Gen X’s retirement woes may give rise to a generation of ‘silver squatters’
Generation X is less fiscally secure and will need more financial and housing help from their families than older generations, a new study found.
Nearly a quarter of current 55-year-olds expect to need financial support from family in retirement — twice as many as 65- and 75-year-olds (12%). Potentially becoming “silver squatters,” one in five (21%) also expects to need housing support, compared to 12% of 65-year-olds and 9% of 75-year-olds, according to the study by Prudential Financial.
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Despite these expectations, nearly half of 55-year-olds (48%) who expect to need support have not discussed it with their family yet, Prudential found.
“You don’t want to have to rely on others,” said Brandon Goldstein, a financial planner with Prudential Advisors. “You don’t want to be a burden on a child. If you’re facing this as a reality, I encourage you to put a budget down on paper and assemble a team to help you.”
Gen X, those born between 1965 and 1980, are currently between the ages of 44 and 59 years old and in the throes of the preretirement years when they need to hunker down and save.
Read: It’s time for Gen X–ers nearing 60 to give their retirement plans a reality check
As they get older, Gen X can’t rely on younger millennials and Generation Z family members to prop them up, said Patrick Currall, a financial adviser with Signature Estate & Investment Advisors.
Millennials are those born between 1981 and 1996, while Gen Z are those born between 1997 and 2012.
“They won’t be able to support an older generation. I don’t believe so. It’s up to the individuals to make their retirement happen,” Currall said.
In addition to coming of age at a time when pensions are few and far between, Gen X also faces the prospect that Social Security will be unable to pay full benefits in 2035 unless Congress makes changes to the system.
“When I do a plan for someone and there’s a shortfall, I say, ‘I’m not going to tell you what you want to hear.’ I’m going to tell you you may need to work longer, work part time in retirement and cut back expenses in retirement,” Goldstein said.
Steven Conners, founder and president of Conners Wealth Management, agreed.
“Gen Xers are going to have to get used to the idea that retirement at 65 is off the table,” Conners said. “There’s no magic panacea. You need to bite the bullet and do what you need to do. Working to 70 may be in order — start thinking about that. The new mentality is that 65 is no longer retirement age.”
The average retirement age in the U.S. is 62, according to a 2024 MassMutual survey.
The Gen X cohort is smaller than the baby-boomer generation, which is grabbing headlines as 11,000 boomers a day turn 65 in a demographic bubble known as “Peak 65,” according to the Alliance for Lifetime Income’s Retirement Income Institute. This trend will continue through 2027.
“Attention today is rightly centered on the approximately 11,000 65-year-olds entering retirement every day, but we must also focus as an industry on the opportunity to help a slightly younger generation of workers entering the critical 10-year countdown to retirement. Further, the financial futures of certain cohorts — such as women — are especially precarious,” said Caroline Feeney, chief executive of Prudential’s U.S. businesses.
Today’s 55-year-olds have median retirement savings of less than $50,000, falling significantly short of the recommended goal of having eight times one’s annual income saved by this age, Prudential said. Two-thirds (67%) of 55-year-olds fear they will outlive their savings, compared to 59% of 65-year-olds and 52% of 75-year-olds, according to Prudential.
“We encounter these scenarios all the time. Unfortunately, it’s a sad story. They say ‘I started a 401(k) and contributed,’ but it’s not enough. They have a generic, misinformed idea that completely ignores the scale and scope of the reality of retirement. Just because you had $20,000 in an IRA doesn’t get at the big picture of funding retirement,” Currall said.
“Gen X is very late in the game. They have no choice but to try to catch up,” Currall said. “For those who are overwhelmed and exasperated, they’re not going to be successful. You have to start making small but important decisions and compounding these good decisions every day. Every extra dime you save goes to the solution to avoid disaster.”
“Start building a plan around a half-step retirement. Full retirement is not on the table for you. You’ll need the gig economy [and] partial-income opportunities,” Currall said.
Amid the demise of pension plans that supported prior generations, 55-year-olds are nearly twice as likely as 65- and 75-year-olds to rely on “do-it-yourself” plans like 401(k)s to fund their retirement, Prudential said.
Many Gen Xers also are just scraping by. More than one-third (35%) of 55-year-olds say they would have trouble putting together $400 within one month to cover an emergency expense, compared to 19% of 65-year-olds and 15% of 75-year-olds.
Of course, not all Gen Xers are a financial mess.
“Those who are working in larger companies and have 401(k)s and corporate matches are doing just fine. It’s the people working with smaller firms or who are self-employed who don’t have enough saved,” said Kyle Kraus, a financial adviser and senior wealth planner with AlphaCore Wealth Advisory.
“Reduce conspicuous consumption. Often people are inadvertently spending and they don’t realize it. They should save until it hurts,” Kraus said.
