Generation Next

Generation Next

| March 27, 2024

The Next Generation of Retirees Faces Unique Challenges. How Can You Help?

The youngest of the Baby Boomers are set to reach full retirement age in 2031. Patiently waiting in the wings is Generation X. Representing ages currently ranging from 44 to 59, they were early adopters of 401(k) plans and the first generation who could potentially have access to them for most of their careers.

They may also be the generation that has faced the most challenges and uncertainties in their retirement planning (including the global financial crisis, COVID-19 pandemic and the decline of traditional pension plans). In addition, many of them did not have access early in their careers to plan features that have become more widespread in recent years – such as auto features, default QDIAs, target date funds and managed account services.

Schroder’s 2023 US Retirement Surveyoffers some noteworthy data points that reflect where many of your Generation X employees may be right now. The numbers also inspire an opportunity for plan sponsors to help them manage these challenges through targeted education.

Procrastination in Planning

According to the Schroders report, 45% of Gen Xers said they have not done any retirement planning, compared to 43% of Millennials and 30% of Baby Boomers.

Significant Savings Gap

Gen Xers estimate that, on average, it will take $1,112,183 in savings to retire comfortably, yet they expect to have just $661,013 saved. The resulting savings gap of $451,170 topped the expected shortfall facing Millennials and Baby Boomers.

Bigger Portfolio Positions in Cash

Survey responses indicate that Gen Xers are allocating an average of 32% of their retirement assets to cash, despite their time horizon and sizeable retirement savings gap. When asked why they are investing their retirement assets in cash, 63% of Gen Xers said they fear losing their money, and 24% reported they are not sure how to best invest their savings.

Social Insecurity

Only 11% of Gen Xers plan to wait until age 70 to receive their maximum benefit. This is likely because nearly half (47%) fear Social Security may run out of money.

Targeted Education Considerations for Plan Sponsors

Here are some educational themes to consider targeting toward your Gen X employees, to help them gain confidence and control over their retirement planning:

  • It’s never too late to start. Even the oldest members of this group have enough time to develop a retirement plan, increase their savings and invest appropriately. The power of tax-deferred compounding over time can still be meaningful for them and even more so for those in the younger end of the age range.

  • Catch-up savings opportunities for those age 50+.

  • The benefit of waiting to take Social Security (and possibly working a few years longer).

  • The current state of Social Security trust fund solvency (there will likely be some changes, but the money won’t “run out”).

  • The role of diversification in a retirement plan investing strategy. In particular, the importance of maintaining an appropriate allocation in equities to help stay ahead of inflation.

  • The benefit of working with a financial advisor, who can help them balance retirement planning with other financial challenges they may be working through right now — such as college savings or caring for an aging parent.

Online Resources

  • Internal Revenue Service (IRS), Employee Plans

    • www.irs.gov/ep

  • U.S. Department of Labor, Employee Benefits Security Administration

    • www.dol.gov/ebsa

  • 401(k) Help Center

    • www.401khelpcenter.com

  • PLANSPONSOR Magazine

    • www.plansponsor.com

  • BenefitsLink

    • www.benefitslink.com

  • Plan Sponsor Council of America

    • www.psca.org

  • Employee Benefit Research Institute

    • www.ebri.org

Informational Resources: “Reinventing Retirement For Generation X” (nextavenue.org; July 24, 2023); 2023 US Retirement Survey (Gen X and Retirement Report) (Shroders).


We are happy to help provide additional insight, feel free to reach out to me at joe@printers401k.com or 800.307.0376.

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Disclosure: This material was created for educational and informational purposes only and is not intended as ERISA, tax, legal or investment advice. Investment Advice and 3(38) Investment Fiduciary services offered through Diversified Financial Advisors, LLC, a Registered Investment Advisor. 3(16) Administrative Fiduciary Services provided by PISTL Service Corporation. Discretionary Trustee services provided by Printing Industries 401k Trustees. If you are seeking investment advice specific to your needs, such advice services must be obtained on your own separate from this educational material. 

GRP-337-0224 (Exp. 02/25)