Doubling down on their retirement concerns, almost half of Gen Xers believe it would take a “miracle” for them to retire securely, finds new research today by Natixis Investment Managers.
The latest report by the firm finds 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.
Deterred from saving due to caregiving responsibilities and day-to-day costs, Natixis finds that the average Gen Xer with a median household income of $150,000 has only saved $250,000 for retirement—barely enough to carry them through the long-term. As this group expects to retire starting at age 60 (a whole nine years earlier than Baby Boomers), Natixis notes that a lack of savings, coupled with an inability to ask for help, could be the ultimate hurdle for Gen Xers.
“Gen Xers are the Jan Brady of demographics. They’re sandwiched between Baby Boomers and Millennials, and they’ve been overlooked. Now many find themselves caring for both aging parents and growing children while under pressure to fund their retirement,” said Dave Goodsell, executive director of the Natixis Center for Investor Insights. “While it’s not surprising for investors in this ‘pre-retirement’ phase to feel a degree of anxiety, the results of our survey underscore this generation’s unique challenges as they consider their retirement plans.”
A myriad of savings challenges
As a solution to their savings troubles, 46% of Gen Xers say they are willing to work longer. Yet, continuing work may not be the answer to aiding their retirement needs: 30% are worried they won’t be able to continue to work as long as they want to, as others report qualms regarding future healthcare costs. Over a third of Gen Xers surveyed are worried they’ll go broke trying to afford medical expenses in retirement.
A majority of respondents are making adjustments in crossing a challenging macroeconomic environment, as 75% fear the impact that U.S. debt will have on their retirement benefits. Fifty-eight percent believe it would be difficult to “make ends meet” without these benefits.
Additional factors, including inflation, are triggering some investors to adjust their saving and spending. Twenty-five percent of respondents credit higher inflation with urging them to save more.
Meanwhile, other investors are questioning their financial freedom in retirement, and whether their location plays a factor in affording everyday costs. While 46% expect having to live frugally in retirement, 30% worry having to move to a more affordable city or state.
Welcoming support
Natixis’ research regards Gen Xers as one of the more self-reliant generations, yet that doesn’t mean they can’t ask for help when needed. Sixty-one percent of respondents acknowledged the importance of working with an advisor when navigating inflation, and 76% of Gen Xers say they want in-person professional guidance.
Among the most important facets in an advisor-client relationship for Gen Xers includes having an advisor who gives financial planning advice (53%), is accessible to them (42%), listens to them (40%), and helps them understand investing (39%). The latter is especially important as 49% of Gen Xers reported that they do not fully understand all of the investments in their retirement plan, reports Natixis.
“Amid the complexities of retirement planning, Gen Xers are at a critical juncture, grappling with concerns over the impact of high costs, market volatility, and dwindling benefits,” said Liana Magner, executive vice president and head of Retirement and Institutional in the U.S. for Natixis Investment Managers. “As they seek solutions to address these anxieties, it will be increasingly important for them to utilize resources, including financial advisors, to deploy strategies that help them navigate retirement.”
Additional insights from Natixis’ “Generation X Report” can be found here.
SEE ALSO: