Gen X, too, faces dire retirement funding prospects

I have written frequently about the dire state of retirement funding facing America’s Baby Boomers, but the crisis is hardly limited to that generation. It’s now becoming clear that Generation X faces similarly challenging circumstances as well.

Abby Ellin, blogging for ABC News, recently examined the results of a cross-generational study on retirement funding by the Pew Charitable Trust from the standpoint of Gen X (roughly speaking, those born between 1966 and 1975), which:

. . . found that Gen Xers – the group of Americans following the baby boomers that range in age from 38 to 47 – fared especially poorly during the recent economic down swing. As a result, their retirement years will likely be more tarnished than golden.

The study . . . found that between 2007 and 2010, Gen Xers — which the report defined as those born between 1966 and 1975 — lost nearly half of their overall net worth, an average of about $33,000, and also had higher levels of debt than previous generations.

In addition, notes Ellin, Gen Xers are carrying heavy student loan and credit card debts that add to their financial burdens.

The retirement funding crisis

How much more evidence do we need for leaders in all sectors — government, business, and non-profits — to declare that America is facing a full-blown crisis in retirement funding that will become monstrously, painfully evident during the coming decades?

While our leaders in Washington D.C. bicker and tinker over numbers at the margins concerning Social Security (which, by the way, is a lot more stable a program than some of its critics try to argue), the larger problem goes largely neglected:

1. Traditional pension programs are going the way of the dinosaur, and many existing pension plans — especially in the public sector — have been mismanaged to the point where they may not be able to pay out promised benefits.

2. Social Security was never designed to provide full retirement funding.

3. 401(k) accounts took a beating during the worst of the current meltdown.

4. Many people don’t have 401(k)s anyway.

As a result, millions are advancing toward their later years with insufficient savings and resources to fund a relatively secure and comfortable retirement. The Boomers will be the first to feel this very real pain, and it now appears that Gen Xers will be right behind them.

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