With baby boomers retiring, don’t forget about the needs of Generation X

By David Shields

WealthMark Advisors, Inc


Members of Generation X are in for a much rockier retirement than their parents and grandparents, a new study shows. According to research conducted by the Pew Charitable Trusts, Gen X was hardest hit during the Great Recession and is least prepared for retirement. Members of this generation, who were born between 1966 and 1975, lost nearly half of their wealth as a result of the economic downturn. Between 2007 and 2009, over 50 percent of Gen-Xers saw a depreciation in their retirement account, with the median loss amount at $13,851, while their home equity dropped 27 percent.

You might think that, because they are the youngest generation this study examined, Gen-Xers would be most likely to recover their wealth before retirement. But the startling fact is that they have the lowest predicted replacement rates. A little over half of Gen X is unlikely to recover more than 50 percent of their lost retirement savings, if they had any to begin with.

All of these figures point to the likelihood that Generation X will be the first American generation to be worse off in retirement than the preceding one. As a result, they are much more likely to put off retirement and work long into their 60s and 70s.

The study concludes that “as policymakers focus attention on Americans’ retirement security, particular consideration should be paid to helping the youngest cohorts change course and prepare for financial security over the long term.”

But as an advisor, you are well-suited to help Gen-Xers build and secure a nest egg by suggesting the right financial product for the right occasion. If the latest retirement preparedness study is any indication, this is something the members of Generation X will sorely need when they are ready to retire.