A recent survey found that Generation X will likely fall short of the savings needed for a comfortable retirement, prompting one expert to warn that Gen X will need to cut spending and increase savings to prepare for their retirement, The New York Post reported.
The Schroders 2023 US Retirement Survey found that those ages 43 to 58 said they would need retirement savings of $1,112,183 to live comfortably but expect to only have $661,013. The $451,170 gap between what is needed and what is likely among Gen. X exceeds the estimated gap faced by Baby Boomers and Millennials.
According to Schroders’ Deb Boyden, the generation currently heading into retirement is “largely without the safety net of a defined pension plan,” making the stakes much higher “and the margin for error” lower.
The survey found that 45 percent of Gen X said they haven’t done any planning for retirement at all, compared to 30 percent of Baby Boomers and 43 percent of Millennials. About two-thirds of Gen X said their employee retirement plans are not as high as they had hoped.
However, according to the Schroders survey, it will not be easy for Gen. X to close the retirement savings gap since 32 percent of respondents have all their assets in cash and only 11 percent plan to wait until age 70 to receive the maximum benefits from Social Security.
The primary reason for these two trends is fear, according to the survey. Gen X respondents worry that they will lose all of their cash or that Social Security might become insolvent before they can start receiving benefits.
On a brighter note, Schroders’ Deb Boyden points out in the survey that even those on the older end of Generation X still have some time before they reach full retirement age. If they use that time to come up with a retirement plan while increasing their savings and investing more, they could improve their “retirement readiness” while there is still time.