Why Gen X Has Struggled To Save for Retirement in Today’s Economy

Among American generations, Gen X faces the largest retirement savings shortfall, according to a recent survey by asset management company Schroders.

While this generation, born between 1965 and 1980, thinks they’ll need more than $1.1 million to retire comfortably, they expect to have about $712,000 saved, leaving a shortfall of more than $400,000.

When it comes to retirement savings, Gen Xers lag behind their older (and younger) counterparts due to changes in the broader U.S. retirement system over the past few decades, namely the decline of pensions and the rise of defined contribution (DC) plans, like 401(k)s.

“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 DC plans and before key features like auto-enroll and auto-escalate became common,” said Deb Boyden, Head of US Defined Contribution, Schroders.

401(k) features, like automatic enrollment—where workers are automatically enrolled in their workplace retirement plan—and auto-escalation, where 401(k) contribution rates increase automatically every year up to a certain amount, can encourage people to save more, since they don’t require you to opt in.

These features weren’t available to Gen X when they first started making contributions, which is, in part, why they’re facing a gap.

With retirement fast approaching for older members of Gen X, they have limited time to catch up. However there are some strategic moves that can help close the retirement savings shortfall.

• Contribute more to your retirement accounts: Try to max out your 401(k) in 2026, if you can. This year, the contribution limit is $24,500, but if you’re age 50 or older, you can make catch-up contributions worth up to $7,500. If you have an IRA, you’ll have until tax day to contribute to your account for tax year 2025. For 2025, the IRA contribution limit is $7,000, while the maximum catch-up contribution is $1,000.
• Delay Social Security: You can start collecting Social Security as early as age 62, but if you do so, your benefits will be reduced. At full retirement age (FRA), which is age 67 for those born in 1960 or later, you’ll receive full benefits. However, if you’re willing to wait longer to start collecting Social Security your monthly benefit will grow larger. For every year after FRA you delay collecting, up to age 70, your benefits will grow 8%.
• Think about working longer: One expert advises people in their 50s to think about whether they’d be able to continue working in their current role until they’re ready to retire. If they don’t think so, he suggests they consider switching to a position that’s more sustainable as they age.