Americans born between 1965 and 1980 form Generation X, a cohort of roughly sixty four million people. The Social Security Administration defines full retirement age as sixty seven for those born after 1960. For the oldest members of Generation X, that milestone arrives in 2032. Survey after survey shows that most of them will reach it with savings far below the amount required to sustain their current standard of living.
The 2024 Schroders U.S. Retirement Survey collected responses from 1,000 employed Americans between ages forty-four and fifty-nine. Participants estimated that they would hold $602,944 in retirement accounts when they stop working; they also stated that $1,069,746 is the minimum required for a comfortable retirement. The gap equals $466,802.
Forty-eight percent of the same respondents admitted that they possess no written retirement plan, no target date, no asset allocation along with no scheduled contribution rate.
A December 2024 poll conducted by the Employee Benefit Research Institute found that only fourteen percent of Generation X workers believe their current balances will cover projected expenses.
Section 414(v) of the Internal Revenue Code authorizes catch up contributions for participants who reach age fifty. The provision raises the annual deferral limit for 401(k) plans and the contribution limit for individual retirement arrangements.
The Congressional Budget Office projects that the Old-Age but also Survivors Insurance Trust Fund will exhaust its reserves during fiscal year 2033. Payroll tax revenue will still arrive, yet benefits would drop to seventy seven percent of scheduled amounts unless Congress acts.
Federal, state in addition to local taxes reduce investment returns. Tax-advantaged vehicles such as 401(k) plans, 403(b) plans, 457 plans, traditional IRAs, Roth IRAs next to health savings accounts shelter interest, dividends, capital gains from immediate taxation.
Generation X members report high levels of retirement anxiety. They also display disciplined financial habits.
âThe future for Gen X retirees looks challenging,â states Jude Boudreaux, Certified Financial Planner and founder of Upperline Financial Partners in New Orleans. âWe face the uncertain future of Social Security – rising healthcare costs, increased longevity along with more individual responsibility for retirement savings.â
Fidelity Investments released its 2025 State of Retirement Planning in January. Fifty-three percent of Generation X respondents expressed confidence that they will retire on their own terms.
The Schroders survey revealed that fourteen percent believe their savings are sufficient. Fifty-four percent fear that Social Security will not pay the benefits currently listed on their statements.
Forty-three percent of Generation X respondents told Schroders that they plan to claim Social Security at age sixty two, the earliest eligibility age. Ten percent intend to delay until age seventy to receive the maximum monthly benefit.
An October 2024 report from the FINRA Investor Education Foundation analyzed survey data collected between 2018 and 2022. Generation X respondents displayed healthier financial behavior than popular narratives suggest.
Fifty-five percent of Generation X households own at least one employer sponsored retirement account. Eighty-two percent of those households contribute each pay period. Ten percent have taken a loan from a plan balance.
Debt balances appear on most Generation X credit reports. The majority of the obligations finance appreciating or essential assets – first lien mortgages, second lien mortgages, and automobile loans. Twenty-four percent carry student loans for themselves, spouses, or children. The median balance exceeds $28,000.
Better Resources for Saving
âGeneration X still has time,â observes Catherine Valega, Certified Financial Planner at Green Bee Advisory in Winchester, Massachusetts. âThey have access to higher contribution limits, virtual education in addition to fintech tools – they can take control of their financial journey through their employer 401(k).â
âIt is not too late to prepare,â adds Jude Boudreaux. âThe clock is ticking. A Certified Financial Planner can help Gen Xers optimize catch up contributions, coordinate Social Security claiming strategies, and model healthcare expenses after age sixty five.â
Annual and Catch-Up Contributions
The Internal Revenue Service sets annual contribution limits for retirement accounts. For 2025, the limit for traditional besides Roth IRAs is $7,000. Workers who reach age fifty before December 31, 2025, may contribute an additional $1,000, for a total of $8,000.
The 2025 elective deferral limit for 401(k), 403(b) next to 457 plans is $23,500. Participants who turn fifty during the calendar year may defer an additional $7,500, for a total of $31,000.
Maximizing contributions reduces current taxable income for traditional 401(k) and IRA deposits. Earnings grow tax deferred. Roth contributions use after tax dollars, yet qualified withdrawals after age fifty-nine and a half are tax free.
After exhausting retirement account limits, investors may fund taxable brokerage accounts – these accounts impose no contribution ceiling, no required minimum distributions, and no early withdrawal penalties. They accept individual stocks, exchange traded funds, municipal bonds, real estate investment trusts, and certificates of deposit.
Banks offer certificates of deposit, money market accounts, and high-yield savings accounts. Credit unions provide share certificates and money market share accounts. These vehicles protect principal up to Federal Deposit Insurance Corporation or National Credit Union Administration limits.
âSign up for every feature the employer plan offers,â recommends Catherine Valega. âElect automatic escalation. Capture the full employer match. Direct every bonus and tax refund into the plan.â
Avoid Taxes Where Possible
Taxes erode investment returns. Tax-advantaged retirement accounts shield contributions and earnings from immediate taxation.
Traditional 401(k) contributions reduce adjusted gross income. Earnings grow tax deferred. Distributions during retirement face ordinary income tax rates.
Roth 401(k) contributions use after tax dollars. Earnings grow tax free. Qualified withdrawals after age fifty-nine and a half incur no federal income tax.
Health savings accounts offer triple tax advantages. Contributions reduce adjusted gross income. Earnings grow tax free. Withdrawals for qualified medical expenses are tax free. After age sixty five, non medical withdrawals face ordinary income tax but no penalty.
Municipal bonds pay interest exempt from federal income tax. Bonds issued within the investor’s state of residence often avoid state and local taxes as well.
Diversify Beyond Retirement Accounts
Generation X holds twenty four percent of all home purchase mortgages originated between July 2023 and June 2024 – according to the National Association of Realtors. Many own additional properties for rental income or price appreciation.
A balanced portfolio of domestic large cap stocks, domestic small cap stocks, international developed market stocks, emerging market stocks, investment grade bonds, and Treasury inflation protected securities historically delivers higher annualized returns than cash or certificates of deposit.
Interest in Crypto
Twenty-four percent of Generation X respondents told the FINRA Investor Education Foundation that they own cryptocurrency. Ethereum, Solana rank as the most common holdings.
Morgan Stanley Wealth Management published a research note in October 2024. Bitcoin produced an average annual return of forty nine percent between 2014 and 2024. The note cautioned that such performance is unlikely to repeat over the next decade. The firm projected annualized returns between two percent and four percent for the ten year period ending 2034.
Cryptocurrency exchanges such as Coinbase, Kraken along with Binance.US offer custody, trading in addition to staking services. Exchange-traded funds that hold Bitcoin or Ethereum trade on traditional stock exchanges and eliminate the need for digital wallets.
Empty-nest households often redirect former child rearing expenses toward investments. Annual tuition, sports fees next to grocery bills decline once children graduate college and leave home.
Workers who reach age fifty gain access to catch up contributions; they may also fund brokerage accounts. Many Generation X households possess more investable cash than they realize.
Overwhelmed savers should schedule a consultation with a Certified Financial Planner or a Chartered Financial Consultant. A written plan clarifies goals, risk tolerance, required savings rates.