The not-so-funny thing about Generation X and baby boomers: The generations bump up against each other in age, but their views on their prospects for retirement and Social Security couldn’t be more different.
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Based on two notable recent surveys, many boomers — who are now between the ages of 60 and 78 — are feeling pretty, pretty, pretty good about retirement. However, members of the often-overlooked Generation X, which this year spans ages 44 to 59 — tend to fall somewhere between gloomy and resigned. Those feelings were confirmed by three members of Gen X who I interviewed for this column.
‘This is the future that I expected’
“I feel like I’m not optimistic about my future, but this is the future that I expected, so I’m not disappointed,” said Tanya Keith, 52, whose Hat Trick Renovation company rehabs homes in Des Moines, Iowa. “If I can’t have the glorious financial success that my parents’ generation had, at least I can do work that matters to me.”
Her husband, Doug Jotzke, 54, works for Keith at Hat Trick, and they have three children, who are the inspiration for the company’s name (in soccer, a hat trick is when a player scores three goals).
Keith and Jotzke had to dip into their retirement savings to buy the house they live in. “I knew there was going to be a tax penalty, but we were up against the wall,” Keith said.
Her experience of preparing for retirement, she said, is that “everything I do to try to prepare is met with chaos in the world and general unpredictability.”
And, she added, “I don’t know that I’m ever going to reach the point where I feel financially secure. That’s a lovely dream.”
The survey says …
In one recent retirement poll, the Corebridge Financial Survey on Longevity, 72% of Gen X members said they fear running out of money more than they fear death, while 67% of boomers said the same. A smaller share of Gen X expects to rely on Social Security to help cover monthly expenses — 69%, compared with 88% of boomers. And 51% of Gen X members were concerned about having to work an additional 10 or more years if they were to live to 100. Among boomers, 37% felt that way.
“That difference between the vulnerability of the Gen Xers and the rather settled perspective of the boomers is striking,” said Ken Stern, founder and chair of the Longevity Project, which released the survey with Corebridge Financial. The Longevity Project is a collaboration with the Stanford Center on Longevity.
Bryan Pinsky, president of individual retirement at Corebridge, noted that his company’s survey found “an almost bookend version” of high confidence about their retirement prospects among some boomers and low confidence among others.
Feeling apprehensive
If boomers are bookends, Gen X, to cite another Simon & Garfunkel song, isn’t exactly feelin’ groovy about retirement.
That’s true even for those who have been making smart money moves.
Laura Savarese, 47, a divorced senior manager at PricewaterhouseCoopers in Roseland, N.J., and a mother of three, is maxing out contributions to her 401(k), owns a home with a low mortgage rate and plans to pay off that loan by the time she retires. But, she said, “I am apprehensive about retirement. I don’t think you can possibly have ever saved enough.”
Northwestern Mutual’s 2024 Planning & Progress Study put some troubling numbers behind those concerns.
The retirement number that seems out of reach
In that survey, members of Gen X said they felt they needed $1.56 million to retire comfortably. On average, they’ve saved about 7% of that, or $108,600.
Boomers, who said their own generation needed $990,000 to retire comfortably, are slightly closer to their goal. They’ve saved about $120,300 on average — roughly 12% of the goal amount.
Savarese’s partner, Jeff Pierson, 51, is a manager at Verizon. “I feel like there’s a number I want to hit before I would feel comfortable enough retiring,” he said.
Read: How much will you need to retire? America’s ‘magic number’ surges.
His chief worries: job stability, the possibility of a catastrophic health event in his family, a stock-market downturn and a “big hiccup in the U.S. economy.”
Pierson hopes to be able to enjoy retirement, spend money and “live a little bit larger” than he’s able to do these days because of the financial sacrifices he’s been making.
But Keith, Savarese and Pierson aren’t feeling especially sanguine about what the future holds for them personally or for their generation.
“I feel like the healthiest stance that Gen X could have right now is: ‘I feel well prepared to deal with whatever chaos the future brings,’” said Keith.
Three reasons Gen X is nervous and pessimistic
There are three big reasons many members of Gen X express more nervousness and pessimism than boomers about retirement:
1. They’re less likely than boomers to have traditional pensions.
Only 15% of private-industry workers now have access to pension plans funded by employers, according to the U.S. Bureau of Labor Statistics. In 1992, 32% did.
“Boomers are probably the last generation where a meaningful percentage of folks have a material pension plan,” Pinsky said. “So on top of their Social Security, they have lifetime income that’s guaranteed for them from other sources.”
By contrast, if a Gen X worker’s employer offers any kind of retirement plan, it’s generally a 401(k), which requires the employee to contribute and whose income in retirement is not guaranteed.
“Our generation has been forced more to think about our retirement and how we’re going to fund it,” Pierson said.
