Caught wrong-footed, most Gen Xers now feel uneasy on retirement

Retirement has arrived faster than many Gen X investors expected, and advisors are feeling the strain of helping them make up ground in a compressed time frame.

According to a new Advisor Authority study from the Nationwide Retirement Institute, 61% of non-retired Gen Xers – who fell between ages of 45 and 60 years old, based on the methodology – said they did not see retirement as an urgent priority until they were at least 50, treating it instead as a distant goal. Another 26% said they will not consider it a serious priority until age 60 or later.

That tracks with a recent CFP Board survey of Gen X Americans, where 33% shared regrets over not saving for retirement earlier.

Once the reality hit, many moved quickly to course-correct. Four in ten Gen X investors polled by Nationwide reported cutting discretionary spending, 34% increased retirement plan contributions, 23% sought professional advice and 19% shifted into lower-risk investments.

Even with that, the confidence gap has proven hard to bridge, with 25% worrying their savings will not last more than 14 years in retirement, and 12% saying their nest egg is already shrinking.

Advisors are mirroring those concerns. Nationwide found that 39% of financial professionals view insufficient retirement income as one of the biggest obstacles facing their Gen X clients, alongside thin emergency savings and rising health care and insurance costs.

“For Gen Xers, the clock is ticking. Retirement is no longer a distant milestone, but an event that’s right around the corner,” said Suzanne Ricklin, vice president of Nationwide retention and sales, noting that many in this cohort have been juggling college costs, elder care and market volatility.

Macro pressures are further complicating the picture. Sixteen percent of non-retired Gen Xers now expect to push back their planned retirement date. Another 12% plan to work part-time in retirement, and 15% are unsure they will ever fully retire. A quarter believe they would have to return to work within a year if they retired now because of inadequate savings, while 43% expect to keep working in some capacity out of financial necessity.

Inflation and policy risk loom large: 56% think inflation will rise over the next year, up from 39% six months ago, and 48% believe Social Security and Medicare will be cut in the federal budget, up from 34%.

Tellingly, 89% of Gen Xers in the survey agreed the soaring cost of living is making it harder to retire comfortably. And while Social Security benefits do get adjusted based on inflation, research by the Senior Citizens League found 94% of seniors today agree that the newest 2.8% COLA set for next year isn't enough to keep up with rising costs – a potential sign of things to come.

Among the Gen Xers Nationwide surveyed, half said the events of the last year have made them more inclined to allocate part of their portfolio to annuities or other guaranteed income solutions.

Gen X investors are also reacting to what they see around them. Thirty-seven percent said watching peers or family struggle in retirement pushed them to act, while 38% cited economic and market volatility. Nearly three in ten said a financial planning session or advice from an advisor was the key trigger to reprioritize retirement.

Advisors, including RIAs, are tailoring their playbooks accordingly. Nationwide reported that 43% are increasing the frequency and flexibility of their communication with Gen X clients, and 32% are introducing or expanding annuity use as part of income strategies.

“As Gen X investors approach retirement, working with a trusted financial advisor becomes more critical than ever,” Ricklin said, adding that a “calm, professional perspective can help cut through the noise” and keep plans on track.