hi friends the Gen X topic has received a lot of focus lately the reason is that that generation is starting to retire and there are some things that are coming out that a lot of them didn’t realize this CashNews.co discusses what’s been hiding in plain sight and a lot of it
actually just came out in a report called The Forgotten generation it’s one that details a lot of the stuff that gen xers are starting to experience the report was written by the National Institute of retirement security and if you’re interested in reading it stick around to the end and
I’ll tell you how to get it let’s start off with a question that question is who’s responsible for the Financial Security of a retiree well in this day and age the answer is obviously the retiree but if you went back in time 20 30 40 years in time the previous generation the
boomer generation had access to something that Gen X does not have and that is a defined payment plan defin pension plan that wasn’t always the case of course but if you worked for a big company like GM or Ford or one of the other big manufacturing companies of the day one of the draws to
have someone work there was that you offered them a generous pension plan and Lifetime Health benefits of course if you ran your own business or you were a server at the local Diner well they didn’t generally offer defined benefit plans but the belief at the time for these Blue Chip companies
was that the employer was best suited to take care of the financial well-being of the employee during their work life and in retirement completely different than what you’re experiencing today and by the way pension plans were themselves relatively new and employers weren’t too worried
about being able to cover these costs because first of all the Markets were going up second of all longevity was somewhat limited postretirement and the third thing was that if the numbers
didn’t work they just simply raised the expected return and for whatever reason many of the actuaries back in the day were okay with this of course we all know how the story ends many companies went bankrupt because of this this was one of the reasons one of the many reasons of course but one
of the reasons the GM went bankrupt but here’s the problem what was expected to be the solution to companies going bankrupt was the 401K plan that came about in 1978 and by 1981 1 401ks started to become part of the corporate landscape in terms of benefits by the year 2000 34s of all pension
plans or retirement plans anyway were 401K plans most of those people that were on the old style pension plan at the company were grandfathered in they got to keep their pension the new employees coming into the workforce had to go with the new 401k and guess who the Next Generation coming online
was that was Gen X these were people that were born between 1965 and 1980 and they started working between 1985 and 2000 at the height of the conversion to the 401K they were the first generation to have to make a decision about whether they were going to participate in this new plan or not and
their model was their parents frankly who had a defined benefit plan so their parents didn’t pay into a pension plan why should they there are still segments of the country that participate in a defined benefit plan by the way they’re usually government or some form of Public Service
like a teacher a police officer or military but the vast vast majority of people now are 401K participants if they participate at all the reason I give you this context is because there are a lot of people you see in the comments section here on YouTube who are quite aggressive to individuals that
didn’t save enough for retirement John do should have known better and now he’s in a bad situation so he’s on his own that may be true in fact it is true they are responsible for taking care of themselves despite the fact that they didn’t have the perfect model to emulate
but if you look at the Next Generation they were a generation or they are a generation of people that are saving more are they perfect absolutely not but if you told John do or Jane do if you gave them the information then that they have today and gave them 25 years of growth on their retirement
Savings a lot of that problem would go away but unfortunately we can’t go back in time so what do the numbers look like for Gen X approaching retirement well for a lot of them a very large portion of them the numbers are devastating as you can imagine given the information
that we just talked about only 14% of Gen X is covered by a defined benefit plan that means that 86 6% is covered by a 401k type of plan if they’re covered at all if you look at the averages of Gen X the average Gen X has $130,000 in their 401k plan now that sounds like a lot of money but it
isn’t and it’s actually quite misleading here’s why if you took a group of 10 people and you said I want to know how much each of you has in your 401k and one person has 1 .3 million and nine people have zero the average is $130,000 and N9 out of 10 of them have zero so while the
average is 130,000 the median the point exactly in the middle is zero and 90% of the population will have no money in retirement despite the fact that the average is $130,000 now this is a example but let’s talk about the real numbers because the data is directionally correct in the real
numbers if you take take the population of Gen X as a whole the mean is still $130,000 now if you look at the data on everything from Health Care to costs and retirement no one can really live on $130,000 but putting that aside for a second the median the point right in the middle of that entire
