Prudential Research Finds Gen X Particularly Unprepared for Retirement

New research findings reiterate concerns that American adults—often in their peak earning years—are not saving enough for retirement and that retirement plan advisement could be helpful at the plan sponsor and participant level.

Members of Generation X—born between 1965 and 1980—currently face financial obstacles that are reshaping their retirement plans as they approach their final working years, according to research released by Prudential Financial Inc. last week in a report, “Gen X: Retirement Revisited.”

Among Gen Xers, 46% of respondents—which corresponds to 30 million individuals if extrapolated to the entire cohort—are uncertain if they will have enough savings to live comfortably during retirement, according to research cited in the report. These concerns are mirrored by Gen X’s savings, with 35% reporting savings of less than $10,000 and 18% reporting no savings at all.

“Gen X faces one of the most complex landscapes for retirement readiness in decades, including the decline of defined benefit pension plans which supported prior generations’ retirement, as well as significant uncertainty about the economy and long-term Social Security benefits,” Rob Falzon, vice chair at Prudential, wrote in the report.

Postponing Retirement

A significant portion of Gen X workers are postponing their plans for retirement, according to Prudential’s survey. Nearly half (47%) of working Gen Xers now anticipate retiring later than originally planned, and 40% of the generation intends to work part-time even after retirement.

Unlike Baby Boomers, most Gen Xers will not be relying on the value of their homes to finance their retirement, with only 16% of Gen Xers planning to do so, according to Prudential. Meanwhile Baby Boomers are currently capitalizing on record home equity and represent the largest group of buyers and sellers across the country.

Just 12% of Gen Xers anticipate receiving an inheritance as a source of retirement income, while Baby Boomers—some of whom are parents of Gen Xers—are projected to pass down more than $70 trillion, according to the report. Furthermore, a significant majority of Gen Xers (84%) do not anticipate leaving an inheritance of their own.

“This data underscores how important it is for Gen X to adopt a new set of retirement strategies designed to protect and grow their savings, and, when possible, translate their assets into reliable sources of future income,” Falzon wrote.

Lacking Retirement Confidence

Survey findings released by personal finance platform Unbiased Inc. last week also indicated retirement unreadiness among Americans nearing retirement. The London-based firm, which launched a U.S.-based website earlier this year, found that only 30% of U.S. adults of all ages reported feeling high levels of confidence about their retirement. Furthermore, 76% of U.S. adults older than 50 expressed little or no confidence in available retirement products.

A significant factor contributing to retirement anxiety could be the absence of professional guidance, Unbiased suggested. Almost half of the respondents (47%) relied on online searches and advice from friends or family as their primary sources of financial information. Just 30% of individuals sought the expertise of a professional financial adviser.

Among those who participated in the survey and expressed confidence in their retirement options, a noteworthy 25% attributed their assurance to the involvement of a financial planner in their financial affairs.

The Prudential Pulse survey was conducted on behalf of Prudential by the Brunswick Group from March 31 to April 6 among 2,000 pre-retiree Gen Xers in the U.S. The Unbiased Retirement Confidence Survey received responses from 1,071 Americans older than 18 from May 5 to 9.