What about buying annuities to provide guaranteed income for life? That’s not happening anytime soon, if ever, Savarese, Pierson and Keith all said.
“It’s in the back of my mind,” Pierson said. “But it’s not something I feel actively necessary to do right now. Maybe if I was a bit older. But my feeling is, it’s expensive.”
Savarese thinks annuities are overly complex. “Things that don’t interest me are things I don’t understand, to be honest,” she said.
2. Social Security’s insolvency problems are expected to come to a head just as Gen X starts to enter retirement age.
The Social Security trust fund trustees anticipate the program will be unable to pay full benefits starting in 2033 unless Congress and the president adjust the program’s financing.
That year is when today’s 58-year-olds will reach Social Security’s full retirement age of 67. If the solvency problems aren’t addressed, the trustees say, the retirement program will only be able to pay 77% of scheduled benefits.
Boomers will be between the ages of 69 and 87 in 2033. Nearly all of them will have started claiming benefits by then.
Keith’s take: “I saw something on the news saying that Social Security will only be sustainable until right when [Gen X] will be accessing retirement, so, you’re still screwed. It’s like, this checks out. This I what we expected.”
When Pierson does his back-of-the-envelope retirement-income projections, he said, “I’ve kind of budgeted that I’m going to wind up getting 65% to 75% of what would be owed to me” by Social Security.
Savarese isn’t counting on getting anything substantive from Social Security.
“I know I’ve paid into it, but I can’t imagine whatever was supposed to be left to me is going to pay my mortgage and put food on the table and let me take trips to see my grandkids,” she said.
Stern believes political leaders are unlikely to reduce benefits for the people who are already claiming Social Security in 2033.
And Pinsky noted: “I think the boomers sit there with a lot of confidence that nobody’s touching their checks. They may not get the Social Security cost-of-living adjustments they think they should, but their checks are safe.”
Stern thinks Gen X members “are not wrong to have a sense of vulnerability and maybe even being pessimistic about the ability of either the political system or the financial-services system to respond in time.”
And the generations coming up behind Gen X — millennials, followed by generations Z and Alpha — “are going to be at risk, too,” Stern said. “But they have longer runways.”
3. Many Gen X members are struggling to pay their children’s college bills when they wish they could be saving more for retirement.
That double burden can mean steep debt loads. According to the credit bureau Experian, the average debt among Gen X members stands at $157,556. That’s about 65% more than boomers’ $94,880.
“A generation that is in the sandwich generation is always going to see things as difficult,” said Stern.
Keith doesn’t see her generation as sandwiched so much as being in a painful vise.
“How do I prepare for retirement while I’m raising my kids and trying to help my 80-year-old parents?” she asked. “It’s just impossible. I’m just kind of rolling with it at this point. I don’t want to get depressed about it, because if I really thought about how terrible things were …” she trails off.
Fidelity’s 2024 State of Retirement Planning Study found that Gen X members started saving for retirement at age 36, on average, but said they wish they’d started at 26.
Catch-up time for Generation X?
Pinsky believes Gen X members can improve their chances of financial security in retirement by working with financial advisers now and taking steps to get a better handle on their finances.
“You’ve got to put the time, energy and effort into it, because a solid retirement foundation doesn’t just happen,” he noted. “With the right plan, advice from a financial professional and the right adjustments as they go forward, I think you’ll see as Gen Xers get closer to their 60s and 70s, their confidence level will increase significantly.”
Since many in Gen X have a decade or more before reaching their mid-60s, Pinsky said, they have “plenty of time to modify saving and spending habits.”
A fuzzy view of their future retirements
None of the Gen X members I spoke with have made concrete plans for how they’ll retire, although the idea of unretirement — working part-time in retirement — intrigues them.
Pierson hopes to retire at 58, but his Magic 8 Ball is cloudy about what that might look like for him.
“I want the freedom to do what I want and travel, and I think there’s going to be some element of wanting to do something on a part-time basis,” he said. “Maybe volunteering as a park ranger or at the library. Or getting paid at the library. I’m not really sure.”
Savarese chimed in: “Do I want to work until the day I die? No.” But she said she can’t imagine not working at all, either.
“I think I would need some purpose, whether it’s serving on a board or volunteering or part-time work,” Savarese said. “I love to bake when I’m not working. So we joke around with the kids that we’re going to open up a bakery when I retire — a summer-only kind of bakery down the shore, open May through August. And then the rest of the year, I’ll be retired.”
Keith said she works 80 hours a week and hopes at some point to cut that oppressive schedule in half and to be able to take vacations. But she doesn’t anticipate ever being able to retire.
“I guess my goal for 65 isn’t necessarily to be not working anymore, but to at least be at a point where I don’t burst out laughing when somebody asks me about my financial situation,” she said. “Achievable goals.”
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