Generation X: The Silent Achievers of Retirement Savings
Despite being labeled as the least financially prepared for retirement, Generation X is quietly making strides in saving for their golden years. A recent report from the FINRA Investor Education Foundation reveals that Gen Xers are doing better than expected in terms of retirement preparedness and debt management.
A Positive Outlook
Over 60% of Gen Xers have some type of retirement account, and the majority of them are actively contributing to their accounts. This is a significant improvement compared to younger generations and on par with baby boomers. Additionally, a recent Bank of America research report found that Gen X households are investing large portions of their paychecks into additional investment accounts, with the average amount invested being over 40% higher than the overall population.
The Rise of “Super Savers”
Research from the Transamerica Center for Retirement Studies shows that the percentage of Gen X “super savers” – workers who contribute more than 10% of their salaries to their 401(k) or similar retirement plan – has increased significantly from 3 in 10 in 2019 to 4 in 10 this year. This is a remarkable feat, considering the oldest Gen Xers are less than a decade away from their target retirement age of 65.
A Disconnect Between Perception and Reality
Despite these positive indicators, many Gen Xers remain pessimistic about their financial situation. This disparity between objective and subjective financial health is attributed to the fact that Gen X is the first generation to do worse than their parents, leading to unmet expectations. Additionally, they are currently navigating a financially demanding life stage, juggling the costs of raising children, paying college tuition, and caring for aging parents.
Debt Anxiety
The FINRA research also highlights high levels of anxiety about debt among Gen Xers, particularly student debt. About 1 in 4 Gen Xers reported having student loan debt, and 60% are concerned about paying off these loans. Interestingly, 1 in 5 Gen Xers with student loan debt hold it for someone else, such as a child or grandchild.
Time to Take Control
While many Gen Xers lack confidence in their ability to retire comfortably, there are steps they can take to improve their situation. Creating a retirement plan, for instance, can help boost confidence and provide a clear direction for the future. With the oldest Gen Xers approaching 60, it’s essential to start thinking practically about what retirement will look like and take action to secure a comfortable financial future.
Leave a Reply