Retirement Savings: These 3 Things Are Keeping Gen X From Saving for Retirement
Written by
Cindy Lamothe
Edited by
Amber Barkley
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Every generation does things a little differently from their predecessors. And that often involves the way they manage money.
Unfortunately for Gen X, saving for retirement has been a struggle. For those born approximately between 1965 to 1980, putting money away for their later years has been problematic for numerous reasons.
The Sandwich Generation
“As a fellow Gen Xer and financial advisor, I am often privy to the financial woes and inability of my generation to adequately save for retirement,” said Jennifer Aube, certified financial planner.
Gen Xers, like baby boomers, are part of the sandwich generation, she explained. “They have difficulty saving largely because they are sandwiched between caring for children and aging parents simultaneously.”
Aube noted that these well-intentioned individuals put off saving for retirement with the intention of catching up when they had an empty nest. “However, these same families find themselves now providing for their elderly parents, and the funds that they thought would be available for retirement are now earmarked for care needs.”
Ben Klesinger, founder and CEO at Reliant Insurance Group and Helping Hand Financial, shared a similar opinion. “I often work with Gen X clients who regret not starting to save for retirement sooner. Many were paying off student loans, getting married, having kids — life got expensive quickly. By the time they looked up, years had passed, and they felt way behind in saving.”
Below, experts outline the top things keeping Gen X from saving for retirement — and how they can get back on track.
Increased College Costs
Increased costs of college are one financial stressor that has Gen X individuals falling behind on their own retirement goal, said Aube. The Education Data Initiative reported that college tuition increased almost 37% between 2010 and 2023.
“Families do not want their children leaving college with copious amounts of debt and are trying to reduce the burden on their children by paying a portion or whole of their education costs,” Aube explained.
These costs are often paid for through school loans, current income that would otherwise go to retirement or through home equity loans.
“These loans then need to be paid back and may take up a significant amount of earned income even well after the child completes school,” Aube added.
David L. Blain, CFA and chief executive officer at BlueSky Wealth Advisors, also observed that competing priorities, like college funding, frequently trump retirement savings for Gen X. “While important, these short-term goals squeeze out retirement contributions. The key is balancing long and short-term financial needs with careful budgeting and making automatic contributions a habit immediately.”
They Can’t Count on the Pension System
“Gen Xers are the first generation to truly see the dissolution of the pension system,” said Aube.
She added that few individuals in Gen X have a pension plan outside of state and federal employees.
Lack of Financial Literacy
“The lack of knowledge and subsequent goal setting for retirement savings is significant,” said Aube. “Education was not provided in regard to intentional savings into retirement and non-retirement accounts. Many of the parents of Gen Xers had a pension plan in place that was a plug and play approach.”
Aube noted that education, intentional goal setting and personalized financial advice is imperative to reach retirement goals.
Blain agreed that Gen Xers also often lack financial education and find retirement planning overwhelming. “They don’t grasp compounding returns and true savings needs. Starting late, they must save far more to catch up.”
Advice for Gen X To Start Saving for Retirement
Gen Xers have time to catch up but must take action now, said Klesinger. “I find many feel confused by retirement planning and don’t fully grasp what they’ll need to save.”
He said a good advisor can create a custom plan to get them on track based on their priorities.
“The key is just to start,” he said. “Start saving anything, as much as possible, as early as possible. Years of regret won’t make up for lost time, but consistent contributions, as small as they are, will pay off hugely down the road.”
Blain agreed. “For Gen X, retirement saving must become habitual by any means necessary. … Whether setting up automatic transfers, cutting out lattes or taking a side gig, consistent action is key.”
Small amounts, he observed, add up significantly over time through compounding. “The sooner Gen Xers start, the less they need to save to reach goals. But they must start now. No amount of regret will make up for lost time.”
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