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Personal Finance retirement


5 GEN XERS SHARE WHAT IT’S REALLY LIKE TO PLAN FOR RETIREMENT: ‘MY GENERATION IS
GOING TO HAVE A HARDER TIME THAN BOOMERS’


THE OLDEST GEN XERS ARE APPROACHING RETIREMENT. ARE THEY READY?

BY
Alicia Adamczyk
January 21, 2024 9:00 AM EST

The oldest Gen Xers, born in 1965, are just a few years away from traditional
retirement age. But many don’t feel nearly ready enough for that next chapter.
Fortune received hundreds of emails from Gen Xers who say they are worried about
what the future holds in store for them and their retirement readiness.

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The oldest Gen Xers, born in 1965, are just a few years away from traditional
retirement age. But many don’t feel nearly ready enough for that next chapter.
Fortune received hundreds of emails from Gen Xers who say they are worried about
what the future holds in store for them and their retirement readiness.



“I’ve followed my dreams, as my generation was told to do, but found that some
dreams cost more to follow than others,” writes one Gen Xer. “My savings are
virtually nonexistent.”



“I’ll likely die before I can retire. Fun stuff,” writes another.

Gen X has the largest wealth gap of any generation, or the difference between
the amount they believe they’ll need to retire comfortably and how much they
actually have socked away, according to the Schroders 2023 U.S. Retirement
Survey. Over 60% of non-retired Gen Xers are not confident in their ability to
achieve a dream retirement, compared to 49% of millennials and 53% of baby
boomers. The typical Gen X household has $40,000 in retirement savings,
according to a recent study from the National Institute on Retirement Security,
far from the $1-million-plus that financial experts suggest.



There are myriad reasons for this, including two market crashes, 9/11, and other
economic headwinds Gen X has experienced during their years in the workforce.
And of course not every Gen Xer feels this way; many of those who emailed
Fortune said they are more than prepared for a comfortable retirement.



“I am fully retired and did so at age 56 and two months,” writes one Gen Xer
born in 1965. “I do consider myself a bit of unicorn with my circumstances.”

But one big reason for potential retirement struggles is the dissipation of
pensions over Gen X’s time in the workforce (401(k)s, which put the onus on
employees to save for their retirement rather than employers, came into
existence at the end of 1978, just before Gen X began). They also carry more
student loan debt than baby boomers (and balances for those who have it are
often higher than that of millennials, thanks to years of compounding interest)
and, broadly speaking, pay more for health care.

“They are the first generation to rely on 401(k) plans instead of pensions and
the next in line to retire,” said Deb Boyden, head of U.S. defined contribution
at Schroders. “The stakes are higher for Generation X and the margin for error
is lower.”



“There is a lesson to be learned from our generation,” says Don, a 50-year-old
living in Denver. “We assumed we’d be treated the same as our parents, but now
we’re reaching that stage, and, nope.”

Here’s how five Gen Xers are thinking about and planning for retirement.


‘I’VE ALWAYS HAD MORE THAN ONE JOB’

Tiffanie Young, 46.
Courtesy of Tiffanie Young

Name: Tiffanie Young
Age: 46
Location: Astoria, Ore.



Tiffanie Young first learned of the power of compound interest when she was 20
years old and starting her career in respiratory therapy. A mentor mentioned
that if she starting saving even small amounts of money every week at her age,
she could amass $1 million by the time she retired.

“I was like, wow, that’s pretty cool,” Young tells Fortune. From then on, she
contributed to her employer’s 403(b)—a tax-advantaged retirement account similar
to a 401(k) offered by public schools and nonprofits—incrementally increasing it
each year. Aside from cashing out part of it to buy a house in 2007, she’s
consistently saved for the past two-and-a-half decades.

Young had her first child at 17, while still in high school. But she was
determined to get a good job to provide for him and attended a two-year program
at a community college for respiratory therapy. She’s been in the same
profession for the past 25 years. Now she and her husband have five children
between them, all grown and out of the house.



Over the years, Young has padded her savings and paid for things like family
vacations by picking up shifts every week with a health care agency. “I’ve
always had more than one job,” she says. When she first joined the agency, it
still offered a pension; Young continues to pick up the occasional shift,
despite moving around two hours away from the area it serves, so that she can
access that pension in retirement.

