Gen X is facing a $400K retirement shortfall. Why they are falling behind on savings — and how anyone can catch up

Gen X is facing a $400K retirement shortfall. Why they are falling behind on savings — and how anyone can catch up
Chris Clark
5 min read
As Americans reach their 40s and 50s, retirement begins to feel less like a distant idea and more like a real milestone on the horizon.
After decades of contributing to employer-sponsored 401(k) accounts and individual retirement accounts (IRAs), many expect to see a healthy nest egg taking shape, the reward for years of disciplined saving.
For many Gen Xers, however, that picture isn’t quite coming together.
Gen X is the first generation largely dependent on employer 401(k)s for retirement income, as guaranteed pensions are no longer available for most Americans, and anxieties surrounding Social Security grow.
Now, the generation feels it’s falling behind: A report from wealth management firm Schroders shows Gen Xers expect to come up $404,976 short (1) of what they need for retirement.
“While many baby boomers have defined benefit pension plans that provide a set income for life, Gen Xers entered the workforce as pensions were being replaced by defined contribution plans and before key features like auto-enroll and auto-escalate became common,” said Deb Boyden, head of US Defined Contribution for Schroders.
Often called the “sandwich generation,” (2) Gen X has spent much of its adult life balancing multiple responsibilities — building careers while often supporting both growing children and aging parents. That constant juggling act can stretch both time and finances, leaving less room to focus on long-term retirement planning.
Why the nest is unfinished
Schroders’ 2025 US Retirement Survey survey shows that Gen Xers believe they’ll need $1,116,747 for a comfortable nest egg, but only expect to have $711,771 at retirement.
Fidelity data shows the average Gen X 401(k) balance is $192,300 and their average IRA balance is $103,952 (3).
Younger Gen Xers still have more than a decade before retirement — enough time to ramp up contributions and get serious about planning.
But for the oldest members of the generation, retirement is only a few years away. Many may be wondering how they’ll cover basic living expenses with what they’ve saved, let alone pay for travel, leisure and the other comforts associated with retirement.
Not being able to pay for food and health care expenses in retirement is a grim reality facing many Americans. Sharon, a 65-year-old woman living with a disability, recently called into C-SPAN (4) to lament cuts to assistance programs that have left her with just $65 a month to buy food.
“I’m legally blind. I’m on disability. I went to my doc, and I lost 28 pounds in the last year. I did not need to lose 28 pounds. I did not try to lose 28 pounds,” Sharon said. “I lost the 28 pounds because I cannot afford to eat anymore.”
Some Gen Xers may find themselves uncomfortably close to Sharon’s situation, as financial experts say the generation lacks many of the safety nets that supported earlier retirees.
According to a 2025 report from the Retirement Income Institute (5), Gen X has been particularly affected by the shift away from traditional pensions and ongoing uncertainty surrounding the future of Social Security.
“While baby boomers dominate headlines, Generation X (ages 45–60) faces an even greater retirement crisis,” the Institute’s report authors said, noting previous data showing that 83% of Gen Xers have care responsibilities for either a child, parent or both (6).
“With shrinking pensions, rising longevity, and heavy caregiving burdens for parents and other family members, Gen X risks becoming the most financially vulnerable cohort to reach retirement.”
More than half (53%) of Gen Xers are concerned about outliving their savings, while only 14% have access to a traditional pension, report authors noted. And Social Security may be wobbly, as the trust that funds benefits is projected to be depleted by 2033 (7), according to the Social Security Board of Trustees.
Maximizing the rest of your working years
Being only 10 to 20 years from retirement with not enough saved can make Gen Xers feel like they’re on a compressed timeline. But it’s still a sizable window to start planning and begin to bolster those retirement funds.
Maximizing payroll contributions may be the first step. Signing up for automated increases until you reach the maximum, and ensure your employer’s 401(k) match, can help build your foundation.
Consider putting any bonuses or promotion raises into your 401(k), while opening a Roth IRA or high-yield savings account can help you save even more. Plus, if you’re 50 or older, you are eligible for additional catch-up contributions (8).
If you are worried about the longevity of your Social Security benefits, consider delaying them. Working another 2 to 5 years past your anticipated retirement age can make a big difference. You can start drawing Social Security as early as 62, but waiting until 70 can give you the maximum benefit.
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