{"id":9873,"date":"2023-08-13T06:10:39","date_gmt":"2023-08-13T10:10:39","guid":{"rendered":"https:\/\/kerryhannon.com\/?p=9873"},"modified":"2023-08-13T06:16:19","modified_gmt":"2023-08-13T10:16:19","slug":"generation-x-faces-grim-retirement-horizon","status":"publish","type":"post","link":"https:\/\/kerryhannon.com\/?p=9873","title":{"rendered":"Generation X faces grim retirement horizon"},"content":{"rendered":"
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It’s a somber retirement forecast for Generation X workers \u2013 those who are now between the ages of 41 and 56.<\/span><\/div>\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n
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Many in the so-called latchkey-kid generation, who may have muddled through a childhood with less parent hand-holding than millennials and baby boomers, are now in need of some serious nurturing, according to a new\u00a0report\u00a0<\/a>published by the National Institute on Retirement Security (NIRS).<\/p>\n

The NIRS scrutinized the retirement readiness of Gen X, and it\u2019s not pretty.<\/p>\n

Read on Yahoo Finance<\/a><\/strong><\/p>\n

The typical Gen X household has only $40,000 in retirement savings \u2014 and those savings are concentrated among top earners \u2014 according to the findings published by the nonpartisan organization. Also, Blacks and Hispanics have considerably lower savings and access to employer-provided retirement plans as compared to whites.<\/p>\n

Welcome to the \u2018new retirement\u2019<\/strong><\/h2>\n

\u201cGeneration X represents the leading edge of the new retirement in America,\u201d Tyler Bond, a co-author of the report and NIRS research director, told Yahoo Finance. \u201cAs the first generation to mostly enter the workforce after the move away from defined benefit pensions in the private sector, most Gen Xers will not enjoy the secure retirement income that pensions have provided to so many in previous generations.”<\/p>\n

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National Institute on Retirement Security<\/figcaption><\/figure>\n

The report, which defines Gen X as those born between 1965 and 1980, about 64 million Americans, or nearly 20% of the US population, is based on research data from the Survey of Income and Program Participation (SIPP<\/a>), which provides information on income, employment, household composition, and government program participation.<\/p>\n

The tenuous outlook for Gen X has been trumpeted in a\u00a0range of recent reports<\/a>\u00a0this year, including the finding from the 23rd Annual Transamerica Retirement\u00a0survey<\/a>\u00a0that about one in three Gen Xers do not have any financial strategy for retirement.<\/p>\n

\u201cThe retirement landscape shifted dramatically for this generation, and they\u2019re at risk of falling through the cracks,\u201d Catherine Collinson, CEO of Transamerica Institute and Transamerica Center for Retirement, said.<\/p>\n

Zero retirement savings<\/strong><\/h2>\n

The troubling crux of the NIRS research: The median account balance for an individual in Gen X is only $10,000, which means half of Gen Xers have less than that amount saved for retirement. One in four Gen Xers don\u2019t have a retirement savings account at all. For Black Gen Xers, the median retirement account balance is $1 and half have nothing at all. Two-thirds of Hispanic Gen Xers haven\u2019t even started a retirement savings account.<\/p>\n

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National Institute on Retirement Security<\/figcaption><\/figure>\n

There\u2019s a notable gender gap, too. The median retirement savings is $13,000 for single Gen X men and $6,000 for Gen X women. (That might be because Gen X women are more likely to work part-time.) Married men and women tend to have higher savings levels.<\/p>\n

Read more: The best high-yield savings account rates for July 2023<\/em><\/a><\/p>\n

Why is Gen X so behind?<\/strong><\/h2>\n

One factor: 401(k)s were just coming online when Gen X entered the workforce \u2014 and relatively few workers had access to them. Only 14% of Gen Xers have a traditional employer pension plan, and only about half (55%) have access to an employer-provided retirement plan at their job like a 401(k).<\/p>\n

That\u2019s the overarching problem.<\/p>\n

When workers don\u2019t have access to an employer-sponsored plan, they typically don\u2019t start their own retirement accounts. Only 5% of workers take the steps to open up a retirement savings account if it is not provided by their employer, according to Angela M. Antonelli, executive director of the Center for Retirement Initiatives at Georgetown University. If a worker has access to an employer-sponsored plan, participation jumps to 72<\/p>\n

Having access to saving in a retirement plan at work is typically reserved for full-time employees. But 12% of working Gen Xers work part-time, the NIRS report found. Among Gen X men, 7% worked part-time. For Gen X women, it was more than double that number, nearly two in 10 (18%).<\/span><\/p>\n

The fact is it\u2019s easier to save when you have an employer-provided retirement account. Workers with an IRA or Keogh account had an average balance of $148,920 and the median balance was $44,100. For those with 401(k), 403(b) and other employer-sponsored plans, the average balance was $173,553 and the median balance came in at $50,000. “These are better than the overall numbers, but are hardly encouraging for a generation fast approaching retirement age,” Bond said.<\/p>\n