Retirement worries pile up for “sandwiched” Generation X

The generation wedged between Baby Boomers and Millennials has a few financial worries on their plate, ahead of the first of them turning 60 in 2025.

Generation Xers are increasingly gloomy about retirement, worrying about running out of money, having to work longer and soaring government debt.

A new global report by Natixis Investment Managers and CoreData Research says the generation sandwiched between Baby Boomers and Millennials is about to turn 60, and half say they won’t have enough money to enjoy their retirement.

Three out of five say inflation is killing their dreams of retirement and more than three quarters worry that increasing public debt will reduce their government retirement benefits.

“The question of how much will be enough lingers for some, as one in five – 19 per cent – think that even if they saved $1 million, they still couldn’t afford to retire,” the Generation X report says.

Generation X turns 60 next year, and many are not happy about money. Picture: iStock.

It spans almost 30,000 people surveyed globally over five years and says on average Gen X – born between 1965 and 1980 – plans to retire at 60, but almost 30 per cent fear they will be forced to return to work after retiring.

“Knowing they may come up short on funding, 60 per cent of Generation X accept they may have to work longer,” the report says.

Natixis Investment Managers country head for Australia & New Zealand Louise Watson said several developments had increased Gen Xers’ concerns, “including high, sticky inflation, mounting public debt, global geopolitical uncertainty and domestic issues like the housing and cost-of-living crises”.

“These have made retirement a daunting prospect for many Australians in this cohort,” she said.

“As the Sandwich Generation, Gen Xers are in caught in-between raising their own children while simultaneously supporting their ageing parents.”

Ms Watson said it was never too late to act to address retirement worries.

“There are many things that Gen Xers can do, from increasing superannuation contributions to paying down or consolidating debt and ensuring their superannuation or other savings are invested in the best way for their personal circumstances and life stage,” she said.

Goldsborough Financial Services director Brenton Miegel, a Generation Xer, said the age group would be the first to retire with a full career of compulsory employer superannuation payments.

“There’s going to be a considerable bucket of superannuation that they are going to retire with,” he said.

Louise Watson, Natixis Investment Managers country head Australia and New Zealand.

“The intergenerational wealth transfer that’s going to happen over the next 20 years will probably set up Gen Xers more than they may expect at the moment, particularly with regard to property prices.

The current gloom might reflect their upbringing and that many were heading towards retirement still with big mortgages, Mr Miegel said.

“If I reflect on my growing up in the 70s and 80s, our folks didn’t have a lot in the scheme of things,” he said.

“We have grown up with quite frugal parents and some of that has translated into being quite frugal adults.”

The Natixis report says 61 per cent of Generation X believe they will be secure in retirement “but that sense of security is fleeting at best”. It says 31 per cent believe they will never save enough to retire.

More than one-in-five worry about being able to leave an inheritance, although many are first in line to benefit from about $3.5 trillion to be transferred from Baby Boomer parents.

“While many Gen Xers will have an idea they will inherit … for many people it’s likely to be unclear exactly how much they will inherit,” Ms Watson said.

“These are difficult conversations we have to have, though. For many people inheritance is the single largest lump sum they will ever receive.”

Originally published as Retirement worries pile up for “sandwiched” Generation X