population is $10,000 and 40% of that population has zero save for retirement now the big question here is do they know that they’re behind well the answer is it’s complicated yes they do but no they don’t if you look at the data in this report 86% of men and 87% of women know
that they’re less than half of where they should be at this point in their lives yet despite this acknowledgement many experienc what’s called The Dun and krugger effect which is a psychological effect that basically means that while they know the information they don’t know the
information they think that they’re going to catch up and they won’t really discover that they can’t catch up until the very end and just for completeness if you look at this data for individuals who are married married men have $25,000 as their median number and married women
have about $115,000 so more than the $110,000 median number for the entire population but certainly nowhere near where they need to be and divorced men $216 and divorced women $1,480 do you get the point now that’s retirement Savings but when you factor in Net
Worth which includes things like your home it doesn’t look much better if you look at older gen xers those that were at the beginning of the cycle so those born in 1965 to 1970 when the global financial crisis hit also called the Great Recession in 20 9 they had a Net
Worth of $80,000 that immediately dropped to $40,000 within a year or two and it wasn’t until 2020 or 2021 that that same group much older now had a Net Worth of $80,000 again the younger end of the spectrum those that were born between 1975 and 1980 saw their
Net Worth go from 15,000 down to 12,000 during the global financial crisis but it has three X since then they’re up to 45,000 on average still not a lot for retirement but certainly much better when your point in time funds go from 15,000 to 45,000 then when they go from
80,000 to 880,000 now what does this mean well it means that a very large portion of Gen X is going to be reliant on Social Security Now despite all of its shortcomings Social Security is quite a wonderful thing it’s index to Inflation it’s it’s backed by the full
faith of the federal government and it provides Income for a lifetime but it’s designed to be a safety net not to put an individual in the lap of luxury when they go into retirement to live well someone needs substantial Savings and
Investments in addition to Social Security or Pension Plan like we talked about before and of course there’s the risk and it’s a big risk that there will be adjustments made to Social Security that affect Generation X now I’m not suggesting that there won’t
be Social Security or that it will be depleted and they’ll have to rely on a much smaller number however what I am suggesting is that it’s possible that a certain segment of Gen X will have to change the way that they receive Social Security now let me take you back in time to 1983 and
explain exactly what I’m talking about in 1983 the Social Security trust was months away from running out of funds it was very much at the tail end of what we’re all worried about today now despite all the noise about what could happen in 2035 let’s call it there are really only
one or two things that the government needs to do one is to raise the Social Security tax by 1% frankly that would probably do it or the other is to raise full retirement age from 67 to 68 and that’s exactly what happened in 1983 they did both at the time lawmakers raised full retirement age
from 66 to 67 but they grandfathered anyone who was age 30 and above at that point in time because it would be too devastating on them to plan for that extra year so if you were in your 20s or earlier then you saw your full retirement age gradually move up to 67 it depended on when the year you
were born but 67 was the ultimate stopping point so if you’re Gen X you’re probably asking what does this mean for me well the one thing that’s probable is that any tweaks around the benefits probably won’t apply to you any negative tweaks anyway simply because if you use
the past as the model those issues will be pushed down to the 20-some year olds not the 40-some year olds the other side though is that if they do raise the tax on Social Security even 1% and you’re still working that probably will apply to you but the overall thrust of the CashNews.co is
that if you’re above these averages the mean or the median keep working because that doesn’t mean that you’re in great shape it just means that you’re better than the next guy or woman but if those numbers really represent where you are today know that what you have on your
side is a bit of time but not much and it’s important to start contributing aggressively to your retirement plan in either case remember that more money in retirement isn’t a bad thing and if you overshoot the market and you have too much money in retirement well I’m sure you can
figure out what to do with it if you like this CashNews.co check out that CashNews.co on why baby boomers are in financial trouble also as I promised in the description I’ve included a link to this report from the National Institute on retirement security please note I have no affiliation to
them whatsoever it’s a free report that they provide to you this is Jeff Schmidt thanks for watching
CashNews, your go-to portal for financial news and insights.
I real value your videos. Unlike other financial advisors, you don't blame or belittle people. You give good solid advice backed by math and statistics. Five more months until I can retire at 60. The happiness of knowing that I should be ok and can retire early is fantastic. Keep up the good work.
