On Retirement, Gen X Is Absolutely Screwed - InvestingChannel

On Retirement, Gen X Is Absolutely Screwed

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On Retirement, Gen X Is Absolutely Screwed

We know full well there’s a retirement crisis in America. However, if this data from Clever is anywhere near accurate – and we think it is – things are worse than we initially thought. Particularly among Generation X. 

Gen X includes people born between 1965 and 1980. So they’re between 42 and 58 years old today. 

Consider some of the most shocking data first: 

  • 22% of Gen X have nothing saved for retirement. 
  • 20% have never saved for retirement. 

This tells us a few closely-related things: Gen X has never had a large enough budget surplus at the end of the month to save. If they did, they spent it. And, some Gen Xers started to save but economic conditions (e.g., job loss, recession, housing crisis, pandemic, inflation) forced them to stop. 

To the point of if they did, they spent it.

Certainly, some Gen Xers truly don’t have a penny spare after paying for their needs. Not to sound harsh, but we have to wonder how many spend their extra money on things they don’t need. Rather than prioritize retirement savings, they kick the can relying on their parents or anticipating an inheritance so they can “afford” the lifestyle they want to live now. 

Don’t get mad at us. We’re just saying

Now, more gloomy data:

  • 56% of Generation X has less than $100,000 saved for retirement. 
  • 55% believe they’ll require $500,000 or more for a comfortable retirement. 

Which brings us back to choices. And the relationship between needs and wants that’s so often ignored in this conversation. 

  • 49% of Gen X carries credit card debt. 
  • Among this cohort, 55% have more than $5,000 in credit card debt. 
  • 44% of Gen Xers blame baby boomers (in some cases, their parents!) for problems in the U.S. economy. 

Here again, is that credit card debt there because it’s a means to the end of survival? Or is it because you can’t skip brunch and cocktails with your besties? 

Did home ownership get in the way?

  • 80% of these Gen X respondents say they carry some form of debt. 

These numbers indicate that it’s not all credit card debt. There must be student loans, auto loans, other forms of credit and, yes, mortgage debt in the mix.

  • 52% of Gen Xers in debt have at least $10,000 in mortgage debt. 

Home ownership has always been the holy grail of the American dream. The data say that dream is likely dying. However, Gen X watched Mom and Dad not only save for retirement (or wait for Social Security and a pension), but become homeowners. As the world changed, they either didn’t notice or ignored the writing on the wall and tried to do likewise. 

So they prioritized home ownership as more than righteous and responsible personal financial tonic. Maybe they’re even house rich and cash poor. Either way, they don’t have money saved to quit work altogether anytime soon, if ever. 

  • 37% of Gen Xers think they’ll be able to retire by the time they’re 65. 
  • 11% think they’ll never retire. 
  • 4% don’t want to retire. 

The Juice thinks the last option might end up the only option for many. Unless you have a house you can sell for big money followed by a subsequent and meaningful downsizing or you stand to inherit a ton of money, we’re not sure how retirement at any age will fly for Generation Xers who have so little – and, in some cases, nothing – socked away. The 19% of Gen Xers who think they’ll be able to retire before they turn 80 might be the closest to realistic in the bunch.  


The Bottom Line: We hate to give the same old tired advice you see attached to stories about the retirement crisis in the popular financial media. Cut your expenses. Double your savings. Start an IRA, even if it’s only with $50. Get a side hustle. Become a one-car household. All blatantly obvious moves. Moves you have to have the will and focus to execute and sustain. 

Do these things, yes. Absolutely. However, focus on staying physically and mentally healthy. Because absent a financial windfall or a significant increase in earnings alongside a renewed commitment to savings, the numbers on retirement simply don’t add up. Generation X might need to work – to some degree – well into their golden years.

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