Published on Jan 29, 2026 • Updated on Jul 27, 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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The spotlight often shines on Baby Boomers as they retire in record numbers - with around 11,000 turning 65 every day over the next few years.
But another generation is quietly facing its own challenges as they approach retirement.
I’m talking about Generation X (“Gen X”).
Born between 1965 and 1980, Gen X earned the name “Latchkey Kids” as they grew up in a time when both parents were working (not just dad), divorce rates climbed, and inflation was soaring. Thus, they learned to fend for themselves early, growing independent by necessity.
And this is a sizable group. As of 2023, Gen X accounts for 19.9% of the U.S. population -around 65.2 million people1.
Figure 1: Statisa, Dunham January 2025
Meanwhile, the oldest Gen Xers turn 60 this year, meaning they can begin penalty-free withdrawals from retirement accounts. By 2027, at age 62, they’ll qualify for Social Security benefits.
But the data reveals they face some serious headwinds – such as:
Adding to these hurdles are fears of Social Security cuts and rising living costs. Together, these issues make Gen X one of the least confident generations when it comes to retirement.
Thus, it’s not a stretch to say that Gen X is staring down tough retirement challenges.
Here’s what they’re up against.
Gen X was the first generation to approach retirement without the safety net of traditional pensions.
See, before the 1980s, defined benefit pensions were the norm. Retirees received guaranteed incomes based on salary and years of service, while employers carried the financial risk, essentially funding their employees’ retirements. But with the rise of 401(k) plans in the late 1970s, this responsibility changed2. Workers now had to save more of their own money, with employers contributing only a small percentage.
And while this shift from pensions to 401(k)s gave workers a bit more control over their savings (and saved businesses money), it left them exposed to market swings and the risk of under-saving - marking a major change in retirement planning since the 1980s.
This greatly increased the sequence risk problem retirees face.
But the early days of 401(k)s were awkward, to say the least. Plans were bare-bones, and many companies didn’t offer them. They lacked basic features like automatic enrollment, savings escalation, and target-date funds. Gen Xers didn’t have access to these tools for years, losing out on valuable time to build wealth.
Adding to this challenge is increased market volatility since the 1980s. Thus, while 401(k) balances have grown alongside rising stock and property values, many Gen Xers remain pessimistic about their retirements, burdened by the risks and uncertainty this system has created.
The numbers paint a bleak picture for Gen X:
Worse, more than half (54%) of Gen Xers fear they’ll outlive their savings - higher than Boomers (40%) and Millennials (50%).
The result of this savings gap? Retirement will get pushed back as we’ve seen over the last several decades.
For instance, today, nearly 20% of Americans over 65 are still working. That’s almost double what it was 35 years ago. And Gen X is likely to follow this trend - working longer and retiring later.
But more worrisome is that Gen Xers may face social security cuts.
Just 10% of Gen Xers plan to wait until age 70 to claim Social Security, the age that would maximize payouts. Furthermore, 43% plan to claim these benefits early - fearing the program will run out of money - higher than 24% of Boomers and 37% of Millennials.
And who can blame them?
In May 2024, the Social Security Trustees5 Report showed that without legislative action, benefits could be reduced to 79% of scheduled amounts by 2033.
This would mean retirees would only get 79 cents on the dollar.
While it’s likely social security will be patched over, the long term structural issues within the system will require significant changes to stop the bleeding. And as it becomes more of a political issue, anxiety should keep rising.
Maybe it’s in their “Latchkey” upbringing, but Gen Xers grew up valuing independence and self-reliance. And this mindset often keeps them from seeking financial help.
For example:
To complicate matters further, nearly 25% of 55-year-olds are counting on financial support from their children - mostly Millennials and Gen Z. But here’s the kicker - many haven’t even had this conversation with their families yet, likely due to the discomfort it brings.
Thus, with many daunting issues plaguing Gen X, they may need to finally admit they need help. They shouldn’t fret as it’s not too late to turn the tide. But the clock is ticking.
