New reports bare bad news and advice for Generation X's retirement

By Emily Hutto

ProducersWEB


As the American retirement landscape evolves, it has the potential to hit Gen X, and hit it hard. And the majority of members of this demographic, born between 1965–1974, aren't prepared for what's coming.

A 2012 report from the Insured Retirement Institute (IRI) revealed that less than half of 802 30- and 40-somethings interviewed had calculated how much money they would need for retirement. More than half of the females interviewed admitted to having little to no investment knowledge. Only one-fifth of the single interviewees had sought financial advising.

Another report by the Employee Benefit Research Group (EBRG) deems 44 percent of Gen Xers to be "at-risk" for running out of income during retirement. It predicts that 13 percent of single Gen X women can have shortfalls of more than $200,000.

The report suggests defined contribution plans as a solution to this emerging problem. These retirement plans, which specify employers' annual contributions, can have a significant impact on reducing shortfalls. Especially for the Gen X age group who has at least 20 years of eligibility for 401(k) plans, defined contributions can reduce $200,000 shortfalls down to only $23,000.

Approximately 18 percent of single males (and an even higher percentage of females) and 10 percent of families are likely to experience shortfalls in excess of $100,000. Critical to accurate evaluation of one's retirement budget, says the EBRG report, is considering the costs of nursing homes and health care.

The bottom line for Gen Xers: They're running out of time to do their research. Changing their retirement opportunities might fall on the shoulders of financial advisors actively seeking out this demographic.