Supporting Gen X on the Path to Retirement

Born between 1965 and 1980, Generation X is navigating unique financial pressures, with nearly half having no retirement savings. Despite this, only 1 in 10 plans to delay claiming Social Security until age 70 to maximize benefits, partly due to concerns about the program’s future. Employers and plan sponsors can play a vital role in providing resources that help Gen Xers take meaningful steps toward retirement readiness.

Balancing Competing Financial Priorities

Often referred to as the “sandwich generation,” many Gen Xers are financially supporting both aging parents and dependent children. According to Pew Research, 54% of those in their 40s manage these dual responsibilities, making it difficult to prioritize retirement savings. Mortgage debt, student loans, and credit card balances further strain their finances. Providing financial wellness programs that focus on debt reduction, budgeting, and emergency savings can help employees free up income for retirement contributions.

The Savings Gap

Economic downturns, such as the Great Recession, interrupted the prime earning years for many Gen Xers, leading to inadequate retirement savings. A 2024 Vanguard report shows that the average 401(k) balance for those aged 45-54 is $168,646, while the median is just $60,763. With traditional pensions largely phased out, Gen Xers must rely on 401(k) plans and personal savings. Employers can encourage catch-up contributions for those 50+ and connect employees with financial advisors to help optimize their remaining earning years.

Managing Risk and Uncertainty

Market volatility, rising healthcare costs, and Social Security concerns have made Gen Xers more cautious about investing, sometimes avoiding the risk necessary for long-term growth. Some also dip into retirement savings early to cover unexpected expenses, further weakening their financial future. Employers can help by offering investment options that balance risk and growth, such as target-date funds, and by promoting Health Savings Accounts (HSAs) for future medical costs.

Guiding Gen X Toward Retirement Readiness

Helping Gen Xers build financial security requires a proactive approach. By addressing their challenges with tailored resources, education, and long-term planning strategies, plan sponsors can empower this generation to take control of their financial future and retire with confidence.