‘I’ll probably die before I can retire’ – Generation X, ‘the forgotten generation’ struggles with ‘virtually non-existent’ retirement accounts – The average Generation

By | February 23, 2024

As Generation

Insight from a Fortune article on Yahoo Finance, fueled by responses from countless Gen Xers, exposes the concerns many feel about preparing for retirement. In addition to being tagged with various monikers such as the “forgotten generation” and “the latchkey generation,” a significant portion of Gen X is struggling with the reality of insufficient retirement savings.

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The challenge of securing a financially stable retirement is underscored by data from a report from the National Institute on Retirement Security, which points to a glaring disparity between desired and actual savings among many Gen Xers. This sentiment is reflected in the Schroders 2023 US Retirement Survey, which shows that more than 60% of non-retired Gen Xers doubt their ability to achieve a comfortable retirement.

The research shows that the average Generation

The stories of individual Gen Xers further illustrate the depth of the retirement readiness crisis. “I followed my dreams, as my generation was told to do, but discovered that following some dreams is more expensive than others,” writes one Gen Xer. “My savings are virtually non-existent.” Another candidly says: “I will probably die before I can retire. Nice stuff,” underscoring the bleak financial outlook some face as they approach retirement.

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These personal accounts shed light on the myriad challenges that have contributed to the financial situation Gen X faces. From navigating economic downturns and market crashes to adapting to the shift from pensions to 401(k) plans, Gen Xers have faced significant financial hurdles. Additionally, they bear the burden of higher student debt and healthcare costs compared to previous generations.

However, not all Gen Xers view their retirement prospects through a lens of pessimism. Some have successfully navigated the economic landscape and achieved financial security and even early retirement. While these success stories are less common, they offer a glimmer of hope and a different perspective on Gen X’s retirement readiness.

However, the broader picture remains concerning and calls for action. Industry experts such as Deb Boyden of Schroders highlight the precarious position of Gen X, as they are the first generation to rely primarily on 401(k) plans.

Although Generation Incorporating the wisdom and expertise of a financial advisor into a retirement planning strategy could strengthen Generation X’s efforts to achieve a safe and comfortable retirement.

Financial advisors play a crucial role in navigating the complexities of retirement savings, providing tailored advice that takes into account an individual’s income, assets and retirement goals.

Diversification is a cornerstone strategy for Gen Xers to reduce risk and increase potential returns. By diversifying investments across different asset classes, such as stocks, bonds and real estate, individuals can protect their portfolios from significant losses associated with a single investment. This approach is complemented by exploring alternative investments, including commodities or private equity, that can provide growth opportunities outside traditional markets.

Maximizing retirement savings is important, especially through vehicles such as 401(k) plans and individual retirement accounts (IRAs). For those with access to a 401(k), making the most of employer contributions and taking advantage of catch-up contributions for those over 50 can significantly increase retirement savings. IRAs, both Traditional and Roth, offer unique tax benefits that can be tailored to an individual’s financial situation, with Roth IRAs providing tax-free growth and withdrawals, beneficial to those who expect to be in a higher tax bracket in retirement.

For self-employed Generation A Solo 401(k) plan allows self-employed individuals to make contributions as both employers and employees, significantly increasing the savings potential. SEP IRAs offer entrepreneurs a simple, high contribution limit option, while a Roth IRA remains a flexible choice for those with variable incomes. For those looking to quickly accelerate their retirement savings, defined benefit plans can provide a way to save large amounts in a short period of time, which is especially beneficial for owners of older businesses who focus on catch-up contributions.

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*This information is not financial advice and personal guidance from a financial advisor is recommended to make informed decisions.

Jeannine Mancini has written about personal finance and investing for the past thirteen years in various publications, including Zacks, The Nest, and eHow. She is not a qualified financial advisor and the contents of this document are for informational purposes only and do not and do not constitute investment advice or any investment service. Although Mancini believes that the information contained herein is reliable and from reliable sources, no representation, warranty or undertaking, express or implied, is made as to the accuracy or completeness of the information.

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