More Than a Third of Gen X Plans to Delay Retirement
Perhaps it is no wonder that Gen X is being characterized as the least confident and least financially prepared for retirement across every major measure.
Generation X (ages 45-60) has lived through eight recessions, is saddled with student loan debt, and deals with high healthcare and housing costs that have constrained savings during peak earning years. Throw in the fact that traditional pension plans have gone from accounting for 40% of all retirement plans in 1983 to just 6% by 2022 (only 14% of Gen X has a traditional pension) making them the first 401(k)-only cohort—and “sandwich generation” pressures of 24% of Gen X having to support both aging parents and children—and you can see why Gen X is up against it when it comes to saving for retirement.
A new paper from the Alliance’s Retirement Income Institute, “Retirement Challenges Facing Gen X in the Peak 65 Era,” dives into the financial challenges of this so-called “forgotten generation.”
New insights from the report find that just 41% of Gen X believe their savings will last a lifetime (vs. 62% of Boomers), and 37% expect to push back retirement because of financial strain, nearly double Boomers (19%). Four in 10 Gen-Xers report that they expect to work part-time in retirement for income and/or a new purpose.
Gen-X women in particular face compounded risks due to lower savings, longer life expectancies, and disproportionate caregiving burdens. The report finds Gen-X women’s median retirement savings is less than half that of men.
Gen X is also worrying about potential cuts to Social Security benefits. The oldest Gen-Xers turn 65 in 2030—just three years before the predicted Social Security trust fund depletion date and a potential 23% automatic benefit cut absent congressional action.
The study authors—Jason Fichtner, Ph.D. (former Chief Economist, SSA) and Suzanne Norman (veteran investment strategist)—highlight the challenges and explore how policy proposals and in-plan solutions can help avoid mass hardship in retirement for Gen X. They say the solution is not simply saving more—but creating sustainable, protected income through education, advice, and policy reform.
Among the paper’s recommendations:
• Offer professional financial advice as a workplace benefit.
• Incorporate protected-income products into default (QDIA) retirement plans.
• Increase conversations on cognitive decline, caregiving, and health-care costs.
• Provide annuities as part of employer-sponsored retirement plans, as enabled by the enactment of SECURE Acts 1.0 and 2.0.
The data on which the report is based—the 2025 Protected Retirement Income and Planning Study (PRIP), also shows hope: when Gen-Xers receive advice and access to income tools like annuities, their confidence and security rise dramatically.
The paper’s conclusion notes that challenges facing the Peak 65 generation are even greater for Gen-X, and will be magnified for Millennials, a larger demographic than either the Boomers or Gen-X.
“The old retirement system no longer fits the needs of today’s American workforce. The result is that more Americans will be at risk of entering retirement with Social Security as their only means of protected income, leaving many exposed to financial insecurity,” the conclusion states. “Now is the time to adopt a new retirement security framework… Unless action is taken, many Gen-X retirees will lack sufficient, reliable, and protected retirement income that will last for the rest of their lives.”
Check out the new research paper here.
SEE ALSO:
• The Top Retirement Savings Lessons from Gen Xers
• Gen X Falling Behind on Retirement Planning
• The Peak of Peak 65: Record Number to Reach Traditional Retirement Age in 2025
Veteran financial services industry journalist Brian Anderson joined 401(k) Specialist as Managing Editor in January 2019. He has led editorial content for a variety of well-known properties including Insurance Forums, Life Insurance Selling, National Underwriter Life & Health, and Senior Market Advisor. He has always maintained a focus on providing readers with timely, useful information intended to help them build their business.
