Members of Generation X will be reaching the milestone of turning 60 next year. For many individuals, it is not financially feasible to take a break from work in the near future. Gen Xers, born between 1965 and 1980, began their careers during a significant transformation in the American workforce. Companies transitioned from offering pensions that guarantee a fixed income after years of service to plans like 401(k)s, which give employees more control over their retirement savings.

During the 2008 financial crisis, some individuals from the Gen X generation experienced significant setbacks in their prime working years. Many people are still burdened by the weight of their student loans. Their children are staying at home longer as they transition into adulthood, while their aging parents often need assistance. Many people have little faith in the ability of Social Security to provide sufficient financial support in their later years.

According to certain metrics, the financial situation of Gen Xers is less favorable compared to that of their baby boomer predecessors. According to inflation-adjusted Federal Reserve data, the median household net worth of individuals in the Gen X age group (between 45 and 54 years old) in 2022 was approximately $250,000. This figure is about 7% lower than the net worth of baby boomers at the same age in 2007. Only one age group saw a decline in median wealth during the 15-year timeframe.

David Bryan, 55, makes approximately $35,000 annually working as a school-bus driver and resides on Tybee Island, Ga. He does not possess any real estate and has accumulated approximately $100,000 in retirement savings from his past occupations as a railroad conductor and a researcher at a college foundation. His parents led a different life from him, having worked for many years in the sheriff’s department and the post office. They were fortunate to receive steady pension checks upon retirement. “I plan to continue working as long as my body allows,” Bryan stated.

The approximately 65 million Americans in Gen X often find themselves overlooked, caught between the more prominent and vocal baby boomer and millennial generations. They are often referred to as the “latchkey generation,” frequently returning home from school to an empty house during their childhood. In a recent report, Goldman Sachs Asset Management referred to Gen X as the generation that experienced the “401(k) experiment.” For many years, employers frequently provided support to dedicated employees in their later years through traditional pensions that offered fixed payments for life. The rise of the 401(k) system placed the burden on individuals, and Generation X found themselves right in the middle of this significant change.

According to Jeremy Horpedahl, an economics professor at the University of Central Arkansas and director of the Arkansas Center for Research in Economics, Gen X is the first generation that was largely expected to navigate their retirement plans independently. The original proponents of the 401(k) never anticipated its widespread adoption as the primary method of retirement savings for most Americans. It is named after a line in the tax code that was modified in 1978, providing executives with a tax-free method to delay receiving compensation from bonuses or stock options. Human-resources executives and economists embraced the 401(k) as a means to promote saving for rank-and-file employees.

In the mid-1980s, the private sector saw a shift in retirement plans. Defined-contribution plans, like 401(k)s, became more popular than traditional pension plans, known as defined-benefit plans. Nowadays, private pensions are quite uncommon. When Gen Xers joined the workforce, the 401(k) was a novel idea. Features like automatically enrolling employees in a workplace plan and automatically increasing contributions every year didn’t become widespread until later.

Several other popular private retirement savings options have been introduced in the past fifty years. The individual retirement account, a tax-deferred investment vehicle, was authorized in 1974. On the other hand, the Roth IRA, funded with posttax money and tax-free when withdrawn, was established in 1997. In 2023, Vanguard Group reported that individuals in the 45-54 age group, known as Gen Xers, had a median account balance of approximately $60,000 in their defined-contribution retirement plans. For the majority of Americans, this falls short of the suggested target set by financial experts, which advises having approximately six times one’s salary saved for retirement by the age of 50.

John Kotrides, a 54-year-old resident in the vicinity of Charlotte, N.C., has been diligently contributing to his 401(k) retirement accounts since he embarked on his banking career nearly thirty years ago. However, every time he switched jobs, he typically withdrew his 401(k) funds due to pressing financial needs, such as home repairs or moving expenses. After witnessing crashes such as the bursting of the dot-com bubble, it didn’t seem worthwhile to keep the money invested in the stock market. Retirement appeared distant. “There is no longer a generation of individuals whose employer guides them from their initial job to their retirement,” he stated. “When we were offered 401(k)s, I don’t believe it was a favorable arrangement.” Kotrides mentions that his retirement assets are limited, apart from his primary residence where he resides with his wife and two daughters, aged 12 and 20. Since leaving his position as a mortgage lender amidst the pandemic, he has taken up bartending part-time and primarily generates income by creating social-media content, particularly nostalgic videos centered around the 1970s to 1990s. He enjoys having additional time to spend with his family. “This is essentially my retirement strategy,” he remarked. “I am fully committed to working diligently to support my family for as long as necessary.”

