Gen X-ers are struggling to keep up with retirement saving: Rpt

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Generation X, which includes those born between 1965 and 1980, might be feeling a bit anxious about retirement: according to a new Goldman Sachs survey, almost 50% of Gen X-ers say they are feeling behind in saving for retirement. A separate Northwestern Mutual study details that, on average, Gen X-ers claim they would need $1.56 million to retire comfortably.

Yahoo Finance Reporter Kerry Hannon joins Wealth! to break down the report and what it means for Gen X-ers’ retirement journey.

For more expert insight and the latest market action, click here to watch this full episode of Wealth!

This post was written by Nicholas Jacobino

Video Transcript

Let’s also talk a little generation X here, Gen X has been the alpha tester for the 401k retirement system.

And according to a new Goldman Sachs survey, the gloomy results are rolling in Yahoo.

Finance senior columnist, Carry Hannon has more on this story, Carrie, we wish it was better results.

But what is the reality here?

Yeah, Brad, the reality is that, you know, Gen X and we’re talking about these are people this year who are aged 43 to 59.

So the first ones are gonna start turning 60 next year.

Half of them say they are behind in the retirement planning and the retirement savings and half of them haven’t even started to calculate what they might actually need for the ones who have we see numbers like, oh, I think I need one point $6 million saved to retire, but right now they only have about 100,000.

So these are kind of startling numbers.

And as you mentioned, this is truly the first generation who have had to rely primarily on 401k plans as their retirement vehicle.

I mean, private pensions, the traditional pension only about 11% of private employers offer those.

Now, it’s about a third of the ones that offered it back in the 19 nineties.

So this is a time where, you know, they really had to struggle to do it themselves.

And we’re seeing that things like credit card debt and student loans have really held them back in their ability to sock away money for these retirement years.

And in fact, one in three, in one study I saw say they have dipped into the, their, their accounts.

Uh even though they’re behind, they’ve dipped into them in order to pay bills, monthly bills.

So it is a bit concerning and the younger generations coming behind them have a couple of things in their favor.

So it might just be this, this generation really uh got stuck.

We call it the forgotten generation, but younger ones now have auto enrollment in their 401k plans and auto escalation.

These are things that weren’t around when the Gen Xers were getting started in the workplace.

And so what can employers do to help Gen X and, and what have they done so far?

That’s making the future potentially brighter for, for other generations as well?

Yeah, I love that.

It’s good to, it’s good to look at the, the upside of this.

And in fact, employers have started to do some of these things and we need more of it particularly for Gen Xers, which is offer them some financial advice or access to financial planning.

To help them get a grip on this.

Um, you know, really find ways that they can, uh, there’s now options to set up emergency savings plans right there through your retirement plan.

If they can help them start to set aside that kind of emergency savings, then they don’t dip into their plans.

And a lot of people are asking for guaranteed income retirement solutions so that when they do retire, they have an access to something similar to uh a what a traditional pension plan used to be.

These are all fairly new, but the things that are seem to be helping is this auto escalation that I mentioned before and the auto enrollment.

So employers are starting to get a grip on getting people started because as we know, Brad, you know, this, well, the earlier you can start saving in these plants, even if it’s a small amount compounding over all those years.

Makes a huge difference.

Carrie, thanks so much for jumping on with us.

Yahoo Finance’s own carry, Hannon.