Young has had a few financial guardian angels over the years. She almost quit
the agency gig a few years ago, but an older worker told her to hang on to the
job until she was sure she was vested, in order to receive the pension. That,
the coworker said, can be the “difference between eating steak and dog food” in
retirement.

“That stuck in my brain. I was like, I don’t want to eat dog food,” she says.
“It’s a unique thing. I don’t want to let it go.”



Young’s husband, who is 50, owns his own business, giving guided fishing tours.
She says they feel about 70% ready to retire. But stock market fluctuations
worry her, and she and her husband have been investing more in precious metals
to diversify their nest egg. Her ideal retirement would be to drop to part-time
work and join her husband’s business.

“It does worry me a little bit, but we’ve made some investments in the past year
and a half that we feel are very good investments in the business,” she says.
“We feel we will have more assets to sell off to contribute to retirement.”


‘MY GENERATION IS GOING TO HAVE A HARDER TIME THAN BOOMERS’

Don, 50, does not think he will retire.

Name: Don
Age: 50
Location: Denver



Retirement isn’t in the picture for Don, a 50-year-old living in Denver. Don,
who asked that his last name be withheld to talk freely about his finances,
works as a maintenance facilities technician at a marijuana dispensary, earning
around $50,000 per year.

Don grew up low income in the area and, having lost much of his retirement
savings during the Great Recession, doesn’t trust investing in the stock market.
When he does manage to save, “something always comes up,” he says: One of his
cats needs to go to the vet, or something in his home has to be fixed. He
recently had to have back surgery, which put him out of work for three months
and dwindled his savings.

“My generation is going to have a harder time than boomers. Boomers, they had
pensions,” Don tells Fortune. But “all you can do when you get knocked off your
feet is get back up and dust off.”



One bit of luck: Don bought a three-bedroom house in the middle of Denver 10
years ago for under $100,000. His mortgage is $950 per month, and he plans to
stay there forever.

Don says his original plan had been to buy one or two more properties to rent
out. But once housing prices skyrocketed—his own home is worth about four times
what he paid for it—that plan dissipated. Don bought his home when he was
earning $14 per hour; that just isn’t possible anymore. He gets calls and mail
daily from flippers who want to buy his home, but he wouldn’t be able to afford
anything else, he says.

“The only reason I can live here in Denver is because of the timing when I
bought my house,” he says. “I love my home. I feel so lucky and so blessed to
live here right now.”



Don loves working with his hands and finds fulfillment in his work. He can fix
just about anything, he says, which comes in handy as a homeowner.

“Yeah, I’m poor, but there’s a certain happiness in being poor,” he says. “Even
if I won’t retire ever, I’ve been in this lifestyle long enough that, hey, at
least I know what I’m doing.”


‘WE ARE ON TRACK TO BE FINANCIALLY INDEPENDENT AT 55’

Fred and his wife are on track to retire by 55.

Name: Fred
Age: 45
Location: Cape Cod, Mass.



Fred bought his first home in the U.S. in 2009 after working for a few years in
Cape Cod as an electrical engineer. Having attended college in France, where he
was born, he had no student loan debt and focused on paying off his mortgage for
the next few years while simultaneously saving for his retirement.

Paying off the house turned out to be a prudent move. When he married his wife
in 2013, she had over $100,000 in student loan debt (she is a mental health
therapist). In order to pay down her debt quickly, they put one of the spare
rooms in the house on Airbnb. It also gave him the capital he needed to buy a
new house in a tough market right before the COVID-19 pandemic hit and housing
prices skyrocketed. With a 2.7% mortgage interest rate, Fred and his wife aren’t
planning to pay this house off anytime soon.

Fred, who asked that his last name be withheld to freely discuss his finances,
will have a few different income sources when he retires. His work offered a
pension when he started, before switching to a 403(b), so he will receive money
from that. He and his wife now max out their retirement accounts each year and
will also have Social Security payments. And Fred will also receive a pension
from the French government (similar to the U.S. Social Security), as he has
continued to pay into the system even while living in the U.S.



“We are on track to be financially independent at 55,” Fred tells Fortune. “We
are buying our independence.”

