Mortgage News - Gen X Faces Retirement Readiness Challenges

Gen X Faces Retirement Readiness Challenges

Mortgage News June 23, 2023

A recent survey by Prudential Financial revealed that more than 33% of individuals belonging to Generation X, born between 1965 and 1980, have less than $10,000 in their retirement savings. Additionally, this cohort is experiencing a lack of inheritance from their baby boomer parents. Additionally, approximately 46% of Gen X, equivalent to around 30 million people, are worried that their retirement savings won’t be sufficient to maintain their desired lifestyle. This concern stems from the overall lack of savings among Gen X.

Among the Gen X population, about 35% have less than $10,000 saved for retirement, while 18% have no retirement savings at all, accounting for approximately 12 million people. Moreover, 47% of those surveyed anticipate having to work longer than planned to manage their finances, and about 40% plan to work part-time after leaving their full-time job or career.

Interestingly, only 16% of Generation X respondents intend to utilize their home equity as a means of funding their retirement. According to Rob Falzon, Prudential’s vice chair, the challenges that Gen X retirees will encounter may arise from disruptions in retirement planning. These challenges include a decline in defined-benefit pensions, an excessive reliance on Social Security despite its financial instability, and a lack of retirement savings plans, with inflation further hindering savings goals.

The study also reveals that Gen X workers are concerned about job security. Currently, the reverse mortgage industry primarily caters to baby boomers, who form the largest demographic. However, with the qualifying age for proprietary products lowered to 55 in some states, Generation X now has an early entrance into this space.

Similar to baby boomers, Gen X prefers to age in their own homes. However, unlike baby boomers, they may be less inclined to consider home equity as a source of retirement funding, as indicated by the Prudential survey. Although Gen X is not currently the primary target for reverse mortgage lenders, some have expressed an interest in appealing to this cohort in the future.

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Gen X Faces Retirement Readiness Challenges

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