Generation X Has All Eyes on Preparing for Retirement

Research shows Gen X is invested in—but worried about—their later years.

Fact checked by Vikki Velasquez

Generation X is represented by Americans born between 1965 and 1980, and they number approximately 64 million. Full retirement age is looming for many of them, but numerous reports indicate that they’re nowhere near ready financially.

The Schroders 2024 U.S. Retirement Survey found that Gen Xers anticipate having $602,944 in retirement savings when the time comes. Yet they believe they’ll need $1,069,746 to fund a comfortable retirement. That’s a difference of $466,802.

Another finding is even more alarming: 48% of them said that they don’t have any sort of retirement plan or strategy at all.

Key Takeaways

• Only about 14% of Gen Xers felt that they had saved enough for retirement, according to a December 2024 survey.
• The Internal Revenue Code includes retirement plan catch-up provisions for those who’ve gotten a late start on saving.
• The Congressional Budget Office anticipates that the Social Security Trust Fund will run dry by fiscal year 2033.
• Taxes can reduce returns so tax-advantaged investing is crucial.
• Gen Xers stress about their coming retirement years but have healthy financial behaviors.

Why Is Generation X Worried About Retirement?

“The future for Gen X retirees looks very different than it did for our parents,” notes Melissa Murphy Pavone, Certified Financial Planner and founder of Mindful Financial Partners.

“We’re facing the uncertain future of Social Security, rising healthcare costs, increased longevity, and more individual responsibility for retirement savings.”

Only 53% of Gen Xers felt that they would be able to retire on their own terms, according to Fidelity Investments’ 2025 State of Retirement Planning.

The Schroders survey also revealed that only 14% felt that they’d saved enough, and 54% worried that they would deplete their assets before their deaths.

Social Security

Old-Age and Survivors Insurance (OASI), commonly known as Social Security, provides benefits to retired U.S. workers.

However, the Congressional Budget Office anticipates that the OASI Trust Fund will run dry by fiscal year 2033.

Gen Xers’ plans reflect their worries. Schroders found that 43% intend to begin collecting Social Security as soon as possible, compared to 10% who plan to wait until age 70 for their maximum monthly payouts.

How Generation X Can Prepare for Retirement

Solid Financial Behavior

According to an October 2024 report by FINRA’s Investor Education Foundation, while Generation X perceives its financial situation as worrisome, it actually reports fairly healthy financial behavior.

About 55% have a retirement account at work. Overall, they’re contributing yearly to these accounts (and individual retirement accounts), and just 10% report taking loans from them.

They have debt, but it’s primarily related to asset accumulation, such as home and auto loans. And they’re managing it well. However, about a quarter of Gen Xers have student loans, which is a source of strain for them.

Better Resources for Saving

It’s not all doom and gloom for Gen Xers, or at least it may not have to be, according to Chad Parks, CEO & founder of Ubiquity, a leading small business retirement solutions provider.

“The bright side here is that Gen Xers no longer need to be seen as the ‘vulnerable generation’ because they do have access to more retirement planning and savings resources than any generation before them,” Parks says.

“From more diverse investment options (stocks, bonds, ETFs) to higher contribution limits and virtual education and fintech tools, Gen Xers have multiple pathways to take control of their financial journeys through their employer-sponsored 401(k).”

Pavone agrees. “It’s not too late to prepare,” she says, “but the clock is ticking. A CFP® can help Gen Xers take proactive steps like maximizing retirement account contributions, including catch-up provisions at 50-plus.”

Important

Shroders found that 35% of Gen X workers were holding their retirement savings in cash in 2024 and 64% reported that they were doing so because they were afraid of stock market losses.

Annual and Catch-Up Contributions

One sure way to prepare for retirement is to contribute as much as allowed to your retirement accounts.

For 2025, Gen Xers who have reached age 50 can contribute an additional $1,000 beyond the annual limit ($7,000) for their individual retirement accounts (IRAs). That’s a total of $8,000 for the year.

Similarly, 401(k) participants can contribute an additional $7,500 catch-up amount beyond the annual limit of $23,500, which means a total contribution of $31,000.

Taking advantage of their retirement accounts’ maximum contribution amounts, as well as the tax benefits and compounding, can help Gen Xers better position themselves for retirement as the clock ticks down.

Ways to Catch Up

Gen Xers may be at the top of their careers by now, with higher salaries and fewer expenses as childcare costs are no longer an issue. So they should focus on putting more money away.

After maxing out their retirement accounts, they can consider taxable brokerage accounts (which have no limits on deposits and no required minimum distributions).

There are also investments available through their banks, such as certificates of deposit (CDs) and high-yield savings accounts.

Just be sure to use these other options after stashing as much as possible in work and individual retirement accounts.

“They need to sign up for and utilize everything their employer’s plan offers: catch-up contributions, tax deductions, all of it,” Parks says.

Avoid Taxes Where Possible

Taxes eat away at investment returns. That’s why tax-advantaged retirement accounts are so vital for Gen Xers.

Traditional IRAs and 401(k)s offer a tax deduction for the money you contribute. That reduces your taxable income. Then, your account’s contributions and earnings grow undiminished by taxes for years until you take withdrawals in retirement. At that point, they’re taxed as ordinary income.

A Roth IRA or Roth 401(k) is slightly different. The money you contribute to a Roth is money you’ve already paid taxes on. So there’s no tax break there. However, your contributions and earnings grow tax-free, and you’ll owe no taxes on your withdrawals in retirement.

Tax-free, compounding growth is an exceptional way to grow the value of your savings. So Gen Xers should max out their retirement account contributions whenever possible.

Alternative Investments

Pavone stresses the idea of diversifying beyond traditional retirement investments. The National Association of Realtors indicates that Generation X is doing just that.

They account for about 24% of all homebuyers and many own additional properties for investment and income-generating purposes.

In addition, a diversified portfolio of stocks and bonds can provide a higher annual return over the long term even if returns don’t consistently boom early on.

Interest in Crypto

Another way Gen Xers are working to increase their savings and investments is by investing in cryptocurrencies. In fact, as of December 2024, 24% of them were so invested.

According to a Morgan Stanley October 2024 article, Bitcoin had an eye-catching 49% average annual return from 2014 through 2024. But the firm warned that this probably would not be sustained over the next 10 years.

In fact, it estimated future 10-year annualized returns for bitcoin at 1% to 10%. This can be a comfortable range if you reinvest rather than spend your profits.

The Bottom Line

Generation X is heading toward retirement. These 45- to 60-year-olds face a looming Social Security crisis, and almost half of them have no retirement strategy in place.

But Gen Xers have solid options. Investing is easier than ever with internet access. They may have more cash available to invest as their children fly the nest.

Once they reach age 50, they can make sizable catch-up contributions to their retirement accounts. And they can invest additional money through brokerage accounts. So they may be in better shape than they perceive.

However, if you feel overwhelmed by a lack of savings and your retirement timeline, seek advice from a financial professional to stay focused and on track.