Gen X may be facing a retirement crisis even more severe than that of the Baby Boomers, according to financial advisors. A significant number of individuals in their mid-50s have less than $50,000 saved for retirement, and many anticipate needing to work part-time or rely on their families for support in their later years, as revealed in a Prudential survey.
Take Jim Thomas, for example. At 52, he works in a lumber mill and recognizes that he’s far behind in terms of retirement savings. Despite earning a decent income, he’s struggled financially over the past decade due to a layoff, a divorce, and various legal issues that drained his resources. He is only now starting his 401(k) from scratch and estimates he has about $100,000 saved—well below what financial experts recommend, which is approximately eight times one’s annual salary by age 60.
“I know I won’t be able to retire at 65 unless I win the lottery,” Thomas remarked. He anticipates needing help from his daughter when he’s no longer able to work or relying on government assistance beyond Social Security.
Thomas is not alone; he is part of a group that retirement experts call “silver squatters,” referring to those in their 50s who are even less prepared for retirement than some Baby Boomers. This term also suggests that many may have to depend on family for housing in their later years. Surveys from Prudential show the median retirement savings for individuals in their mid-50s is just under $48,000. Alarmingly, 35% of 55-year-olds have less than $10,000 saved, while 18% have nothing at all.
The fear of outliving their savings is prevalent, with two-thirds of 55-year-olds expressing this concern—the highest among any age group in Prudential’s 2024 survey. Comparatively, 59% of 65-year-olds share the same worry. “Overall, they are not as prepared as Boomers and are even doing worse than Millennials,” stated Pete Welsh, managing director of retirement and wealth at Inspira Financial, though he noted that younger Gen Xers still have a chance to catch up.
Reasons for this lack of readiness include late planning, unique economic challenges faced by those in their mid-50s, and a lower level of financial literacy within the generation. For instance, René, a 50-year-old from Austin, Texas, faces anxiety about her future financial security. Due to a medical diagnosis that halted her employment and resulted in multiple surgeries, her and her husband’s life savings of approximately $380,000 have nearly evaporated. Falling behind on bills, they are uncertain about receiving additional support during retirement, aside from their anticipated pension payments, as they do not wish to rely on their daughter.
A common sentiment among Gen Xers is the expectation of postponing retirement or working past their expected retirement age. Nearly half of them believe they will have to retire later than planned, while 40% anticipate taking part-time jobs in retirement. Many do not expect to inherit wealth from their baby boomer parents. Only 12% of those aged 55 expect financial support from their families.
The financial hardships faced by Gen Xers may stem from challenges such as the impact of the 2008 financial crisis while they were in their prime working years, as well as unexpected expenses related to their children’s education or elder care responsibilities. Low financial literacy rates exacerbate the problem, with around half of Gen Xers saving without a clear retirement strategy. Many also overlook major expenses, with 48% not considering healthcare costs and 75% failing to account for assisted living expenses.
Without a financial cushion, this generation needs to be particularly vigilant about their spending, especially those at or nearing retirement age.