Published on Mar 10, 2026 • Updated on Sep 2, 2026
This article was written by Adem Tumerkan
Content Editor, Dunham | 2025 ThinkAdvisor Luminary Award Winner | 2026 Wealthies Finalist — Thought Leader of the Year | Macroeconomics, markets, geopolitics & global trends
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Gen X is saving more for retirement, but many clients are approaching the point where market losses can do the most damage. As they move from accumulation to retirement withdrawals, early declines can threaten portfolio longevity through sequence-of-returns risk. Advisors should revisit asset allocation, withdrawal plans, and client behavior before volatility forces you to.
If you read my recent piece on the Gen X retirement crisis, you already know the numbers (but if you didn’t – here it is).
Median savings of just $40,000. A $1.52 million gap between what Gen X has vs. what they need. A generation that waited too long to take advantage of retirement savings.
But here's the update - and it's a complicated one.
Gen X is finally saving. Aggressively.
For instance - according to Fidelity's Q3 2024 retirement analysis1 - Gen X IRA contributions surged 35% year-over-year. By Q4, the average Gen X IRA contribution was up another 16%, with total IRA accounts growing 11%.
So yes. While there’s still a significant gap between the median savings and what’s needed for retirement, at least they’re trying to catch up now.
The bad news? They may be piling in at exactly the worst time.
The oldest Gen Xers turned 60 in 2025. And by 2027, the first wave will be able to pull from Social Security (62). Then, by 2030, millions will be at - or past - traditional retirement age (65).
That means the generation that just spent two to three years aggressively pouring money into markets is getting closer to pulling it back out.
Or said another way, they're flipping from accumulation to decumulation.
And that flip - right now, at this moment in markets - is where the real risk may be lurking.
Now, I'm not saying markets are about to implode. But conditions continue to move towards a bigger potential drawdown (the higher something goes, the bigger the fall, right?).
And for Gen X clients nearing retirement, a meaningful drawdown could be a retirement-ending event.
Here’s what I mean.
Just as markets are hovering around all-time highs, we’ve seen:
None of this means sell everything. But it does mean this is not exactly a great entry point for a generation simultaneously saving into markets and preparing to withdraw from them within five to ten years.
That combination - late-stage accumulation meeting higher market risk - is the type of setup that makes the sequence of returns risk so dangerous.
We’ve written to you before about sequence risk – but here's the concept to explain clearly to every Gen X client you have.
Sequence risk is the danger of experiencing bad market returns early in retirement - right when withdrawals begin.
Two clients. Both retire with $500,000. Both average 6% annually over 20 years. But one experiences a 30% drawdown in year one. The other doesn't hit a major downturn until year fifteen.
Same average return. But completely different outcomes.
The first client is withdrawing money to pay bills at the exact moment their portfolio is dropping. Every dollar pulled out during a downturn is a dollar that never gets to recover. The portfolio bleeds from both ends - falling markets and ongoing withdrawals - thus making a comeback nearly impossible.
The second client had years of compounding growth before the storm hit. Their nest egg was large enough to absorb it.
Gen X lived through the dot-com crash, 2008, and COVID during their working years. They had time to recover. But in retirement - they won't.
And here's the ironic part.
According to Allianz Life's 2025 Q3 survey3, just 19% of Gen Xers think it's a good time to invest right now - yet 54% fear another market crash is coming.
Put simply, they feel the risk. But they just don't know what to do about it.
Left to their own instincts under stress, people mostly do exactly the wrong thing - panic sell at lows. And buy at market highs.
This dynamic creates the advisory opportunity.
Your Gen X clients are finally engaged. But engagement without structure is just anxiety with a budget.
Three things matter most right now:
This is where DunhamDC becomes directly relevant.
The process is very simple.
It’s rules-based. No emotion. No guesswork. And captures the full greed-fear cycle (which has plagued markets since the beginning and will always continue to).
Keep in mind that no strategy eliminates risk (be wary of anyone who says so). But for a generation entering retirement into one of the most uncertain macro environments in recent memory while markets hover around record highs, having a system specifically designed for the biggest risk they face can be a meaningful edge.
