Here’s What Gen Xers Have Saved for Retirement

 

Maurie Backman (TMFBookNerd) | Source, The Motley Fool

We hear a lot about how Americans are unprepared for retirement, and it seems like members of Generation X — workers in their late 30s to early 50s — are no exception. The median retirement savings balance among Gen Xers is just $35,000, according to recent data from Allianz. Incidentally, that’s the same level millennials have achieved.

And that’s precisely the problem: Gen Xers should be way ahead of their younger counterparts, and have well more than $35,000 set aside at this stage of life. And if they don’t start ramping up their savings, they’re going to come up short in the future.

Man with headphones and arm band

Why aren’t Gen Xers saving more?

You’d think that Gen Xers would be outsaving millennials, since they’re more likely to be advanced in their careers and earning higher salaries. But Gen Xers also have their share of expenses to contend with, like mortgage payments, child care expenses, and credit card debt. In fact, adults in their mid-40s to mid-50s have higher levels of credit card debt than any other age group.

But perhaps another part of it boils down to an overreliance on Social Security. Countless workers neglect to save for retirement with the intent of falling back on those benefits. But the ability to live off Social Security alone is nothing but a dangerous myth. In a best-case scenario, Social Security will cover about half of the average retiree’s expenses, assuming we’re talking a modest lifestyle. That leaves workers to tackle the remaining half — and without savings, that’s apt to be a challenge.

Gen Xers need to do better

So how much should the typical Gen Xer have saved for the future? According to Fidelity, workers should have about three times their salary socked away by age 40, four times their salary by 45, and six times their salary by 50. Those are some solid benchmarks to follow. Since the median income for U.S. employees is somewhere in the ballpark of $51,000, it’s safe to say that Gen Xers with just $35,000 set aside have some serious catching up to do.

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