Retirement reckoning: How can Gen Xers catch up?

The oldest members of Gen X are inching closer to retirement age. But there's a major problem for a generation once labeled slackers: Many of them haven't saved enough to make it a reality. The typical Gen X household has squirreled away only $40,000 for retirement, according to a 2023 National Institute on Retirement Security (NIRS) report. 

Gen X faces a perfect storm of financial pressures. From paying off credit card balances to being part of the "sandwich generation" covering care for aging parents and grown kids, their money is being pulled in every direction. Carewell reports that more than 70% of middle-aged Americans now care for both generations, leaving little room to catch up on savings or believe they'll ever stop working. 

Another hard-to-overlook fact? Gen X entered the workforce just as companies were transitioning to 401(k) plans rather than traditional pensions to support their employees in retirement. Most early 401(k) programs typically lacked now-common features such as auto-enrollment or target-date funds, which improve retirement investment outcomes, says NIRS report co-author Tyler Bond. 

And let's not forget another gut punch: Many Gen Xers were in their peak earning years when the Great Recession (2007 to 2009) forced many to adapt. Some lost a job with a 401(k) plan, watched in despair as the value of their 401(k)s dwindled, or realized they needed to cut back on retirement savings to cover other everyday living costs.

"It basically took about a decade just for them to get back to their pre-recession net-worth levels," Tyler says. "So that's a lost decade for them where they weren't building additional net worth." 

To top it off, lifespans are increasing. According to estimates from the Institute for Health Metrics and Evaluation, the average life expectancy in the United States is projected to reach nearly 80 years by 2035. Translation: Gen X needs bigger nest eggs, because their retirements are shaping up to last longer than their parents' ever did. 

Needless to say, all of this is daunting. But don't panic. There are steps to take that could close Gen X's retirement savings gap and set them up for a successful and relaxing post-career life. Here's some money moves to start with:

It's not uncommon for Gen Xers to have held myriad jobs throughout their career—and those people likely have old retirement accounts funded with multiple former employers. Older accounts, in particular, might not have had the same investment offerings as today's 401(k)s, with many simply defaulting participants into a money market fund or a play-it-safe investment portfolio.

"I think workers generally, and Gen X workers, too, should make sure they know what they're actually invested in, and make sure that they're actually growing their savings and not just putting money aside and missing out on any potential growth," Tyler says.

So take action: Find all your retirement accounts, scrutinize the investments, and consider consolidating them for easier management—and greater returns.

Work with a financial advisor or use a retirement calculator to estimate how much you'll need to retire—and whether you're on track to meet that target. If your estimates reveal a shortfall, you can review different saving rates and retirement ages to pursue investing alternatives that help you catch up. Retirement might feel like it's around the corner, but having a firm grasp on savings and investment goals is the first step toward rebuilding your nest egg.

When you close the curtains on your career, you don't need to spend all your time in a rocking chair. Taking on a part-time role or short-term gigs can help you stay on track with your financial goals. Whether it's working 25 hours a week at a business near your home or jumping in to provide virtual consulting help from the comfort of your dining room, some part-time roles still provide valuable benefits like health insurance and access to retirement accounts. Any work during retirement can keep your brain sharp through engagement and mental stimulation—all of which can help ensure you stay on top of your retirement plans.

Another bonus of working during retirement? It can help you hold off on claiming Social Security benefits. Every year that you wait to access your earnings from age 62 to 70, your monthly check will increase by about 8%, according to the Social Security Administration.

One benefit of getting older is the ability to stash even more money in your tax-deferred retirement accounts. These catch-up contributions are a great opportunity to help you narrow your retirement savings gap. According to the IRS, in 2026 workers age 50 or older can add an additional $8,000 in retirement contributions to their 401(k)s and an extra $1,100 to an IRA. And those who are 60 to 63 have an even higher 401(k) catch-up contribution limit: $11,250.

Yes, there's a retirement reckoning for Gen X—and it's no surprise that many are feeling the pressure to get things back on track. To turn dread into confidence, you can stare down reality by talking things through with family and friends and leaning into advice from financial experts to chart a smart path forward to a comfortable retirement.