While many peak boomers are facing financial challenges in retirement, Generation X — the “forgotten generation” — may have it worse.

While baby boomers “dominate headlines,” Gen X “faces an even greater retirement crisis,” according to a report by the Retirement Income Institute. This is the generation that lived through the shift from defined benefit (or traditional) pensions to defined contribution pensions, like 401(k)s.

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That means Freedom 55 isn’t a reality for most Gen Xers, like it was for their parents. Throw in uncertainty about the future of Social Security, and the prospect of a comfortable retirement seems out of reach for many.

Gen X (those born between 1965 and 1980) will have to rely heavily on their own retirement savings. But, with the S&P 500 heavily weighted toward a small number of AI companies, there’s also fear of an ill-timed market crash.

Reality bites for Gen X

Gen X has faced eight recessions, student-loan burdens and high housing costs, which has “constrained savings during peak earning years,” according to the Retirement Income Institute report. At the same time, only 14% of Gen X workers have a traditional pension.

“They witnessed the bursting of the dotcom bubble in 2000, immediately followed by the economic shocks associated with the terrorist attacks of September 11, 2001,” according to a whitepaper from Corebridge Financial.

This was followed by the financial crisis of 2008, the cryptocurrency crash of 2018 and the COVID-19 pandemic, “which led into the highest levels of inflation in over 40 years.”

Since Gen Xers are less likely to have a traditional pension, they might be expecting Social Security to fill in the gap.

But, without reform, the Social Security trust fund — which is used to pay retirement benefits — is projected to run out in late 2032, according to the Social Security Administration’s annual trustees report. This could result in a 20% benefit cut.

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