The Generation X Retirement Report Card Is Scary!

F Grade Report Card - The Generation X Retirement Report Card Is Scary!

Early Generation Xers (1965-1980), age 58, are nearing retirement, while the younger (43) folks are turning the corner into their peak earning years.

The National Institute on Retirement Security report “The Forgotten Generation: Generation X Approaches Retirement” indicates the majority are FAILING to save anything close to enough to retire comfortably.

Even with 401k programs available their entire careers, most still fall woefully short:

Average Retirement Balances far Exceed Median Balances Chart

  • The average account balance for private retirement accounts among working Gen Xers was $129,994 in December 2020.
  • The median account balance was only $10,000.
  • 40% of Gen Xers had accounts with zero balances.


“Gen Xers are not confident Social Security will be there for them when they need it.”


“These numbers should be alarming for anyone concerned about retirement security because they indicate that many Gen Xers will not be able to maintain their current standards of living in retirement. This not only has personal costs, but may have societal costs as well.”

The majority of Gen Xers, and their government, are FAILING to protect their future.

When To File For Social Security Special Report – Click Here!In 2017, I interviewed my nephew James, a late Gen Xer (born 1980). He clearly understands the big picture. His family is growing up and retirement issues will soon be looming. Time for an update.

DENNIS: James, thanks again for taking time for our reader’s benefit. I was surprised at the survey results. I thought with 401k programs, more people would be saving.

What is your reaction to the numbers?

JAMES: Hi Unc. I wish I was surprised, but several Bankrate surveys have also reinforced the premise. One showed 57% of Americans couldn’t afford an unexpected $500 expense. A 2023 update said 18% having nothing at all saved!

However, as a young Gen Xer, I am surprised we are so poorly prepared. The Boomer generation, “keeping up with the Jones” has carried forward more than I realized.

DENNIS: Many Xers are getting close to retirement age. For some, it looks like it isn’t important enough to cut back on their standard of living for a better future.

How do you look at retirement?

“The ability to discipline yourself to delay gratification in the short term in order to enjoy greater rewards in the long term, is the indispensable prerequisite for success.”

— Brian Tracy

JAMES: Despite Social Security and paying into PSERS (Pennsylvania State Employees Retirement System) for the past 21 years as a public-school teacher, I still consider retirement the sole responsibility of my wife and I.

You have written many times about Trusting the government to keep their social security promises. When you look at the numbers, I can’t see how that can happen.

While our state pension is considered safe, pension systems are like a pyramid, whose structure can only be maintained at the top if there is a steady foundation of contributors at the bottom. With a steady decrease in teaching staff across the state, I don’t bank solely on my state pension. Many teacher friends are saving next to nothing, feeling their pension will “take care of them.” They may be in for a rude awakening at the age when they can no longer correct it.

As the surveys said, many Xers need to get serious about saving for the future, or they will have to work into their old age and/or have to radically change their standard of living.

DENNIS: I tell readers I had a “financial epiphany” somewhere in my mid-40s when I filled out a retirement planning worksheet. It was a serious wake-up call, the numbers came to the same conclusions.

You seem to have a strong perspective about retirement. Can you elaborate?

JAMES: Retirement is no longer just a term we used in a personal finance class.

My wife and I are lucky enough to still have our parents, and they are in good health. We have seen them cross the retirement bridge, live comfortably, and have plenty of time to enjoy things that are important to them – particularly being grandparents. What a multi-generational blessing it is.

Now, particularly with our 2-year-old son, we look forward to the day when we can do the same thing for future generations. Being able to dote over grandchildren is worth making some sacrifices today.

DENNIS: I’ve been proud of how you have always been able to look out 10-20 years into the future and plan accordingly. Can you bring our readers up to date on your family situation and the challenges you face in the next decade or so?

JAMES: We were in our early 40’s when our little guy arrived. That changed the time frame for sure.

We tried the landlord route and it was tough, finally flipping our two properties for a nice profit. We were fortunate enough to use the proceeds to pay off our home mortgage in our late 30s. We’ve added a cabin/vacation home near a lake which is a wonderful family gathering place.

As part of this financial sequence, we also refinanced when interest rates dropped. We were able to convert a 30-year mortgage, down to a 15-year mortgage, and our payment only increased by $100/month.

We are full speed ahead on paying off this cabin mortgage, and should be able to do so when our oldest daughter begins college. We will have two nice, paid-for properties, while still in our mid-40s. Although my wife and I will likely never be considered super-wealthy, I understand how families in this country amass generational wealth.

We still face many challenges, even with this firm foundation. Our little guy will be 5 when our oldest daughter graduates from high school. We could easily be helping with grandchildren while our youngest is still living at home.

I want to continue teaching at our children’s school. When our son graduates, I’ll be 59. Then I’ll have the option to call it a teaching career, but we will make that decision when the time comes.

We are very concerned about inflation. We believe in real estate – it says “real” right in the name!

