As the oldest members of Generation X approach their 60th birthdays in 2025, a sense of anxiety is palpable among many in this so-called "forgotten generation." While retirement should ideally spark excitement and anticipation, for Gen Xers—born between 1965 and 1980—it often brings a gnawing uncertainty. According to a 2023 survey cited by Western & Southern Financial Group, more than half (52%) of Gen X respondents said they were unsure of their ability to retire comfortably, the highest rate of any American generation.
Why is this group, sandwiched between the larger Baby Boomer and Millennial cohorts, facing such a daunting road to retirement? The answer lies in a unique confluence of historical, economic, and social factors that have shaped Gen X’s financial journey.
Gen X entered the workforce just as traditional pensions were fading away and 401(k) plans were only beginning to take hold. Kerry Hannon, senior columnist at Yahoo Finance and co-author of "Retirement Bites: A Gen X Guide To Securing Your Financial Future," explained on the HerMoney Podcast, "The whole business with the 401(k) coming on stream—nobody knew what it was, what we were supposed to do. Nobody provided us with the financial education to know what to invest in, and frankly, there weren’t very many options. Nor could you put very much money into a 401(k) at that time. But ‘do it yourself retirement’ was all of a sudden the name of the game."
This abrupt shift left many Gen Xers unprepared, forced to navigate the world of self-directed retirement savings with little guidance. The confusion was compounded by a series of economic setbacks: the dot-com bubble at the start of their prime earning years, the Great Recession of 2008, and most recently, the COVID-19 pandemic. Each of these events disrupted savings patterns, job security, and homeownership prospects.
According to FinanceBuzz, the 2008 recession hit Gen X especially hard, leading to higher rent, lower pay, and widespread job losses. Many Gen Xers faced mortgage foreclosures, and for some, the financial scars remain visible today. The National Association of Realtors reports that just 24% of recent homebuyers are Gen Xers, a stark reminder of the lingering impact of the housing market collapse.
Debt has been another persistent challenge. The U.S. Department of Education notes that the youngest Gen Xers are likely to carry student loan balances exceeding $44,000, and there are 14.4 million Gen X ex-students still in debt—more than double the number of Boomers. Add to this the highest rates of credit card debt among any generation (39% carry a balance, according to the FINRA Investor Education Foundation), and it’s clear why savings have lagged. The typical Gen X household, Investopedia reports, has just $40,000 set aside for retirement.
It’s not just about money, though. Gen X is also widely known as the "sandwich generation," with 81% of those juggling care for both children and aging parents belonging to this cohort. As Investopedia points out, nearly a quarter of adults who provide for at least one child under 18 also care for a parent over 65. The financial and emotional strain of these dual caregiving roles leaves little room for robust retirement planning—or even for building a basic emergency fund, which only a third of Gen Xers reportedly have, according to the American Bankers Association.
Despite these hurdles, financial experts stress that it’s not too late for Gen X to turn things around. Alexa Kane, a financial planner at Pearl Planning, told Investopedia, "Everyone starts somewhere, and getting the ball rolling is key." She recommends that Gen Xers take advantage of "catch-up" contributions to retirement accounts. For those aged 50 or older, the IRS allows an extra $7,500 in annual 401(k) contributions on top of the $23,500 limit, and even higher limits for those aged 60 to 63. IRAs also permit an additional $1,000 in contributions for those over 50.
Reducing debt is another critical step. Strategies like the snowball or avalanche method for paying off high-interest credit cards, downsizing expenses, and considering debt consolidation can free up more money for savings. For some, working an extra year or two before retiring may be necessary to shore up finances.
Side hustles are increasingly seen as part of the solution. Nearly 42% of Gen Xers expect to supplement their retirement income with gig work—anything from tutoring and freelance writing to dog walking or furniture flipping. However, as Investopedia warns, side hustle income may trigger quarterly estimated tax payments, so careful planning is advised.
Healthcare costs loom large as well. Fidelity’s 2024 Retiree Health Care Cost Estimate found that Americans typically underestimate medical expenses in retirement, expecting to spend about $75,000 when the real figure is closer to $165,000 per person. Health savings accounts (HSAs) offer a way to prepare: in 2025, individuals can contribute up to $4,150 (or $8,300 for families) in pre-tax dollars, and the funds can be invested and withdrawn tax-free for qualified expenses in retirement.
Diversifying investments is another avenue for Gen Xers seeking stability. Real estate, for example, can be a hedge against inflation, whether through direct ownership, REITs, or crowdfunding. As always, experts recommend consulting a financial advisor to tailor strategies to individual needs.
On the financial services front, there’s growing recognition that Gen X represents a massive, largely untapped market for advisors. As Financial Planning notes, Gen X is poised to inherit an estimated $39 trillion in the coming years—second only to millennials. Yet, only 15% of Gen Xers use social media to search for financial products or services, making search engine optimization and informational content more effective marketing strategies than flashy social campaigns. Advisors are encouraged to address Gen X’s real concerns—debt reduction, saving for college, building wealth while caring for family—while weaving in a bit of '80s and '90s nostalgia to build trust and rapport.
Ultimately, while the deck may have been stacked against Gen X in many ways, resilience is a defining trait of this generation. Kerry Hannon’s "HOVER" method (Hope, Optimism, Value, Enthusiasm, Resilience) serves as a reminder that mindset matters. As Hannon puts it, "People who are optimistic about their financial future tend to be the most successful ones. So it’s a lot about changing your mindset and being able to approach this, not with wringing your hands, but saying, ‘Well, how can I not?’"
Retirement for Gen X may not look like the glossy brochures of decades past, but with thoughtful planning, adaptability, and a healthy dose of optimism, this generation can still look forward to a rewarding next chapter.
