As the oldest members of Gen X reached age 60 in 2025, many organizations are realizing the unique financial and emotional challenges this generation faces.
Gen X employees (born between 1965 and 1980) are no strangers to economic uncertainty, having weathered the dot-com bubble, the Great Recession, and a pandemic. Often referred to as the “sandwich generation,” many of them are caring for aging parents and raising children. They are also the first generation to rely more on self-funded 401(k) plans than employer-funded pensions.
Amid these financial challenges, your organization can play a critical role in preparing Gen X employees for a more secure retirement.
The Retirement Readiness Gap
As they enter the final stretch of their careers, many Gen X employees feel unprepared for retirement. Some fear they will never retire. Surveys highlight Gen X’s financial challenges and concerns:
- According to industry news source BenefitsPRO, only 34% of Gen X employees feel secure with their retirement plans.
- The National Institute on Retirement Security reports that the majority of Gen Xers fall short of their retirement savings goals. Only 55% participate in an employer-sponsored retirement plan. A typical Gen X household has as little as $40,000 in retirement savings in private accounts.
- Many Gen X employees report needing more than $1 million for a comfortable retirement. Others believe the figure exceeds $2 million. However, total rewards company WorldatWork reports that the average Gen X retirement account balance is $10,000. This means that half have less than $10,000 in retirement savings. 40% have no money saved for retirement.
- Data from financial technology company SmartAsset shows that only 14% of Gen Xers are confident they have sufficient retirement savings. Nearly 55% are concerned about outliving their wealth.
These statistics demonstrate the need to take significant action. Without adequate retirement savings or planning, many Gen X employees face significant obstacles to their security.
The good news is that many Gen X employees are between 5 and 20 years away from traditional retirement age. These years offer a window of opportunity. As an employer, you are in a position to support your Gen X workforce through your benefits offerings and retirement resources.
Five Ways to Support Gen X Employees
Employee benefits can play a critical role in helping Gen X employees improve their retirement security. Consider implementing or examining the following strategies:
- Optimize your retirement plan design
- Provide personalized retirement education and communications.
- Promote financial wellness programs.
- Encourage emergency savings accounts.
- Offer flexible work schedules.
Optimize your retirement plan design
Your retirement plan design can encourage Gen X employees to save more and more wisely.
Automatic enrollment helps employees start saving immediately after joining your organization. Auto-escalation features can ensure that contribution rates increase over time.
Catch-up contributions allow older employees to save beyond the standard limits. In 2025, employees age 50 and older will be able to contribute an additional $7,500 to their retirement plan. The SECURE 2.0 Act allows employees between the ages of 60 and 63 to make a larger catch-up contribution of $11,250.
Offering or increasing employer matching contributions can incentivize employees to save more for retirement.
Providing access to vetted investment advice can help employees select options that fit their risk tolerance and financial goals. Industry news source BenefitsPRO reports that managed accounts are a powerful resource. With this type of account, financial professionals help employees incorporate their expected retirement age, individual needs and circumstances, and other customized factors.
Easy-to-use tools can make it easier to access and understand. Make it easy for employees to enroll in their retirement plan, manage their accounts, and find retirement planning resources online.
Provide personalized retirement education and communications
Personalized guidance can make a significant difference in Gen X’s retirement readiness. Tailored education fosters financial literacy and retirement confidence.
Retirement income calculators and estimation tools can show employees how their current savings compare to their retirement goals.
Financial workshops, online resources, and retirement check-ins can educate employees about savings and investment strategies, inflation, and stock market cycles.
Connecting employees with financial advisors allows them to develop customized solutions based on their unique needs and circumstances.
WorldatWork recommends offering visualization tools that encourage Gen X employees to visualize detailed retirement scenarios. It can be as simple as writing out a typical day in retirement or creating a retirement wish list. This step connects immediate savings with long-term goals, motivating employees to achieve them.
Promote Financial Wellness Programs
A holistic approach to financial wellness enables Gen X employees to address both immediate and long-term needs. Financial wellness programs that strengthen immediate financial health improve employees’ ability to save and plan for retirement. Consider programs that include:
- Education on topics such as budgeting, student loans, and debt management
- Resources for child and elder care
- Guidance on Social Security and Medicare
- Tax-specific strategies for retirement income
- Financial advice on required minimum distributions and retirement decumulation strategies
Offerings like these can address current Gen X challenges and pave the way for sustainable retirement planning.
Encourage Emergency Savings Accounts
Financial emergencies, such as unexpected car repairs and medical bills, can negatively impact retirement savings. According to 401(k) Specialist magazine, 75% of employees live paycheck to paycheck. Nearly 40% couldn’t cover an unexpected expense over $400. And more than 20% don’t have emergency savings.
Emergency savings accounts can help employees keep their savings under control. The SECURE 2.0 Act allows pension-linked emergency savings accounts (PLESAs) to be linked to employees’ defined-contribution retirement plans.
Employees fund PLESAs through after-tax payroll deductions. The accounts are capped at $2,500. This amount is enough to cover many unexpected expenses, yet small enough not to drastically affect take-home pay while employees build their emergency savings. Employees can borrow from these accounts monthly without incurring tax penalties for early withdrawal or depleting their retirement savings.
Helping Gen X employees build emergency savings and avoid negative impacts on their retirement savings can increase their financial stability.
Offer Flexible Work Schedules
Flexible work options can help Gen X employees improve their financial situation during the transition to retirement. Some examples include:
- Reduced hours or part-time positions
- Remote and hybrid work opportunities
- Consulting or project-based assignments
These arrangements benefit both employees and employers. They allow Gen X employees to work and save longer before retirement. They also create opportunities for older employees to share institutional knowledge and advise colleagues as they transition to the next stage of their lives.
Additional Insights
Gen X employees face significant obstacles, but your organization can play a vital role in preparing them for retirement. To explore how your benefits offerings can support your Gen X employees, speak with your insurance broker or benefits advisor. They can collaborate with you to review your retirement plan design, implement educational programs, and identify additional resources to boost financial well-being.
