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Can Gen X retire? With traditional sources of income in doubt, this group can redefine the future of retirement.

We need a sustainable retirement planning model that takes us into the future

Almost half of all working Gen Xers say they will now retire later than they anticipated, and 40% plan to work part-time through retirement.


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For decades, many American workers could plan on roughly 40% of their retirement needs being covered by Social Security with another 60% covered by traditional pensions and savings. But people approaching retirement today face a different reality.

Traditional pensions have declined significantly since 1985, and Social Security trust fund reserves could be depleted by 2033, making the idea of benefit increases, even for middle class folks who have worked hard all their lives, highly unlikely. This means that Generation X — people between 43 and 58 and thus the cohort next in line to retire — and all future generations will need to plan differently for their retirements.

As future retirees confront a landscape with less support from traditional pensions and increased reliance on defined-contribution plans like 401(k)s and 403(b)s, the combination of inflation, capital markets volatility and outdated approaches to financial planning only make things harder. If we don’t act, retirement security could become nothing more than a “pipe dream” for many.

However, having weathered the 2007-09 recession and the economic impacts of the pandemic, Gen X is resilient, self-motivated and resourceful. I’m proud to be part of this generation myself. We have the opportunity to lead the way in redefining what the future of retirement looks like in America.

We have work to do

According to a recent Prudential study, nearly half (46%) of Gen X — up to 30 million people — do not think they will have enough saved to live comfortably in retirement. And 58% of Gen X members — roughly 40 million Americans — say they will rely on their Social Security benefit as a main source of income in retirement, even though Social Security was never intended to cover more than about 40% of a person’s income needs later in life.

More: 80% of Gen Xers think they’ll never fully retire

What does all this mean for Gen X’s retirement future? Almost half (47%) of all working Gen X will now retire later than they anticipated, and 40% plan to work part-time through retirement. Gen X could also be the first generation to break down the Great Wealth Transfer — only 12% say an inheritance will be a source of retirement income, and a large majority (84%) does not plan to leave an inheritance to their children.

Only 16% of GenXers plan to use their home value to help fund retirement, with many planning to retire in place rather than “snowbird” to warmer climates.

As Gen X ushers in a new retirement paradigm, the responsibility is on all of us — businesses, policy makers, individuals and the financial industry — to create a sustainable retirement planning model that takes us into the future.

It all starts with a plan

Gen X, and all generations, need to think more comprehensively and creatively about retirement planning. Human guidance should work hand-in-hand with technology to provide faster, data-driven and personalized support tailored to individual circumstances and changing external realities.

For those who prefer in-person interaction, sitting down with a local financial professional is a great first step. Together, you can create a vision for retirement and your own desired outcomes.

Determine what percentage of your fixed expenses may be covered by Social Security or other defined benefits, then identify options for making up any gaps and having enough left over for discretionary expenses like travel, visiting family and new passion projects.

If you are more comfortable with digital tools, a variety of online options — including my firm’s Stages for Retirement resource — exist to help get people started. When using such tools, it is important to remember that their income and spending estimates are only as good as the information and assumptions you enter into them.

Related: Reality bites for Gen X retirement savers. Expectations are out of step with savings.

Save smarter

Next, the industry needs to introduce smarter and more holistic solutions into today’s defined contribution-based system — ones that help people make smarter decisions as they save for retirement. We must educate tomorrow’s retirees about resources that can make it easier and less intimidating to save.

For example, the Secure Act and Secure Act 2.0 Act are recent landmark bipartisan pieces of legislation with common-sense solutions to help Americans bolster their retirement security, including automatic 401(k) enrollment and annual increases, delays in required minimum distributions, increases to catch-up contribution limits and more.

Employers and the financial industry must work together to make these types of critical solutions easier to access, including through more digestible information and clear road maps, so individuals know how and when to capitalize on these benefits to meet retirement goals.

Related: Generation X can still retire — here’s how

Protect tomorrow’s outcomes

Lastly, we must find ways to incorporate the best practices and features of traditional pensions, including risk mitigation and lifetime income planning, to protect the retirement outcomes of tomorrow. These strategies are critical to help Gen Xers avoid the damage that market volatility, longer lifespans and other potential hazards can inflict on otherwise well-balanced financial plans.

We need fundamentally innovative retirement strategies that will pick up where Social Security leaves off and create new, predictable income streams that will last as long as we live.

My colleague David Blanchett, who conducts research and analysis for PGIM DC Solutions, a unit of Prudential’s global asset-management business, notes that products with a protected lifetime income benefit offer a promising piece to the puzzle relative to traditional income annuities. That is because they offer potential upside investment growth as well as a measure of downside risk protection against unpredictable external factors like market volatility and longevity risk.

Strategies also need the flexibility to account for different and changing lifestyle preferences: delayed retirements, part-time work and aging in place. Defined-contribution plans, interest-bearing personal savings products like money-market funds, investment vehicles and protection strategies can all play key roles in building a nest egg capable of generating sustainable lifetime income to meet these desired outcomes.

Also read: Social Security could have been saved — is it too late to undo the damage?

Gen X is in the middle of a retirement revolution. If we meet these changing realities proactively and head-on, we can transform the future of retirement from a potential problem into an area of significant opportunity and expand access to retirement security for millions.

DylanTyson is president of Prudential Retirement Strategies, which delivers retirement strategies to more than 2 million customers and provides retirement income of more than $12 billion annually. Tyson received his bachelor’s degree with high honors from Stanford University and an MBA from the Anderson School at UCLA. He is a CFA Charterholder. 

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