I am a boomer. – born in 59. I did not start 401k with match until 1995 at age 36. Now at 65 I made it to net worth at $2M in those basically 30 years. I had all the things – paid for my own college, mortgage at 6.5%, 3 kids, drove old cars that I fixed myself, unemployed period, recessions and down markets, etc. It can be done. I will leave something for my kids which I did not get from my parents.
For those who retired in 50s:
1. How are you paying for healthcare insurance?
2. Are your children out of the house?
3. Are you really retired or is your spouse working and you quit or were laid off?
I'm an older GenX ('68). Everything I had was available to everyone else. I started with nothing, no college degree, yet still retired at 55 with almost $5 million. The secret? Start early, work continuously, save and invest nonstop, and live below your means. Not hard, but apparently too difficult for most people.
Wait…Media. Retirement savings for Gen X is $10k? That is not close to being correct? It’s like $80k..Still way too low.
I’m an older gen x. My whole life I’ve been told Social security won’t be there when you’re older and you better save in your 401k. Unless we’re talking about people who work at jobs without retirement savings options I’m not sure how anyone my age could really not be aware.
The hell with 401Ks … income producing real estate is my savior. Cash flow baby !
I'm a Gen X, I retired in May 2022 @ 56.
Tip: Have HR direct any bonuses you receive 100% to your 401k. This alone will reduce the taxes from 34% to 10%. My emplyer had had a 6% match which effectly reduced your loss to 4%.
The divorce women are higher because they received their money from the divorced men.
Younger GenX here (46), I retired a year ago thanks to a military pension and some VA disability and zero debt. I take home more now in retirement than when I was working. I have a Roth but it’s just collecting interest and I don’t intend to touch it and I’m still 17yrs away from social security.
I've never heard anyone say social security was good.
We are in trouble because we are the generation that went from a one income household (boomers) to a two income household.. we were literally cut off at the knees
As a Gen Xer, I realized that the 401k is a ripoff. The government created the 401k in a way that made it look good because it was pretax. The 401k provider companies said ohh goody the government is making these programs look good, we can benefit by skimming off the savings for ourselves by charging high fees. The 401k is a win-win for providers not individuals. This is why I save the bare minimum in my 401k. Videos like this should take into account total money saved for retirement in all accounts not just the 401k. I save in taxable brokerage account and Roth IRA at Vanguard where the fees are much much lower than my ripoff 401k
Employers and employees both pay 6.2% each in Social Security taxes that’s 12.4%. If you saved 12.4% of your income and put it in the stock market for 40 years how much money would you have?
How much money does FEMA have in slush funds right now while they’re telling you they’re broke and need more funding how much money 4-7 billion $$$!!!!
All the money needs to be accounted for and made public and the gold reserves have to be verified. If you don’t push your politicians to do this now you will not retire. They are literally stealing your future. Don’t go along with this bullshit where it won’t affect you it’ll affect the next generation. It’s crap if you think you’re going to overburden the youth paying for these elderly people you’re fucking crazy, you already have people running off to Europe and other places as we speak no one is going to keep working to pay the bill so a bunch of foreigners can steal money from the US. The money being shipped to foreign countries needs to stop immediately until accounting is done and swiftly. The massive amount of theft is insane. It will blow peoples minds .
I absolutely oppose lifting the age limit beyond 65, I know it’s higher now it should be returned to 65. They should make up the shortfalls by taking it out of government/funds all government/funds need to be revealed to the public all monies that are in/funds not directly Reserved for vegetarian needs need to be accounted for and showed to the public. They are sitting on a massive amount of money and they’re telling everyone they have to wait longer to retire bullshit what they did in the 80s under tip on nail and Reagan was absolute bullshit and they’re attempting to do it again. These people have trillions of dollars sitting in slush funds that they’re going to leave there until later date where they can start swindling money out of them , they are literally robbing you blind and sending the money overseas to wash it
Gen X here retired this year at 46. Most important skill i think people need to have is deferred gratification. Consider the future value of all discretionary purchase..
