Gen Xers aren't ready for retirement: Prudential

A new report shows members of Generation X significantly tempering their retirement expectations — and for good reason.

According to the recently released “Gen X: Retirement Revised” study from Prudential Financial, up to 30 million (46%) Gen Xers (those Americans born between 1965 and 1980) don't think they will have enough money socked away to live comfortably in their golden years. The study shows their anxieties are justified, revealing that roughly 35% of them have less than $10,000 saved, and 18% have no nest egg at all.

As a result of their lack of savings, almost half (47%) of all working Gen Xers expect to retire later than anticipated, and 40% plan to work part-time after retirement, the survey said.

“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, said in a statement.

Despite their low to nonexistent retirement balances, the study said only 16% of Gen Xers plan to use their home value to help fund retirement, marking a substantial difference from the baby boomers before them, who are tapping into home equity at record levels. Nor do Gen Xers plan to move south; approximately two-thirds (65%) say they plan to stay in one city or town in retirement.

And as for that Great Wealth Transfer, according to the study, a mere 12% of Gen Xers say an inheritance will be a source of retirement income for them, even as boomers are expected to pass down more than $70 trillion.

Jared P. Remesz, wealth advisor at SageView Advisory Group, said the Secure Act 2.0 will benefit Gen Xers if they are serious about improving their retirement savings and security.

“The key benefits expanded access to retirement savings plans, increased contribution limits, improved catch-up contributions, opened the door for 529 to Roth IRA Conversions, and provided incentives for small businesses to offer retirement plans," Remesz said. "By increasing the required minimum distribution age from 72 to 75 (or 73), our clients have additional years to defer taxes and more time to consider Roth conversions to help alleviate the potential tax and Medicare headaches resulting from RMDs.”

Elsewhere, the study showed 58% of Gen X say they will rely on Social Security as a source of retirement income despite recent worries about the government program's funding. And while an economic downturn still ranks as the biggest threat to job security among working Gen Xers (35%), fears of being replaced by younger (29%) and less expensive (26%) workers are close behind, according to the Prudential report.