Even individuals who  have profited from the 401(k) system acknowledge that it has presented challenges. Scott Zibel, a 56-year-old from Leominster, Mass., diligently began contributing to a 401(k) retirement plan when he first entered the workforce at the age of 15, working at a local grocery store. His father motivated him to make a contribution. The account flourished as he diligently worked at the store throughout his college years and eventually ascended to the position of manager. At a young age, he pursued a career in education and looks forward to enjoying a pension in his later years. During the stock market crash in 2020 due to the Covid pandemic, he and his wife decided to withdraw the money from his wife’s 401(k) and transfer it to a money-market fund. Now they have reinvested the money, allocating a larger portion of it to bonds compared to their previous investment strategy. “I appreciate the 401(k) plan, although it does come with its uncertainties,” he remarked, roughly estimating his family’s retirement savings to be slightly over $1 million. Zibel believes he is well-prepared for retirement, although he acknowledges the need to live a frugal lifestyle in order to save. He has chosen to keep the same car for 12 years and has prioritized saving money by not investing in new carpeting for his 30-year-old home. “My wife and I have put a lot of thought into our financial planning, which has made it challenging to fully enjoy the present,” he remarked.

For certain individuals from the Gen X generation, the impact of the 2008 financial crisis was significant and it took them a considerable amount of time to bounce back. In 2007, Darling “Diva” Moore reached the pinnacle of her career as a managing partner at a title company in West Palm Beach, Fla. After the housing market took a nosedive, her company unfortunately faced financial ruin. She struggled to afford her apartment and had to rely on her significant other for a place to stay, occasionally resorting to sleeping outdoors or in the car. “The Great Recession had a profound impact on our lives,” shared Moore, who is 57 years old. “After that, I’m not sure how many individuals from the Gen X generation had faith in that system.” It took her over two years to find a new job after she moved to Denver. She pursued further education, earning an online bachelor’s degree in business management and a master’s degree in human relations and organization development. Currently, she works as a career counselor, managing her own business. As she nears her 60s, Moore is currently in the process of tracking down the funds she had invested in different 401(k) accounts during her earlier professional years. Whenever she changed jobs, she neglected to transfer her balance to an IRA or new 401(k), resulting in her accounts being spread out among different plan providers. “Back in the ’90s, it wasn’t exactly a walk in the park to track down the whereabouts of that money,” she remarked. She is also dealing with student debt from a for-profit associates-degree program she finished in her 20s that has grown to almost $90,000 from around $27,000 because of interest.

A significant increase in the number of education loans among Gen Xers aged 45 to 54 has been observed, with over a quarter of U.S. households in this age group having such loans in 2022. This is in stark contrast to the approximately 15% of baby boomers who had education loans at the same age in 2007, as reported by the Federal Reserve. Soaring tuition costs, high rents, and other inflationary pressures are concerns that both Gen Z and Gen X share. Numerous individuals from the Gen X generation have invested significant amounts of money to provide their children with a college education. Young individuals are increasingly choosing to reside with their parents and depend on them for financial assistance well into their adult years.

Pamela Likos’s 21-year-old son resides with her in the suburbs of Madison, Wis., while her other son and daughter are currently pursuing their education at college. “My children are still definitely not grown and flown,” Likos remarked. Many individuals from the Gen X generation find themselves in the challenging position of caring for their aging parents, who are enjoying longer lifespans compared to previous generations. Likos is not currently facing that situation, but her stepmother, who has Alzheimer’s, and her father are in their 80s. She expressed her concern about her parents’ health, hoping that they will remain in good health for the next five to 10 years. Financially, she admitted that they are not yet prepared to provide assistance. Likos, aged 54, was the first person in her family to pursue higher education. However, she took a break from her career for approximately two decades after getting married and choosing to be a full-time mother. After her divorce around seven years ago, she discovered herself without any personal savings and lacking a resume to pursue job opportunities. After obtaining a license to work as an esthetician, she has spent the past few years honing her skills in the field. Additionally, she has recently entered into a new chapter of her life by entering into a remarriage. Through her divorce settlement, Likos was awarded approximately half of her ex-husband’s 401(k) account, which now forms the majority of her retirement savings.

Individuals in the younger segment of Generation X, who are currently in their mid-40s, have a greater opportunity to enhance their savings as they approach retirement. Tyler Bond, the research director at the National Institute on Retirement Security, ponders the potential for contrasting retirement experiences among different age groups within the cohort. “The older Gen Xers may not have the time,” he remarked.

Avery Nesbitt, a 44-year-old operations manager in the Atlanta area, prioritizes enjoying the present rather than waiting for retirement to indulge in nice vacations or purchase a new car. He recognizes the importance of savoring life’s pleasures now, without relying on a substantial nest egg for the future. After experiencing the Covid pandemic, he realized the unpredictability of life. He and his wife have made small contributions to employer-sponsored retirement accounts, but they didn’t believe they had the means to save any more. They have a residence where they reside with their two children. That comprises the majority of their financial assets. According to him, he has invested a larger amount of money in life-insurance policies compared to retirement accounts.