The ‘Forgotten Generation’ Faces a Retirement Crisis—Here’s the Way Forward

The oldest members of Generation X—the generation born in the years 1965 to 1980—turn 60 this year, which is only a few years away from retirement. But many Gen Xers aren’t sure what retirement will look like, or even whether it’s possible.

A survey by Western & Southern Financial Group found that more than half of Gen X respondents (52%) were unsure of their ability to retire comfortably—the highest of any American generation.

But while retirement is around the corner for the “forgotten generation,” it’s not here yet. That means there’s still time to plan for a comfortable retirement, even in an uncertain economy.

Gen X Faces a Retirement Crunch: Here’s Where Their Savings Stand

Members of Gen X have faced economic uncertainty for much of their working lives. First there was the dot-com bubble at the start of their prime working years. Then came the 2008 Great Recession during what should have been their peak earning time. And now, as they begin to near retirement, they’re facing stubborn inflation.

These challenges are reflected in their retirement savings. A 2023 study found that the typical household led by a Gen Xer has only $40,000 saved for retirement. This is far lower than $1.18 million, which is what Gen Xers say they need to have saved, on average, to retire comfortably.

The ‘Sandwich Generation’

Generation X is also impacted by the “sandwich” effect. That is, while many still have children who need significant financial support, they’re also caring for their aging parents, who are living longer than previous generations. One study found that nearly a quarter of adults who provide for at least one child under age 18 also care for a parent over age 65. (Gen Xers frequently support their children over age 18, too.)

Many members of Gen X report that their time, mental health, and personal finances are strained by these competing caregiving responsibilities. This can further limit their ability to plan and save for retirement. Caregivers in this “sandwich” were twice as likely to report that they experienced financial difficulty as those who only had to care for an aging parent.

5 Ways Gen X Can Better Prepare for Retirement

Given all those factors, is it still possible for Gen X to plan for retirement?

“It’s never too late (or too early) to start planning,” says Alexa Kane, CFP, CDFA, a financial planner at Pearl Planning in Dexter, Michigan. “Everyone starts somewhere, and getting the ball rolling is key.”

Here are five ways Gen Xers can prepare for retirement.

1. Catch-Up Contributions

“For Gen X, it’s important to be aware of contribution limits and catch-up opportunities on various retirement accounts,” Kane says. She also recommends automating these contributions so they seamlessly come out of your paycheck or checking account each month.

If you’re age 50 or older, the Internal Revenue Service (IRS) allows you to make extra contributions to your retirement account beyond the usual annual limits. These are known as catch-up contributions.

In 2025, anyone 50 or older can contribute an additional $7,500 to a 401(k), 403(b), 457, or Thrift Savings Plan, on top of the $23,500 annual limit. That’s a total of $31,000 in tax-advantaged savings. The oldest members of Gen X have an even higher catch-up contribution limit. Those ages 60 to 63 can contribute $11,250 instead, bringing their total annual contribution limit to $34,750.

If you have an individual retirement account (IRA), you can make additional contributions there, as well. The annual limit for IRAs is $7,000, plus an additional $1,000 for those age 50 or older. That’s a total of $8,000 that many members of Gen X can contribute to their IRAs this year.

2. Focus on Debt Reduction

A 2024 study published by the FINRA Investor Education Foundation found that Gen X has some of the highest rates of consumer debt, with 39% carrying a credit card balance (more than any other generation), 33% having an auto loan (equal to Millennials but higher than other generations), and 26% having medical debt (second only to Millennials).

Entering into retirement while carrying this level of debt could weigh down many members of Gen X, eating away at their retirement savings once they’re living on a fixed income. A $500-a-month auto loan, for example, means $6,000 less each year to live on in retirement.

To create more financial flexibility and reduce the stress that carrying debt can create, focus on debt reduction while you’re still working and have a larger monthly income. If you need to, consider working an extra year or two before retiring with a focus on debt repayment. You can also use strategies such as:

• The snowball or avalanche method to pay off high-interest debt, like credit cards
• Reducing monthly expenses, such as downsizing to one car instead of two, and putting the savings toward debt repayment
• A debt consolidation loan to simplify your monthly payments
• Debt settlement and relief options

3. Side Hustle Now Instead of Later

Almost half (42%) of Gen X expect to fund their retirement with a side hustle. But if you have the time, starting a side hustle now might be an even better idea. Bringing in extra income now could help you fund those catch-up contributions. Or, if you are carrying debt as you approach retirement, you could use your side hustle income to make sure it’s paid off before you’re living on a fixed income.

Ideally, a side hustle would be something you already have the skill set to do and that doesn’t require a huge time commitment. Below are some ideas, and you should consider how tools like ChatGPT could help you make money too:

• Tutoring or coaching
• Freelance writing, editing, or design services
• Gardening, cleaning, or home organization
• Babysitting, pet sitting, or house sitting
• Dog walking
• Handicrafts such as scrapbooking or knitting
• Furniture flipping

4. Fund an HSA

Health care expenses rise as we age, and you are probably underestimating how much you will need to spend on medical expenses in retirement. Fidelity’s Retiree Health Care Cost Estimate, which was released in 2024, found that the average American estimated that health care would cost them about $75,000 in retirement. The actual costs, however, were closer to $165,000 per person for those retiring at age 65.

To save for medical costs in retirement, look into opening a health savings account (HSA) now. These tax-advantaged accounts let you set aside pretax income from your paycheck as long as you are enrolled in a high-deductible health plan (HDHP). In 2025, you can contribute up to $4,150 if the plan covers only yourself or $8,300 if your plan covers your family. This money never expires, even if you change health plans or jobs.

You could use it to pay for your health care now. But if you want to create a cushion for retirement, you can also invest your HSA and allow it to grow. Once you retire, any withdrawals from your HSA are tax-free as long as you use them for qualified medical, dental, or vision expenses.

5. Consider Real Estate

If you want to diversify your retirement planning, investing in real estate now can provide a hedge against inflation in retirement. That’s because real estate values and rents tend to rise over time, especially in response to inflation. If inflation increases as you approach retirement, the value of your real estate will as well.

There are a few different ways you can invest in real estate, depending on how much money you have available and how hands-on you want to be.

Even if real estate investing isn’t for you, it’s important to think of ways to diversify your retirement savings. If you aren’t sure how to do this, talk to a financial advisor.

“Every situation is unique,” Kane says. “I think the most important thing is finding a plan that you are comfortable with for the long term and sticking to it.”

The Bottom Line

Though Gen X is approaching retirement age, they’re not quite there yet. This means there’s still time to shore up retirement savings, eliminate debt, plan for healthcare expenses, and diversify investments.

“Retirement should be a time to enjoy the life you worked hard for,” says Kane. “Having a thoughtful, flexible plan can make that a reality.”