While the financial media has largely remained fixated on Millennials and Gen Zers, both are projected to benefit from the ongoing Great Wealth Transfer. Meanwhile, there’s a generation quietly slipping through the cracks: Generation X.
Unlike the younger generations that follow them, many Gen Xers — now 45 to 60 years old — may not be positioned to receive a significant inheritance or windfall.
This generation grew up during some pretty tough economic times, bookended by the dot-com crash and the global financial crisis. Many entered adulthood saddled with student debt, only to face stagnant wages and multiple economic crises during their prime earning years.
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Yet, despite these setbacks, this resilient generation still has a meaningful window to get back on track for retirement.
Let’s explore some of the key challenges facing this overlooked generation and some good opportunities to help them catch up.
The savings gap
Many Gen Xers faced challenges early on. Burdened with student loans and lower-than-expected earnings, they often had to choose between paying off debt and saving for retirement. It is no surprise that savings took a backseat.
Then came the global financial crisis, and many who had managed to set aside some money were forced to dip into their savings, including 401(k) accounts, just to stay afloat.
The result? A generation now late into their work lives, nearing what should be their golden years, but often with very low retirement balances.
Despite having been in the workforce for more than 25 years, the median retirement savings for Gen Xers sits at $40,000, based on a National Institute on Retirement Security study released in July 2023.
The good news is that consistent, automated contributions — even started later in life — can still make a meaningful difference.
By employing a “set it and forget it” contribution strategy that automatically increases deposits to retirement accounts over time, Gen Xers can begin to gradually close their savings gap.
Catch-up contributions — a lifeline
One of the best available tools for Gen Xers who are trying to make up for lost savings…
Read More: A Financial Expert’s Guide to How Gen X Can Finally Get Ahead
