Generation X believes that retirement will require the same (or more) salary than today

As the oldest members of Generation X prepare to turn 60 in 2025, they face a potential shortfall in retirement savings. The majority of cohort members report that their retirement savings are three times their annual salary, while only 36% say they have financially planned for a long-term care event.

This is according to the 2024 Planning and Progress Study published by Northwestern Mutual. The survey was conducted earlier this year by Harris Poll based on a sample of 4,588 Americans aged 18 years and older. Results were weighted by demographics including age, gender, marital status, education and income.

The survey found that 58% of Gen Xers and 64% of Baby Boomers “who have not yet retired say they expect their monthly income in retirement to be the same as or greater than theirs.” current monthly income to retire comfortably.”

A third (33%) of Gen X respondents believe they will have to pay more than their current working salary in retirement, compared to 29% of Baby Boomers. Another 25% of Gen Xers and 35% of Boomers believe they will need the same amount as their working salary to retire comfortably.

“Compounding financial concerns, more than half of Gen Xers (51%) say their retirement savings are just three times their annual income or less—while many financial experts recommend saving about 10 times their annual income before retiring. salaries. ” explained in the study.

In terms of planning for the best retirement possible, many people may not be taking the proactive steps needed to adequately save for later years, according to Camila Williams-Kemp, chief product officer at Northwestern Mutual.

“For the millions of Gen Xers soon to turn 60, the difference between retiring on time and living comfortably, or working longer and lowering retirement expectations, will come down to financial planning,” she said. “It’s never too late to take action, but the longer people wait, the more difficult it becomes and the stakes rise.”

However, other recent data suggests that Generation X is making progress in saving for retirement. Survey from Loyalty A report released in August found that Gen X savers saw significant growth in individual retirement accounts (IRAs), based on 401(k) and 403(b) data drawn from 26,100 corporate defined contribution plans and approximately 32 million participants as of 30 June 2024. .

The generation has also shown an increased interest in finding housing suitable for aging in place.

Members of Generation X are already taking active steps to think “about where they will live in their 70s, 80s and even 90s,” according to a report from The New York Times earlier this year based on data Harvard University Joint Center for Housing Research.

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