If all goes to plan and Fred can cut his hours at age 55, he says he and his
wife have discussed moving to France until their Social Security and Medicare
benefits kick in in the U.S. It’s much cheaper to live there (particularly
health insurance), he says, and they could travel more easily around Europe. His
goal, he says, is to leave a nest egg for his two kids while “living freely and
comfortably.”

As a high earner who’s good with numbers, Fred says the retirement system in the
U.S. works well for him. But he is constantly running projections and reading
articles, he says, constantly making plans for 20 years from now. He’s lucky, he
says, that he found a job he loves that also happens to pay a good salary. He
and his wife also try to live simply (he drives a 2007 Prius) and focus on their
health—they enjoy hiking together—to ensure they can live a comfortable life in
retirement.



“For us, it works better. But it’s not equitable,” he says. “I would have no
problem cutting my retirement if it was contributed to a more equitable system.”


‘WE ASSUME WE’LL PROBABLY WORK UNTIL WE DIE’

An idyllic retirement may seem out of reach for some Gen Xers. Marie Keyte is
not pictured.
Blend Images/Rick Gomez

Name: Marie Keyte
Age: 48
Location: Statesboro, Ga.

After living in South Florida since her kids—now 16 and 18—were young, Marie
Keyte moved to Georgia two years ago when her husband found a new job. The
couple were more than ready for a new pace and more affordable cost of living.
After her husband lost his job a few years ago, they decided it was the perfect
time to follow through on their plans of leaving.



So far it’s been a great change; her husband earns more, and everything,
including their rental house, costs noticeably less. Keyte has worked as a
bookkeeper for her entire career (though she is currently on leave to write a
book), and her husband works in construction.

Still, Keyte says retirement isn’t in the cards, at least not with their current
finances. She’s been contributing to a 401(k) since she was 23, but says it’s
still not enough. “We assume we’ll probably work until we die,” she says.

In her ideal retirement, they’d retire around age 70 and move into a small cabin
nearby and volunteer. She’s still holding out some hope.



“It’s still far down the line, another 20 years of work,” she says. “You don’t
know. Things could change.”


‘I FEEL LIKE WE’RE DOING RELATIVELY BETTER THAN OUR PEERS‘

Michelle Milkowski and her husband, Shawn Allen.
Courtesy of Michelle Milkowski

Name: Michelle Milkowski
Age: 43
Location: Renton, Wash.

Though she earned her undergraduate degree in music, Michelle Milkowski decided
on a more traditional career as a health insurer, working her way up over the
years to be a sales manager.



When she started her career, Milkowski’s parents assured her she’d have a
pension to rely on for her retirement savings. It took them a while, she says,
to understand that the benefits landscape looked much different for their
daughter’s generation than it did for them. She starting contributing $50 per
paycheck to her 403(b) when she started working, and has incrementally increased
that over the years as she has earned more. Milkowski recalls not knowing much
about saving or investing when she started her career; in her twentiess, she
bought Kiplinger’s and other financial magazines to learn the basics.

Milkowski and her husband, a teacher at a private school, own their home in
Renton, near Seattle, and were able to refinance to a 2.375% mortgage interest
rate. “I will never be selling this house,” she says. She notes that the past
few years have taught her anything is possible; it’s hard to know what to
prepare for. Things are going well now, she says, but that can change in an
instant.

“I think retirement is possible,” says Milkowski. “I feel like we’re doing
relatively better than our peers in how much we’re saving, but I cannot find
really accurate data anywhere to understand where we are.”



Working in insurance has made Milkowski acutely aware of just how quickly things
can change. She says retirement reform “needs to happen in this country” to help
those who aren’t able to save through no fault of their own.

“Growing up you are taught, be responsible, get a job, work hard, and then
you’ll have your nest egg and everything will be fine,” she says. “But I found
out people get disabled, people have strokes…If a parent has to step out of the
workforce for any reason, good luck to that family.”

Some years, Milkowski is able to max out her retirement accounts; other years,
the family faces challenges and she needs to pull back her investments. But she
feels pretty good about their current financial situation.

“I’m going to do the very best I can, but I cannot worry myself about that at a
certain point,” she says.



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