While most Americans in a new survey feel like the economy (59%) and their financial situation (67%) will improve in 2025, the flip side of the coin is that the same survey found the majority of Americans say they have either stopped or reduced retirement savings (51%), taken on more debt (50%), and haven’t been able to contribute to their savings as much due to ongoing inflation (68%).
Gen Xers (81%), in particular, worry that the rising cost of living will affect their retirement plans, according to the just-released 2024 Q4 Quarterly Market Perceptions Study from Allianz Life Insurance Company of North America.
This comes at a time when members of Generation X—those born in 1965 through 1979—are fast approaching retirement. The oldest members of Gen X will turn 60 this year—about 4.2 million.
And by most reports, Gen X isn’t feeling very optimistic about their prospects for a comfortable retirement. The 2024 Annual Retirement Study from Allianz Life, for example, found Gen Xers have concerning doubts about their financial futures. While 82% of Boomers and 77% of Millennials said they felt confident about being able to financially support all the things they want to do in life, just 62% of Gen Xers said the same.
Remember that last year, a Natixis study that found almost half of Gen Xers said they believe it would take a “miracle” for them to retire securely. The report found that 44% of Generation X workers say it would be miraculous if they could retire, while 24% believe they won’t be able to retire at all.
Indeed, a leading worry for Gen Xers is that they have not saved enough for retirement. The majority of Gen Xers (55%) in Allianz Life’s 2024 Annual Retirement Study said they wish that they would have saved more.
“Gen Xers are reaching crunch time for retirement planning,” Kelly LaVigne, VP of Consumer Insights, Allianz Life, said at the time. “For Gen Xers, retirement is no longer this far off idea. That can feel stressful, but by preparing now, they can create a strategy that will help them seek their ideal retirement. The good news is that it is never too late to prepare for retirement. You can wish you started sooner, but you’ll never wish that you waited longer.”
Balancing dual caregiving roles for children and aging family members isn’t helping. More than half (56%) of Gen X investors currently provide financial support to their parents or children, according to Nationwide’s 10th annual Advisor Authority Study, released in Dec. 2024. Among them, more than one in five (21%) report taking on large levels of debt to manage this responsibility. To meet these financial commitments, a quarter (24%) of Gen X investors are taking on credit card debt, while more than a third (35%) are reducing nonessential expenses.
It’s also taking a toll on their retirement savings. One in five (20%) report being unable to save for retirement, while 23% in the Nationwide study said they have reduced or halted retirement savings due to supporting their children and/or parents. On top of that, 16% have tapped into retirement accounts or investments to manage these financial pressures.
The Nationwide study found Gen X is the least optimistic about their financial outlook over the next year (36%) compared to other generations. Gen Z (40%), Boomers (45%) and Millennials (49%) all reported being more optimistic.
Even so, Nationwide found Gen X is taking steps to manage short-term disruptions. Six in 10 (60%) pre-retiree (aged 55-59) Gen X investors have adjusted their portfolios in response to high inflation, and 67% report having sufficient savings to survive a potential recession in the next 12 months.
“While it’s understandable that Gen X investors are less optimistic about their financial outlook, their life experience has also made them more pragmatic,” said Craig Hawley, president of Nationwide Annuity. “A big challenge for the Sandwich Generation is that they often put the needs of their loved ones above their own, leaving them in a potentially precarious financial situation that can have long-term implications. It’s encouraging to see some are taking action to address these challenges.”
SEE ALSO:
• Gen X Planning to Retire Later Due to Caregiving and Inflation
