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Will Generation X be ready for retirement?

Despite hurdles, there is hope.

It’s probably fair to say that most of us are concerned about retirement. It doesn’t matter how successful we’ve been, or how much money we’ve set aside, there are just too many unknowns ahead—health care, Social Security, inflation, taxes—to have 100% confidence in our financial future.

According to the Pew Charitable Trust, however, there’s one demographic group that may be more concerned than all the others. In their report, “Retirement Security Across Generations” Pew Researchers measured the impact the Great Recession had on various generations, and determined that members of Generation X—people born between 1966 and 1975—were the least likely to maintain their quality of life in retirement.

The good news is there’s still plenty of time for Gen Xers to overcome their retirement challenges. Even if you are among the oldest members of your generation, you still have 15-20 working years ahead of you. But before we provide some solutions, let’s take a look at the depth of the problem.

As the chart below indicates, Pew Researchers looked at the ability of each generation to replace their pre-retirement income and found that Gen-Xers are coming up short. While many financial experts recommend a replacement rate of 75-80%, the report indicates that Gen-Xers will have enough retirement assets—including Social Security benefits—to replace just 50-58% of their current salaries and income.1

Timing is everything.

1“Retirement Security Across Generations,” The PEW Charitable Trust, May 16, 2013, Figure 11.