Gen X Retirement Planning: Views and Strategies

two gen x men take it easy on a boat and talk genx retirement planning strategies

Like the generation it references, the phrase “Gen X retirement planning” doesn’t get much airtime. Sandwiched between the much larger Millenial and Baby Boomer generations, Generation X is often overlooked in retirement conversations and under-studied in general. The oldest members in this cohort are about 58, right on the cusp of retirement, while the youngest members are 43, still in their peak earning years and likely decades away from leaving the workforce. 

Their upbringing, influenced by the loose constraints of their parents, MTV, and other cultural factors, helped shape their identity and general distrust of authority. While some of those elements may account for their reluctance to enact longer-term retirement planning strategies, experts contend that more endemic causes are at play.          

Shifts In Retirement Planning Hit Gen X 

Most Gen Xers are offspring of Baby Boomers who relied on working for the same employer to fund their retirement, “so they didn’t instill the importance of taking charge of their future in their children,” asserts Melanie Musson, a retirement expert with  “Gen X is finding out the hard way how vital it is to begin saving as young as possible,” she said. 

Generation X was also the first generation in their prime working years to experience the shift away from traditional pension plans to 401(k) plans, which placed far more responsibility on the individual. 

In 1981, 84% of full-time workers at large companies had a pension plan, according to the Bureau of Labor Statistics. By 2020, only 28 percent of employees were enrolled in them. 

“For the individual with self-control and discipline, this shift was a huge benefit, but for the population that struggles with self-control, a significant portion of it, this shift to self-responsibility did not bode well,” explains Daniel Colston, CEO of Upward Financial Planning in Roanoke, Va.  

Other important factors have limited Gen X nest eggs, including years of stagnant wages, high student loan debt, economic downturns, rising expenses of college-aged children, and supporting aging parents. 

Perception vs. Reality 

Though Gen Xers were dubbed the so-called slacker generation, fueled by pop culture icons of the 1990s, it may not hold too much substance when describing their role in the workforce and perceptions of retirement. 

“Gen Xers may have a more realistic perception of retirement than older generations,” suggests former financial planner Michael Ryan, who now provides financial coaching.

And those perceptions are troubling. According to a 2021 study by the National Institute on Retirement Security, 59% of Gen Xers were pessimistic about achieving financial security in retirement, much higher than the older Baby Boomer (43%) and Silent (26%) generations. Only Millenials (72%) had a more unfavorable view. 

Generation X’s affinity for the alternative may have led some astray concerning financial decisions, according to Asher Rogovy, chief investment officer of New York-based investment advisory firm Magnifina

Rather than relying on traditional stock and bonds, or more long-term, safer investments, “Gen Xers were often drawn towards risky and unsound alternative investments such as penny stocks, foreign exchange trading, crypto, house flipping, and even some stock option strategies,” he said. 

Tampa retirement and wealth advisor Andrew Lokenauth contends Gen Xers often embrace a duality regarding retirement planning. 

“They understand that they may need to work longer and save more in order to have a secure retirement,” he said. “However, they also tend to be more skeptical of traditional retirement planning advice and may be less likely to trust financial institutions.” 

Tips and Advice for All Stages of Planning

For members of any generation, planning is the most important aspect of a successful retirement, argues John Stoj, founder of Atlanta-based registered investment advisor Verbatim Financial. He backs this simple two-step plan in charting a course. 

  1. Take stock of your current financial position, health, and when you want to retire. 
  2. Figure out how much you can realistically save annually. 

“The more you can save, the closer you can get to retirement,” Stoj adds. “You can work with an advisor to fine-tune a financial plan, but savings will always be the most important component under your control.” 

Tyler Seeger, managing director of Laguna Niguel, Calif.-based senior living solutions finder Retirement Being, offers some practical advice for those who want to build a nest egg but haven’t put a plan in motion yet.  

“You can link your checking account to your retirement savings account to automate your savings,” he said. “There is no possibility of you losing that retirement money if you save in this manner.” 

Gen Xers planning for retirement should also consider tax-free investment options, like Roth IRAs and Roth 401(k) plans, over traditional 401(k) plans, Senior Investment Advisor Steven Holmes recommends. 

Health Savings Accounts, or HSAs, also offer the triple tax benefit of pre-tax contributions, tax-free interest, and tax-free withdrawals for qualified medical expenses.  

“HSA plans are an excellent method to prepare for retirement healthcare bills,” said Holmes. “These funds could cover future dental, vision, hearing, and long-term care costs.” 

He also has some words of caution, considering one of your most crucial financial decisions is how to invest in retirement.  “Only invest in something you understand,” he asserts. “Never invest in anything you don’t fully comprehend, no matter how magnificent something appears.” 

In for the Long Haul 

Generation Xers have experienced several market downturns during their working years, including the bust, the financial crises, and the pandemic, which claimed tens of millions of jobs along the way and left many with lingering job insecurities. Meanwhile, rising healthcare costs and debt repayment obligations have left other Gen Xers in a financial bind. 

“All these factors significantly affect their ability and avenues available for savings,” said Tom Koesternen, a chartered financial analyst in California. “Nevertheless, they must prepare for the long haul and have sufficient retirement savings to lead a comfortable retirement life.” 

Lokenauth emphasizes the power of compound interest to drive home the importance of retirement planning for Gen Xers. “By starting to save for retirement early, even small contributions can grow significantly over time,” he said. “Additionally, it is important to educate Gen Xers about the potential risks of not saving enough for retirement, such as outliving their savings or being forced to rely on government programs.” 

For many Gen Xers, the time to implement a retirement plan is now, Rogovy insists. “Prudent retirement investing requires time, and Gen Xers on the cusp of retirement don’t have much left.” 

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