Data and Research

Most Gen Xers Dismal on Retirement Hopes

According to an IRI study, about three-quarters of Generation X doubt they will have enough money to support themselves throughout retirement.

By Jill Cornfield | March 08, 2016
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Generation X’s skepticism about retirement may be warranted, according to a report from the Insured Retirement Institute (IRI). Overall, more than one-third of this demographic has nothing saved for retirement. Other research calls this generation by far the most stressed.  

While retirement may still be years away, only 8% of Gen Xers have enough saved to support themselves in retirement. Even among the oldest Gen Xers, those aged 44 to 53, only 11% have adequate savings. To determine if a Gen Xer has sufficient savings, IRI considered the amount needed for an individual to purchase a deferred income annuity that would generate enough annual retirement income to bridge the gap between the average Social Security benefit and average expenditures for a retiree.

One problem could be that most Gen Xers—eight in 10—are DIY investors who manage their money without any professional guidance. Only one in five Gen Xers works with a financial professional. But Gen Xers who do seek professional advice are twice as likely to have at least $100,000 saved for retirement, compared with those who plan on their own. About eight in 10 Gen Xers describe themselves as being somewhat or not very knowledgeable about investing, and two-thirds rate their financial IQ as being average or low.

Those that have sought out advice say they are getting the help they need. More than eight in 10 say their financial adviser has discussed their plans for retirement, and seven in 10 of those who have consulted with a financial professional have had a retirement plan prepared for them. Gen X members who turn to professional services use them for investing (62%) and general financial management (45%).

The age people think they’ll be able to retire is creeping up: More than half of Gen Xers (58%) believe they will retire at age 65 or later, compared with 51% in the previous IRI study, and 42% in 2012.

NEXT: Worries do not align with actual calculations