Retirement isn't looking as rosy for Generation X. Many fortysomethings lag behind in retirement savings with many still trying to pay off student loans, while simultaneously juggling both college costs for their own children and caring for aging parents.
Pew Charitable Trusts' 2014 report "A New Financial Reality: The Balance Sheets and Economic Mobility of Generation X" noted that while Gen X-ers may make more money than their parents, only one-third have more money set aside for retirement. The report illuminated reasons such as the fact that Gen X has more debt than previous generations and the fact that the median Gen X-er owed almost six times more than his parents did when they were the same age.
"This is the generation I lose sleep over," says Catherine Collinson, president of the Transamerica Institute and author of Retirement Throughout the Ages: Expectations and Preparations of American Workers. "People in their 40s represent the critical mass, and this is the group that should be building their retirement, but we see them as being financially frazzled but still focused."
In her report, Collinson says fortysomethings are smashed between work, kids and parents after still trying to recover from the Great Recession.
She found only 10% feel "very" confident they will be able to fully retire with a comfortable lifestyle and 22% have made paying off credit card or consumer debt as being a major priority. Collinson and her team were encouraged that 82% of those who are offered a 401(k) or similar plan were participating and contributing the median amount (7%) of their annual pay. Unfortunately, 24% have taken a loan or early withdrawal against that savings, and 61% believe they will still be working past age 65 or have no plans to retire.
"Gen X-ers are taking care of everyone else before their need to retire," Collinson says. "Plus they are still dealing with the aftershocks from the recession--an impact that should not be underestimated."
The takeaway is make time to focus on retirement and get on track, because it's not over for Gen X. "You still have time to make a big difference on how much you can save so don't give up if you think you are too far behind," Collinson says.