Gen X investors are feeling financial strain, as many juggle competing priorities that include financial concerns and multiple caregiving roles, finds new research from Nationwide.
Nationwide’s Advisor Authority study, powered by the Nationwide Retirement Institute, finds that 56% of Gen X investors are currently providing financial support to their family members.
Such responsibility takes a severe toll on their chance to save for retirement. One in five (20%) respondents report being unable to save for retirement, while 23% have reduced or stopped saving for retirement because they are supporting their children and/or parents. Others have withdrawn from their retirement to support their caregiving—16% say they have tapped into their retirement accounts or investments to manage financial pressures.
Some are also navigating economic challenges on top of their caregiving responsibilities, with three in ten reporting having less than $100,000 saved for retirement. Twenty-six percent of non-retired Gen Xers say they plan to retire later because of inflation, and 44% expect to retire at 66 years old or later.
While Gen Xers are likelier to be more financially resilient compared to other generations, as many have faced financial crises that span the dot-com crash in 2000 to the Great Recession in 2008, the financial strain with caregiving adds another layer of pressure, says Craig Hawley, president of Nationwide Annuity. “Though these experiences have built resilience, many now face the added financial strain of supporting both aging parents and children,” he says. “For those Gen Xers struggling financially, it’s not too late to get back on track—with the right long-term plan developed alongside a trusted financial professional.”
While this generation is still less optimistic in their retirement outlook, they are taking proactive steps against near-term volatility. According to the findings, 60% of pre-retiree Gen Xers have adjusted their portfolios in response to high inflation, and 67% say they have enough savings to survive a potential recession in the next year.
Others are turning to financial advisors for guidance. Nearly four in 10 (37%) are currently paying for advisor services, up from 29% six months ago. Another 21% believe a financial professional has helped them stay focused on long-term goals, and 32% of Gen Xers who work with an advisor say they have had conversations about retirement readiness.
Financial advisors also say they understand the “unique” challenges that their Gen X clients face, with more professionals providing tools and strategies to help manage family-related expenses in retirement. Close to half (42%) of advisors whose clients provide caregiving to children and/or aging parents are using tax deductions and credits to help them manage the financial pressure, and 36% are suggesting long-term care insurance for clients with aging parents.
Another 35% are helping clients prioritize retirement savings over other expenses through different strategies and tools, like annuity options (82%).
“Gen X investors are at an age where the financial decisions they make can carry massive implications for their retirement security,” added Hawley. “Financial professionals can help this group create a holistic plan for addressing factors like long-term care, taxes and income in retirement. Good advisors can identify gaps and create plans to help clients address them before it’s too late.”
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Amanda Umpierrez is the Managing Editor of 401(k) Specialist magazine. She is a financial services reporter with over six years of experience and a passion for telling stories and reporting news. Amanda received her degree in journalism and government and politics at St. John’s University. She is originally from Queens, New York, but now resides in Denver, Colorado with her partner. In her free time, Amanda enjoys running, cooking, and watching the latest drama show.
