Generation X and Retirement Readiness - They're (Mostly) Doing it Wrong

New Study Finds Fewer GenXers Have Retirement Savings

Generation X on Shaky Retirement Planning Ground

WASHINGTON, D.C. – The Insured Retirement Institute (IRI) today released the findings from its fourth biennial report on Generation X and their thoughts about, and preparations for, retirement. With only ten years until the eldest of the cohort turn 65, the majority GenXers believe their savings will cover their basic expenses and allow for leisure and travel in retirement. However, this confidence is misguided as forty percent of GenXers have no retirement savings – an increase of 5 percent from the previous study -- and two-thirds have not attempted to calculate how much they would need to save in order to retire.

“Time is running short for GenXers to save for a financial secure retirement,” said IRI President and CEO Cathy Weatherford. “Unfortunately, fewer GenXers are saving for retirement or utilizing professional financial advice than in previous years. The top three retirement risks GenXers are most concerned about are changes to Social Security, high health care costs, and running out of money, and financial advisors are uniquely positioned to help them effectively plan for these concerns. In fact, the research clearly shows that GenXers working with advisors are better prepared for retirement, and far less concerned about the risk of falling short. As the responsibilities of funding retirement falls more on the individual, it is encouraging to see that the majority of GenXers anticipate their own savings will form the bulk of their income. However, they must build sound plans for the use of those savings, including the use of annuities to provide guaranteed lifetime income, and align their expectations with their financial resources.”

Key findings from the report include:

  • Economic satisfaction is up slightly among GenXers, with 67 percent feeling satisfied with their lives from a financial standpoint versus 64 percent in 2016.
  • Six in 10 GenXers have money saved for retirement. This is down from 65 percent two years ago.
  • Of those with retirement savings, seven in 10 have less than $250,000 saved, down from eight in 10 in 2016. However, this shift is the result of those with savings of $250,000 or more nearly doubling, from 12 percent in 2016 to 23 percent in 2018.
  • Six in 10 GenXers believe private employers should be legally required to offer a 401(k) plan to employees, and a staggering 81 percent would like be offered an option to take a portion of their retirement plan balance as monthly, guaranteed lifetime income.
  • Despite their concerns regarding adequqate savings and expenses, and most having either no savings or comparitevely low retirement account balances, 60 percent of GenXers believe they will have enough money in retirement to cover their basic expenses and allow them to enjoy some (36 percent) or extensive (24 percent) travel and leisure activities.
  • The top three retirements risks GenXers are most concerned about are changes to Social Security (66 percent), higher than expected health care expenses (64 percent), and running out of money (59 percent).

This report is based on an online survey conducted by Woelfel Research, Inc. A total of 802 respondents completed the survey between February 1, 2018 and February 4, 2018. Survey respondents were Americans ages 36 to 55, and the results were weighted by age and gender to the 2012-2016 American Community Survey. The margin of error for the survey was +/-3.5% at the 95% confidence level.

For a digital copy of the report, click here.