Gen X's Retirement Reckoning: A $400,000 Savings Gap Looms Large

NEW YORK, NY – December 16, 2025 – Generation X, the cohort of Americans nestled between the Baby Boomers and Millennials, is facing a stark financial reality as retirement approaches. A new study reveals this generation is on track for a staggering retirement savings shortfall of over $400,000, raising alarms about their financial security and the effectiveness of the modern retirement system they were the first to fully embrace.

According to the Schroders 2025 US Retirement Survey, Americans aged 45 to 60 believe they will need approximately $1.12 million for a comfortable retirement. However, they expect to have only $711,771 saved on average—a daunting gap of $404,976. This shortfall is the largest of any generation surveyed, and a mere 16% of Gen Xers feel they have saved enough to retire comfortably.

The 'Forgotten Generation's' Financial Precipice

The financial anxiety plaguing Gen X is not an isolated finding. While the Schroders survey highlights a significant gap based on average savings, other data suggests the situation is even more precarious for the typical household. Reports from the National Institute on Retirement Security (NIRS) found that the median Gen X household has only $40,000 in retirement savings, indicating that the higher average figures are skewed by a small number of wealthy savers. Similarly, the 25th Annual Transamerica Retirement Survey reported a median savings of just $107,000 for this generation.

These figures paint a grim picture for a generation often dubbed the “sandwich generation,” as many juggle the financial pressures of raising children while also caring for aging parents. This strain is reflected in their confidence levels, with the Schroders study finding that 61% of Gen Xers are not confident they will achieve their dream retirement, and 53% worry about outliving their assets.

In contrast, the retirement gap for other generations, while substantial, is smaller. Non-retired Baby Boomers face a shortfall of $356,684, and Millennials are looking at a $353,721 deficit. The unique vulnerability of Gen X stems from a pivotal shift in the American retirement landscape.

Caught in a Systemic Shift: The 401(k) Guinea Pigs

Generation X's retirement struggle is deeply rooted in timing. They were the first generation to enter the workforce en masse as the traditional pension system began to vanish, replaced by a new, unproven model: the 401(k) defined contribution plan.

“While many Baby Boomers have defined benefit pension plans that provide a set income for life, Gen Xers entered the workforce as pensions were being replaced by defined contribution plans and before key features like auto-enroll and auto-escalate became common,” said Deb Boyden, Head of US Defined Contribution at Schroders. This shift placed the burden of saving and investing squarely on the shoulders of individuals, many of whom were unprepared for the responsibility.

Early 401(k) plans lacked the sophisticated, automated features that now help younger workers save consistently. Without automatic enrollment, many Gen Xers missed out on years of crucial early savings and compound growth. Their prime earning years were also bookended by major market shocks, including the dot-com bust in the early 2000s and the Great Recession of 2008, which decimated portfolios and shook investor confidence.

A Vicious Cycle of Debt and Delay

Systemic challenges have been compounded by a widespread lack of financial planning. The Schroders survey reveals that more than half of Gen X (53%) report having done no retirement planning at all, and only 26% work with a financial advisor. This inertia is creating a dangerous blind spot as retirement nears.

Financial pressures from daily life often take precedence. The survey found that Gen Xers were the most likely to have borrowed from their workplace retirement plans, with 24% doing so. The top reasons cited were paying for unforeseen emergencies (29%), reducing credit card debt (23%), and keeping up with the rising cost of living (18%). Research from the Pew Research Center has previously shown that Gen X carries a higher debt load than any previous generation at the same stage of life, further constraining their ability to save.

This combination of high debt, competing financial priorities, and a hands-off approach to planning is a recipe for anxiety and under-preparation. “Approaching retirement without a plan or professional advice is a huge mistake,” Boyden added. “Given the number of unknown factors involved, retirement can seem impossible to plan for, but there’s no question that those who take the time to determine how much income they’ll need... will be far closer to achieving their dream retirement.”

Closing the Gap: A Race Against Time

Despite the sobering statistics, experts emphasize that the situation is not hopeless. With the oldest members of Generation X still about a decade from the traditional retirement age, there remains a critical window to take corrective action.

“The oldest Gen Xers are roughly 10 years from full retirement age, and that provides a window for them to cut this savings gap and explore solutions that can improve their transition from asset accumulation to asset decumulation,” Boyden noted. This transition—from saving money to strategically spending it down—is a complex phase where professional guidance is invaluable.

Financial experts recommend a multi-pronged approach. First is aggressively increasing savings rates, taking full advantage of catch-up contributions allowed in 401(k) and IRA accounts for those over 50. Many also suggest re-evaluating investment allocations, as some Gen Xers may be invested too conservatively to achieve the growth needed to close their savings gap. Extending one's working life, even by a few years, can dramatically increase total savings, allow investments more time to grow, and maximize future Social Security benefits.

Ultimately, the most critical step is to move from passive worry to active planning. This involves creating a detailed budget for retirement, understanding future income sources, and developing a coherent investment and withdrawal strategy. For a generation that has spent its life defined by independence, seeking professional financial advice may be the single most important step toward securing a comfortable and dignified retirement.