While saving for our children’s college and paying off our cabin mortgage, I continue to purchase physical silver whenever I can, adding to assets of gold and palladium that I purchased years ago before their spot prices doubled.

Accumulating wealth is one item, but we must constantly protect the buying power of that wealth from inflation.


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DENNIS: In our last interview you discussed friends with McMansions, lots of nice things, but were heavily in debt. Are you seeing any changes; do you see more of your peers starting to work their way out of debt and saving?

JAMES: No. Unfortunately, just the opposite. Not only do peers continue to hold debt, but much of it is credit cards, with astronomically high-interest rates. The most consistent thought process I see in these couples is a focus on monthly expenses rather than the big picture.

Debt BurdenWe have friends with little home equity, who took advantage of the lower interest rates to buy a McMansion. Their down payment was so low they had to pay Private Mortgage Insurance (PMI). Not only did they increase the amount of their debt, they added debt obligations that will take them into their late 60s.

“Trying to be happy by accumulating possessions is like trying to satisfy hunger by taping sandwiches all over your body.”

— Unknown

In the meantime, they enjoy expensive vacations, jet skis, motorcycles, lots of cool stuff. They don’t worry as long as they can make the payments each month.

In essence, they are “holding serve” each month, paying a ton in interest, and not building any real wealth; with little to fall back on if there is an emergency.

DENNIS: The survey indicated Social Security might be all many Xers have, if they can retire at all. What do you see as the solution?

JAMES: It starts with a mindset, realizing retirement is OUR responsibility. You mentioned a “financial epiphany.” Completing a retirement planning worksheet is a good place to start. The longer you wait to get serious, your debt hole is bigger and time frame shorter before retirement.

I’d recommend three things:

  • Get rid of high-interest-rate debt as quickly as you can, cut up the credit cards if you have to.
  • Second, max out your 401k, and learn to live on the rest.
  • And finally, the mortgage. With our first mortgage, we quickly realized over 2/3rds of our payment went to interest – rent for other people’s money. It would take forever to pay things off at that rate, so we started paying more on the principle.

Had we paid the mortgage off as scheduled, the total interest added 72% to the cost of buying the home. Add another 1% PMI and it doubles the price of the house.

I remember how excited we were when we got the mortgage balance down where the majority of the payment went to principal, not interest.

30-year mortgages make bankers rich and keep debtors poor!

Uncle Dennis, I hope that more in my generation- especially older Gen Xers, can appreciate what they stand to lose before it is too late.

DENNIS: Thank you again.

JAMES: My pleasure.

Dennis here. My grandfather preached about the evils of debt. Regardless of generation, paying off endless debt is the major start in wealth accumulation for retirement.

I’ve redefined the term debt slave. “Having to work to pay down debts, preventing you from truly accumulating wealth.”

It’s hard to retire when you are on the debt treadmill. Each generation has to go through the tough learning process on their own.

A little help means a lot!

Eight years ago, I vowed to keep our newsletter FREE! I plan to keep my promise.

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On The Lighter Side

Hawaii beach woman making Hawaiian shaka hand sign wearing lei of flowers. Hawaii, USA.When Jo and I were married, we went on a two-week honeymoon to Hawaii, one of the most beautiful places in the world. While we enjoyed Honolulu, we also rented a condo in Lahaina; a wonderful town. It was so alive and just full of color. The people were warm and friendly and we felt the island was magical.

Today the news reports are full of stories and photos of a devastating fire in Maui that destroyed the entire town; homes and businesses burned down to the slab. The photos remind me of the old black and white pictures of cities that were destroyed in WWII – just nothing but charred junk.

While the island exports some products, it relies heavily on tourism to survive. I hope they can rebuild quickly, bigger and better.

Our hearts and prayers go out to all that are dealing with the mess. Very, very sad….

Quote of the Week…

Woman looking at the sky with rainbow“If I were asked to give what I consider the single most useful bit of advice for all humanity, it would be this: Expect trouble as an inevitable part of life and, when it comes, hold your head high, look it squarely in the eye and say, ‘I will be bigger than you. You cannot defeat me’.” — Ann Landers

And Finally…

Friend Tom G. shares some clever signs for our enjoyment:

  • A Tire Shop: “Invite us to your next blowout.”
  • A Car Dealership: “The best way to get back on your feet – miss a car payment.”
  • At the Electric Company: “We would be delighted if you send in your payment on time. However, if you don’t, YOU will be de-lighted.”
  • At a gynecologist’s Office: “Dr. Jones, at your cervix.”
  • At an Optometrist’s Office:“If you don’t see what you’re looking for, you’ve come to the right place”
  • A Propane Filling Station: “Thank Heaven for little grills.”

And my favorite:

  • On the back of a Septic Tank Truck: “Caution – This Truck is full of Political Promises”

Until next time…

Dennis Miller

“Economic independence is the foundation of the only sort of freedom worth a damn.” – H. L. Mencken


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