Why Gen X Is Losing the 401(k) Game — and How To Turn It Around, According to Jean Chatzky

Generation X isn’t ready to retire — at least financially speaking. Born between 1965 and 1980 — Gen Xers currently range in age from 45 to 60 years old.

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While the younger members of this generation likely still have a couple of decades until retirement, the older members are nearing their golden years. As of 2025, the average retirement age for women is 62.6 years old, while the average age for men is 64.6 years old, according to the Center for Retirement Research at Boston College. Keep reading to find out why Gen Xers aren’t saving enough in their 401(k) plans and how to make positive changes to prepare for retirement.

Gen X Hasn’t Kept Up With Costs

Unfortunately, only 14% of Gen X feels financially prepared for retirement, according to the 2024 Schroders U.S. Retirement Survey. Members of this generation think they will need $1,069,746 to retire comfortably, but only expect to have $602,944 saved — leaving a $466,802 shortfall.

Thankfully, it’s not too late to turn things around. A recent episode of the HerMoney podcast with Jean Chatzy featured a discussion with Yahoo Finance senior columnist Kerry Hannon, co-author of “Retirement Bites: A Gen X Guide to Securing Your Financial Future.”

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Why Gen X Is Losing the 401(k) Game

Gen X has faced a variety of obstacles that have kept many from consistently saving for retirement — or at least saving as much as needed.

“You could argue that the odds were stacked against Gen X from the start,” Chatzky said. “Traditional pensions mostly disappeared right as we entered the workforce.”

She noted that 401(k) plans didn’t become commonplace until years after Gen X entered the workplace. Add to this the economic challenges this generation has faced, including the tech bubble, the Great Recession and the COVID-19 pandemic, which further disrupted its ability to save for retirement during key earning years, she said.

Additionally, Hannon said that no one gave Gen X financial education to help them know what to invest in. Plus, there weren’t as many investment options to begin with, and at the time 401(k) investment limits were lower than they are today. All together, it feels like the deck was stacked pretty high against Gen X ever building up enough income to handle the inflation of the 2020s.

How Gen Xers Can Turn Their Retirement Savings Around

When it comes to saving money, mindset plays a large role. Hannon recommended practicing the HOVER method — hope, optimism, value, enthusiasm and resilience.

“These are learnable skills, which is important, because we are going to have to tap dance a little bit,” Chatzky said. “We are going to have to make changes.”

Hannon’s advice to getting started is to ask yourself what you really value in life. This can feel daunting, so she said to break it down into different aspects of your life, looking within to determine how much joy you’re getting from different things.

This will help you budget better, which is the first step to taking control of your spending, Hannon said. From there, you’ll visualize where you want to be in the next few years, which will help you figure your priorities and get your finances in order.

In addition to improving your financial health, you also need to pay attention to your physical health, Hannon said. She noted that out-of-pocket medical expenses will be one of your biggest costs in retirement.

If you’re planning to work in retirement, Chatzky said you’ll also want to make sure your job has staying power. Since AI and other factors could make certain jobs obsolete, now might be the time to reskill and change course.

Ultimately, an ability to realize your retirement savings isn’t on track and take drastic steps to change this can allow you to make the necessary adjustments.

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This article originally appeared on GOBankingRates.com: Why Gen X Is Losing the 401(k) Game — and How To Turn It Around, According to Jean Chatzky

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