As the Sun Sets on Gen X Careers, Dark Clouds Gather

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Worried woman, Generation X

Generation X is the forgotten age cohort. Sandwiched between the massive baby boomer and millennial generations, the folks born between 1965 and 1980 are often overlooked.

But impending retirement has put Generation X in the spotlight for a change, and things don’t look so good. In fact, the members of this generation face a “dismal retirement outlook,” according to a recent report by the National Institute on Retirement Security (NIRS).

The bottom half of workers in Generation X have put away just a few thousand dollars for retirement. Overall, a typical Gen X household has a measly $40,000 in retirement savings.

Most Gen X retirement wealth can be found in the coffers of a relatively small number of higher earners. Black and Hispanic Gen X earners have much lower rates of retirement savings than do earners who are white.

Although Generation X is relatively small compared with the generations that preceded and followed it, 64 million Americans — or nearly 20% of the population — belonged to Generation X as of December 2020.

In a summary of the findings, Dan Doonan, NIRS executive director, says the vast majority of Generation X is “not even close to having enough savings to retire.” He adds:

“This really isn’t surprising given the terrible retirement hand that has been dealt to the latchkey generation. Most Gen Xers don’t have a pension plan, they’ve lived through multiple economic crises, wages aren’t keeping up with inflation, and costs are rising. The American Dream of retirement is going to be a nightmare for too many Gen Xers.”

Recent legislation at both the federal and state levels should help mitigate the impending retirement fiasco bearing down on Generation X, according to the institute.

The federal Secure Act and Secure 2.0 Act and the passage of laws in various states have helped broaden access to retirement savings programs, which could help. Changes that have made the federal Saver’s Credit more generous also might benefit some members of Generation X.

But Generation X still faces an uphill climb in securing its retirement. According to the institute:

“The youngest members of Generation X are at least two decades away from retirement. They still have time to improve their financial situation, but if current trends continue, many Gen Xers will experience a decline in their standard of living during retirement.”

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