Gen Xers are facing a retirement crisis. Many are not financially prepared for their golden years. A recent study found that 55-year-olds have a median savings of $47,950.
This is 10% lower than the recommended amount of $446,565. The National Institute on Retirement Security reported that the average Gen X household has $40,000 saved for retirement. Dan Doonan, the executive director of NIRS, said Gen Xers have lived through multiple economic crises.
Wages are not keeping up with inflation, and costs are rising. Gen Xers are also providing for their aging parents and adult children at the same time. This puts a strain on their finances.
Their lack of savings is not due to poor planning or individual choices. It is a result of public policy changes and corporate decisions that have put them at a disadvantage. Boomers have benefited from economic policies that no longer exist in the same way.
They had access to pensions and the G.I. Bill to pay for college.
Retirement challenges for Generation X
Data from the Social Security Administration shows that there were 700,800 people getting Social Security payments abroad in December 2022.
This is compared to less than 400,000 people in the year 2000. Boomers tend to believe that they earned their wealth all on their own. However, this mindset overlooks how much national support networks have changed over the years.
They maintain that Gen X should follow the same individualistic approach. Yet the economic environment has changed drastically, making it much harder for subsequent generations to achieve financial security. It does not appear as though Gen X is being offered any solutions to mitigate the retirement crisis they are about to enter.
Significant changes are needed, or Gen X will be left to fend for themselves once again. The extreme level of financial insecurity that 55-year-olds are experiencing is creating major mental and emotional health issues. Close to two-thirds of 55-year-olds believe they will outlive their savings, making their future seem uncertain.
Gen Xers have 5 to 15 years left before they hit 65 years old, which was traditionally the age at which retirement was expected. However, for people born in 1960 or later, the full benefit age is 67. This could be seen as one more way that Gen Xers are being put at an economic disadvantage, setting them up to struggle in their golden years.
