. The numbers also showed that contrary to the worrying Gen X retirement issues, the population was able to save 15.2 percent of their annual paychecks, which is around the 15 percent the company recommends.

Canceling Gen X’s retirement plans or retiring and living in misery doesn’t have to be the only two options for the cohort. Blackrock CEO Larry Fink had brought up the idea of a delayed retirement earlier this year and it might be a good time to take the idea into consideration. A few more years of working with an advisor and saving diligently could add enough to their savings to secure a more comfortable retirement. This might be a tiresome strategy for those who were looking forward to their years of rest, but it may be the most beneficial solution for those Gen Xers caught up by the retirement struggles.

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