When it comes to retirement, the baby boomers get all the attention but it is Generation X that faces a retirement crisis.
The Retirement Income Institute looked at the challenges that Gen X must overcome to achieve a success and secure retirement in a recent paper, “Retirement Challenges Facing Gen-X in the Peak 65 Era.” With shrinking pensions, rising longevity, and heavy caregiving burdens for parents and other family members, Gen X risks becoming the most financially vulnerable cohort to reach retirement, researchers said.
The paper said Gen X’s retirement readiness is threatened by a number of factors, including:
- Economic shocks. Eight recessions, student-loan burdens, high health care and housing costs have constrained this generation’s savings during their peak earning years.
- Traditional pension plans are disappearing. Only 14% of Gen X workers have a traditional pension.
- Sandwich generation pressures. 24% of adult caregivers support both parents and children, creating financial and emotional strain.
- Women hit hardest. Gen X women’s median retirement savings ($6,000) is less than half that of men ($13,000). Women of this generation face longer lifespans, higher health care costs and greater risk of Alzheimer’s disease than their male counterparts do.
- Formal retirement-income planning remains low. Only 35% of Gen Xers follow a specific plan.
In addition, the 2025 Protected Retirement Income and Planning Study found 37% of Gen Xers plan to delay retirement due to finances, compared with 19% of boomers. Only 41% of Gen Xers believe their savings will last a lifetime, compared with 62% of boomers. However, 73% of this age group who work with a financial professional said they are confident about their retirement.
Annuities gain attention from Gen X
Annuities are attracting attention from Gen X, the researchers found. When Gen X were respondents were asked what they would do with a $100,000 inheritance, 69% said they would put the money in an annuity instead of in the stock market. But 64% of Gen X respondents said they find annuities the most difficult product to understand.
Jason Fichter, one of the study’s authors, told InsuranceNewsNet the biggest takeaway for advisors working with Gen X is that this age group “is a sandwich generation, so a lot of them are preparing to take care of their parents or their children or both, and that’s why they feel sandwiched in between, which makes one saving for retirement harder for them. So financial planners need to have a good discussion with Gen X about saving adequately for retirement.”
Advisors working with Gen Xers also must make this age group understand “you can’t sacrifice yourself for your parents and your kids, you must make sure you have something for yourself,” he said. “I know that’s a challenge, but that’s why financial planners must have a tough conversation with Gen X.”
Despite the researchers’ painting a gloomy picture of Gen X’s retirement prospects, Fichter said there is hope for this generation.
“The bright spot is that some of Gen Xers have a lot of retirement wealth. They’re just not sure how to change it into retirement income, and that’s where the planning comes in, having that discussion about how to have more protected income.”
