How Gen X’s Financial Fears Eclipse Their Fear of Death

Many people worry about running out of money in retirement, but members of Generation X (generally defined as anyone born between 1965 and 1980) fret the most.

In fact, a recent survey by the Allianz Center for the Future of Retirement found that 70% of Gen Xers said they feared running out of money even more than they feared death. That compares with 66% of Millennials (born between 1981 and 1996) and 61% of Baby Boomers (born between 1946 and 1964).

Gen X listed their two biggest concerns as inflation (55%) and whether their Social Security benefits would be adequate in retirement (54%).

Are the Fears Well-Founded?

A lot of Gen Xers may have good reason to believe these worries are justified. A 2024 study from Northwestern Mutual found that Gen Xers estimate they’ll need $1.56 million to retire comfortably. But they’ve only saved an average of $108,600, leaving a $1.45 million gap to bridge.

“Many Gen X clients do express a heightened sense of financial anxiety, particularly around retirement planning,” says Michael J. Garry, a certified financial planner with Yardley Wealth Management in Yardley, Pa., and a Gen Xer himself. “In my experience, they tend to be especially concerned about whether they’ll have ‘enough’—enough saved, enough income, and enough time to catch up if they feel behind.”

How a Shift Caused the Retirement Savings Gap

If Gen X has been slow to save, it isn’t necessarily because they are a generation of slackers, which they are often accused of being.

A 2023 report from the National Institute on Retirement Security highlighted that while many Gen Xers entered the workforce during the booming 1990s, they also faced key obstacles:

• The rise of globalization, which disrupted job stability
• The transition from defined benefit (DB) pension plans to defined contribution (DC) plans, like 401(k)s

The DB-to-DC shift meant that few Gen Xers could count on traditional pensions funded entirely by their employers. They instead have to rely on their own contributions to 401(k)s and similar plans to cover their retirement needs, along with the occasional employer match.

“Many feel like they’ve been left to navigate retirement largely on their own,” Garry notes. “Unlike Boomers, they’re less likely to have pensions, and unlike Millennials, they didn’t benefit as much from
automatic 401(k) enrollment, or the financial literacy that seems more common now. Add in two major recessions and market downturns during key earning years, and it makes more sense.”

What Gen X Can Do Now

Despite the challenges, there’s still time for Gen Xers to make meaningful progress toward retirement security. Here’s what to do now:

• Max out retirement contributions: Take full advantage of 401(k), IRA, or Roth IRA limits, especially with catch-up contributions available after age 50.
• Prioritize high-interest debt repayment: Reducing debt can free up cash flow for investing and emergency savings.
• Work with a financial advisor: Personalized advice can help clarify goals, reduce anxiety, and build a sustainable plan.
• Delay retirement, if necessary: Working a few extra years can significantly boost retirement income, especially if it means delaying Social Security and increasing monthly benefits.

Small changes can have a compounding impact. The key is to start as soon as possible and stay consistent.

The Bottom Line

It’s no wonder that a 2024 BlackRock study found only 60% of Gen Xers felt they were on track for retirement, the lowest of any generation surveyed.

The good news is, there’s still time to bridge the gap by taking some actionable steps.