Generation X, born between 1965 and 1980, is nearing retirement, but according to recent data from Fidelity, the financial outlook for the average Gen Xer is worrisome. Fidelity reports that the average retirement savings for Gen X in Q2 2024 is only $182,100.
While that may seem like a lot of money to some, it pales in comparison to what it takes to retire safely. By the time someone reaches retirement age, Fidelity suggests having at least 10 times your salary in retirement savings. So earning $70,000 a year would mean having $700,000 in retirement accounts by the time you stop working.
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Those in their late 40s to mid-50s have a lot going for them. According to Fidelity’s recommendation, this age group should already have six times their annual salary saved for retirement. Sticking with our example salary of $70,000 would mean having $420,000 in retirement accounts, a far cry from the $182,100 average.
Generation X has experienced several financial setbacks over the years. From the dot-com bubble to the 2008 financial crisis and the COVID-19 pandemic, many disruptions have affected the ability to save money.
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Many Gen Xers also faced layoffs or reduced income during critical times. With the major swings in the stock market over the years, keeping up with retirement contributions has been difficult.
Beyond external economic factors, Gen-Xers – the sandwich generation – are often stuck in the middle, caring for their children and aging parents. Those with this dual caregiving role face emotional and financial strain, from rising health care costs for aging parents to child-rearing expenses.
This often results in delaying or reducing contributions to pension funds to cover immediate family needs.
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Another financial hurdle for Gen Xers is personal debt. Education Data reports that the average student loan debt for Gen Xers is $44,290 per borrower, and Gen Xers took out more student loans than any other generation. According to Experian, Gen X also has the highest average credit card debt of any generation at $9,255. Between paying off these personal debts and managing other financial responsibilities, retirement savings often take a back seat.
However, it’s not too late for those with less-than-ideal retirement savings to get back on track. Increasing contributions to retirement accounts is a good place to start, especially if your employer offers a matching contribution. It’s also important to prioritize paying off high-interest debt, which can free up more money for saving. Meeting with a financial planner could be another smart move, as they can help create a customized plan that balances your current needs with your long-term goals.
By taking action now, Gen Xers can increase their chances of securing a comfortable retirement. Talking to a financial advisor can help. They can help you plan for your future with a personalized plan tailored to your needs.
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This article The average Gen-Xer has just $182,100 in retirement savings, and that’s not enough to secure their future originally appeared on Benzinga.com
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