Baby boomers may just be the last generation to have had a smooth and financially secure retirement. For their children, most of whom are Generation X, retirement will not be as easy as it was for their parents.
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Cost of living, healthcare and housing prices are rising faster than wages — eroding savings and increasing reliance on credit, according to Natalia Brown, chief consumer affairs and creditor relations officer at National Debt Relief (NDR). Many Gen Xers are finding they need to work longer, delay retirement or tap into their limited savings just to stay afloat.
Here are some of the other reasons why Gen X can’t retire like boomers, and what they can do about it.
Many Gen Xers are entering their 50s and early 60s with both debt and significant anxiety about their finances, Brown said, citing an NDR survey which found that “most Gen Xers in debt lack confidence in their ability to retire as planned and have deep concern that Social Security alone won’t be enough to sustain them.”
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Additionally, “Gen Xers have been through a lot” at the economic level, according to Jay Zigmont, CFP, founder of Childfree Trust.
“Job disruptions disrupt retirement savings. Crashes add to the uncertainty and may result in Gen Xers having less money saved and taking less risk when investing,” he said.
Indeed, unlike boomers, Gen Xers have faced major economic disruptions during their critical wealth-building years, such as the dot-com crash, the 2008 housing crisis and the COVID-19 pandemic. Add to this “stagnant wages and rising costs,” Brown said it’s no surprise that many Gen Xers now face financial strain.
These economic hardships have also left many Gen Xers feeling financially cautious, if not discouraged. However, she said that financial confidence can be rebuilt “with a plan, support and the belief that it’s not too late.”
Gen Xers are also a key “sandwich generation” with many of them financially supporting both their children and their aging parents, sometimes while still managing their own debt. “This juggling act makes it extremely hard to prioritize retirement savings,” Brown said. She pointed out that “these overlapping responsibilities are draining both time and money, which is why so many Gen Xers feel behind.”