Advisors can play a crucial role in bridging the gap between where Gen Xers are and where they need to be. Key areas of focus include:
Opportunity: Create tailored strategies to maximize savings, including catch-up contributions, retirement account consolidation, and investment plans aligned with each client’s time horizon.
Why: With many Gen Xers approaching retirement with limited savings, advisors can help identify shortfalls, prioritize action steps, and build a more realistic path toward retirement readiness.
Opportunity: Help clients tackle mortgages, student loans, credit card debt, and financial obligations tied to children or aging parents.
Why: Many Gen Xers are “sandwiched” between supporting children and caring for aging parents, which can limit retirement contributions and delay long-term planning.
Opportunity: Provide advice on phased retirement, encore careers, delayed retirement, and balancing work, income, and lifestyle goals.
Why: Many Gen Xers expect to work longer due to financial necessity, and they may need help turning a delayed retirement into a coordinated income and planning strategy.
Opportunity: Help clients compare the tradeoffs of claiming Social Security early, at full retirement age, or delaying benefits.
Why: Many Gen Xers fear future Social Security cuts and may be tempted to claim early. Advisors can help clients understand how timing decisions may affect lifetime income.
Opportunity: Stress-test retirement income plans against early market losses and build withdrawal strategies that account for volatility.
Why: As Gen X moves closer to retirement, poor market returns early in the withdrawal phase could have an outsized impact on portfolio longevity.
Opportunity: Help clients turn savings into a coordinated income strategy that may include portfolio withdrawals, Social Security, pensions, cash reserves, and other income sources.
Why: Accumulating assets is different from drawing income. Many Gen Xers may need guidance on how to convert retirement savings into sustainable monthly income.
Time is running out for Gen X to close their retirement gaps, reshape their financial stories, and get help over going it alone. Advisors, educators, and policymakers have a unique chance to help this generation rewrite their future.
Retirement isn’t just about survival - it’s about thriving. And the time to act is now.
Why is Gen X so unprepared for retirement?
Gen X entered the workforce during the shift from pensions to 401(k)s, received little employer guidance early on, and now faces high debt, inflation, and weak savings habits.
How much has Gen X saved for retirement on average?
The median Gen X retirement balance is about $40,000, and nearly 40% have saved nothing, leaving a major gap as they approach retirement age.
Why does Gen X fear Social Security cuts?
Trustee reports suggest benefits may drop to 79% by 2033 without reform. This uncertainty is pushing many Gen Xers to claim benefits earlier than optimal.
How are long-term market risks affecting Gen X?
Sequence risk, rising volatility, and the burden of self-directed 401(k)s leave Gen X especially vulnerable to poor market returns early in retirement.
What can financial advisors do to help Gen X catch up?
Advisors can guide debt reduction, maximize catch-up contributions, improve Social Security strategies, and build structured retirement income plans.
Are Gen Xers working longer?
Yes. Many expect to work past 65 due to insufficient savings. Nearly 20% of Americans over 65 still work — a trend Gen X is likely to extend.
How does Gen X’s debt impact their retirement outlook?
High mortgages, student loans (often for children), and credit card balances drain disposable income and limit retirement contributions.
Why doesn’t Gen X seek financial advice?
Gen X is the “Latchkey Generation,” valuing independence and self-reliance — traits that often delay or prevent them from seeking professional guidance.
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, or as a substitute for legal or tax counsel. 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. All examples are hypothetical and are for illustrative purposes only.
Information contained in the materials included is believed to be from reliable sources, but no representations or guarantees are made as to the accuracy or completeness of information. This document is provided for information purposes only and should not be considered as investment advice.
Dunham & Associates Investment Counsel, Inc. is a Registered Investment Adviser and Broker/Dealer. Member FINRA/SIPC. Advisory services and securities offered through Dunham & Associates Investment Counsel, Inc.