It depends, I'm a cusp Boomer, she's a cusp Gen Xer. I have two half pensions and just under 200K in an IRA and 16K in a Roth (started way too late). Wife has a state job as a teacher, worthy of a pension already but, loves her job and her pension is growing. Because she saw my pre IRA 401K growing, she started a 403b too. I stressed importance of saving to our kids, he has a union job with pension and a roth IRA going. She has a couple of 401Ks that she's left at companies & her savings bonds she got as a kiddo that get better interest than most CDs. The moral of the story is paying attention before 25.
I don't know the answer to all of this. However, I am very lucky. I was born in 62 and my father was a banker. He taught me From the age of 3 how valuable money is and how important it is to save. Later in life, I learned on my own how to invest. After getting out of the service, I went to college and studied business. This all led to me to being able to retire at 58. So, I think what I am trying to say is that it is just having the knowledge is worth more than a gift of wealth. Teach a man to fish and he will feed himself for a lifetime.
Another real current problem is a lot of older gen X people are getting laid off. I know of a half dozen men in their late 50s that have been laid off in 2024. Most are struggling to find new work.
My wife and me are gen x HS grads and she has an associate's degree in nursing and I just was an electrical contractor after years of working for companies . We eventually began buying distressed homes renovated them when work was slow and we now live off the rentals and retired in our early fifties. Pensions are rare and 401ks can be hit hard just when you are about to retire, we know several .
Compared to Gen zero, I don’t think so
Stop dissing gen x. We are doing fine. We saved in our 401k and lived below our means. Nothing to see here
I'm actually GenX (XGames was already taken). In the early 90's we were told to get a pension and not worry about retirement. In the late 90's, many people still were focused on a pension. Some were told to put in 10% and that would do it and Social Security would cover it. Around y2k, the older folks raided pension plans, stole pensions, raided pensions for corporate profits, declared bankruptcy and absolutely destroyed the concept of pension for many Gen X that put in 5-15 years into a pension.
Additionally, in the 90's almost every company/employer would match 5 or 10% of money going into the 401k, and by y2k, most cut that down to 3% or do no match. Or they do some match up to a small limit.
Nobody taught anything about retirement in school. Nobody really knew what a 401k was. When the Roth came out, nobody told us about that or how it worked, or why we should care. When the MSA/HSA came out, nobody told us why we should do it.
GenX was told that we'd get into management, paychecks double every 10-15 years, and all will be well. The older generations didn't retire at 62 or 65, kept working as management, didn't pay GenX those increases, and pulled up the corporate ladder.
What little was taught in the 80's and 90's about retirement ended up being wrong. This is why Gen X is a combination of broke, angry, and doesn't care about much.
The Millenials and GenZ have free flowcharts telling them how to invest, when, how much, what accounts, etc. They have more time to invest. And, GenX has been telling Z to invest 20%-30% than the 10% we were told. Sure, many of them ignore that, are in debt up to the eyeballs and still playing "keeping up with the Joneses", but the others are banking their money, doing FIRE and retiring early. Many earlier than GenX who still haven't really been taught how to manage money.
X-er here, I guess I lucked out with smart financial decisions. My biggest motivation was to not be like my parents.
People are horrible at planning for their future.
Gen X here. Born in 68. If you didn't save using the investment vehicles available, realizing pensions were being fazed out. No excuse, it's on you .
Even though I was born in 65, I consider myself a baby boomer, youngest of 7, raised with different values. That being said, my wife and I each have 3 retirement pensions apiece (Fed employee, military, private sector), and we have 1.3M in tsp (conventional and ROTH). Health Insurance covered. Wife is gen-x. Either way, we are doing awesome.
Safe Harbor IRAs is a big contributor to this. Someone working at McDonalds goes to Burger King but left a 401K with less than $5K gets their assets sold. They don't want to spend the time with the rollover and they don't understand what they are doing. Thankfully just now auto portability is kicking in to solve this.
I believe the US military still offers a pension after 20 years of service… Plus, you learn a skill, and may be able to use the GI Bill and apply for a VA house loan..
Gen X is largely responsible for creating the internet, smart phones, etc. Hard to believe these technical gurus are having financial problems.