Gen Xers Getting Retirement Help — And They May Need it
Most Gen X workers who participate in a 401(k) plan are using some form of professionally managed account in those plans — though less than a quarter say that saving for retirement is their greatest financial priority at present.
Just over half (56%) of those Gen Xers — the first of whom will start turning 50 next year — who participate in their 401(k) or similar plans are using some form of professionally managed account in those plans, such as a managed account service, strategic allocation funds and/or target date funds, according to a new survey by Transamerica Center for Retirement Studies
. Eighty-three percent of Generation X workers are saving for retirement through employer-sponsored plans, at a median contribution rate of 7%. They began saving for retirement at the median age of 27.
At the moment, more than a quarter (27%) of Gen Xers are focused on paying off debt — though retirement, cited by 24%, trumps “just getting by/covering basic living expenses,” which was cited as a top priority by 21%.
Sixty-one percent of Generation X workers are confident that someday they will be able to fully retire with a comfortable lifestyle, though only 14% are “very confident” of that. (The report notes that Generation X and their Baby Boomer counterparts share similar level of confidence, while Millennial workers are generally more upbeat about their prospects). However, roughly a third (34%) of Generation X workers expect their standard of living to decrease when they retire — and a whopping 83% are concerned that Social Security will not be there for them when they are ready to retire.
It is not surprising then to find that a majority of Generation X workers (54%) either plan to work past age 65 or do not plan to retire — and that most (62%) envision a phased transition into retirement, continuing to work while reducing their work hours. A slim majority (51%) also plan to continue working after they retire, including 38% who plan to work part-time and 13% full-time. Those who plan to work after retirement and/or past the traditional retirement age of 65 say they will do so:
for the money (53%);
to stay involved (20%);
because they enjoy what they do (13%); or
for the benefits (9%).
Sixty-six percent of Generation X workers expect their primary source of income in retirement to be self-funded through retirement accounts (52%) or other savings and investments (14%). Seventy-nine percent of Generation X workers who work full-time at their current employer are offered a 401(k) or similar retirement plan. That is more than double the percentage of Gen Xers working part-time who are offered such a plan (39%) — a gap that the survey’s author notes is also found among Millennials and Baby Boomers.