One Generation Has Lower Retirement Savings Than Any Other — and It’s Not the One You Expect

A recent Schroders survey indicates that Generation X, aged 44-59, faces the largest retirement savings gap among all living generations, with only 14% feeling on track. This cohort anticipates needing $1.07 million for retirement but expects to have only $603,000 saved, representing a nearly $467,000 shortfall. Key contributing factors include holding 35% of retirement assets in cash, a lack of formal retirement planning or financial advisor engagement, and intentions to claim Social Security benefits early, posing significant financial security risks as they approach retirement.

Analysis

Generation X, aged 44-59, faces the most significant retirement savings deficit among all living generations, with only 14% reporting they are on track. The Schroders 2024 U.S. Retirement Survey reveals an average expected shortfall of approximately $467,000, as Gen Xers anticipate needing $1.07 million but expect to have only $603,000 saved, a larger gap than both Baby Boomers and Millennials. This situation presents a moderately negative outlook for this demographic's financial security.

This substantial gap is primarily driven by three factors: a high allocation to cash, with 35% of retirement assets held uninvested, exposing savings to inflation and limiting growth potential. Furthermore, nearly half of Gen X respondents lack a formal retirement plan, and only 27% utilize a financial advisor, indicating a significant planning deficiency. Intentions to claim Social Security benefits early, with only 10% planning to wait until age 70, further exacerbate the issue by reducing potential lifetime income.

The implications are critical, as 54% of Gen Xers express concern about outliving their savings, facing rising healthcare costs and longer life expectancies with less time for market recovery. This demographic faces considerable financial pressure, potentially necessitating extended working lives or lifestyle adjustments without strategic intervention, contributing to a pessimistic tone regarding their retirement readiness.

Key Decisions for Investors

• Financial advisors and wealth management firms should strategically target Gen X clients with tailored retirement planning and asset allocation services, given their significant savings gap and low engagement with advisors.
• Investors should assess the long-term implications of inflation on cash-heavy portfolios, particularly for demographics nearing retirement, and consider investment vehicles designed to mitigate this risk.
• Evaluate companies providing retirement planning software, investment platforms, or specialized catch-up contribution products, as demand for such solutions from Gen X is likely to increase.