Gen X is finally showing up. Saving and investing more. Engaging more. Taking retirement seriously for the first time.
But they’re doing it all at a time when prices are high, geopolitics unstable, and macro risks mounting.
Thus, the clients who come out of this transition intact won't just be the ones who saved the most. They'll be the ones with a plan that accounted for what happens when markets don't cooperate at the exact moment retirement begins.
That's the conversation.
And there's no better time to have it than right now. . .
What is sequence-of-returns risk for Gen X retirees? Sequence-of-returns risk is the danger that poor market returns early in retirement, combined with regular withdrawals, reduce a portfolio faster than expected. For Gen X clients approaching retirement, a major drawdown can be especially harmful because they may have limited time before their savings must begin supporting retirement income.
Why can two Gen X retirees with the same average return have different retirement outcomes? The order of returns matters when a client is withdrawing from a portfolio. A retiree who experiences losses early may need to sell more investments at depressed prices to fund spending, leaving fewer assets available to recover later. Another retiree with the same average return but stronger early performance may have a larger portfolio when a later downturn occurs.
What is the retirement risk zone? The retirement risk zone is the period surrounding retirement, when a market decline can have an outsized effect on a client’s long-term income plan. Losses in the final working years can reduce retirement savings shortly before withdrawals begin. Losses after retirement can be harder to recover from because the client may already be selling assets to meet living expenses. The term has no single fixed definition, but it often refers to the years immediately before and after retirement.
How can financial advisors help Gen X clients manage sequence-of-returns risk? Financial advisors can help Gen X clients manage sequence risk by reviewing asset allocation before retirement, creating a written withdrawal plan, maintaining liquidity for near-term spending needs, and stress-testing the portfolio against poor early-return scenarios. A disciplined investment process and flexible spending plan may also help clients avoid selling long-term investments after a market decline. Sequence risk cannot be eliminated, but planning can help clients make more informed decisions during volatile markets.
The investment strategy of DunhamDC is powered by the DC algorithm, focusing on the principles of price and time. Utilizing trigger points, the algorithm systematically identifies market sentiment, selling into strength during periods of euphoria and greed, while capitalizing on opportunities during times of pessimism and fear. This allows DunhamDC to adapt dynamically to changing market conditions.
DunhamDC is NOT A GUARANTEE against market loss or decline in the value of the account or a timing strategy. Investors may lose money. Asset allocation models are subject to general market risk and risks related to economic conditions. The chart represents the trade signals when the equity allocation increased (green arrows) or decreased (red arrows) over the period shown.
This communication is general in nature and provided for educational and informational purposes only. It should not be considered or relied upon as legal, tax or investment advice or an investment recommendation. Any investment products or services named herein are for illustrative purposes only, and should not be considered an offer to buy or sell, or an investment recommendation for, any specific security, strategy or investment product or service. Always consult a qualified professional or your own independent financial professional for personalized advice or investment recommendations tailored to your specific goals, individual situation, and risk tolerance.
Investors should consider the investment objectives, risk factors, charges, and expenses of the Dunham Funds carefully before investing. This and other important information is contained in the Fund's summary prospectus and/or prospectus, which may be obtained by calling (800) 442-4358. Please read prospectus materials carefully before investing or sending money. Investing involves risk, including possible loss of principal.
Past performance may not be indicative of future results.
No investment strategy or risk management technique can guarantee returns or eliminate risk in any market environment. There may be economic times where all investments are unfavorable and depreciate in value.
*DunhamDC has a limited track record, with an inception date of November 30, 2022. This reflects the inception date of investor(s) owning the primary model DunhamDC 60. No funds have been invested in other variances of DunhamDC until the dates specified. Dunham DC 80, 40, and 20 began on January 9, 2024, January 24, 2024, and January 30, 2024 respectively.
DunhamDC US has a limited track record, with an inception date of July 31, 2024.
For more information on Dunham DC, please visit https://www.dunham.com/dunhamdc
