Ethan Hawke sits with Winona Ryder in a scene from the 1994 film Reality Bites.
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As Generation X knows all too well, “reality bites,” to quote the 1994 cult film of the same name.
Most members of the Generation According to the National Institute on Retirement Security, the typical Generation household has
“When we think about preparing for retirement, we worry about the large number of people who are not on track,” Dan Doonan, executive director of the National Institute on Retirement Security, said Thursday at the Financial Advisor Summit CNBC.
In general, many Americans are concerned about their financial well-being and retirement planning. According to a recent Bankrate study, more than half of working adults feel like they are behind on their retirement savings.
But if you break it down by generation, the probability is that the Generation Workers of the Generation
According to Bankrate, more than half of the workforce is of this generation
At the same time, the generation’s average 401(k) balance is
Generation X savers have benefited significantly from improved defined contribution plans, including newer plan features such as auto-enrollment and auto-escalation.
Why Generation X is falling behind
Yet “they still have a big savings gap compared to what they need in retirement,” Fiona Greig, global head of investor research and policy at Vanguard, said at the summit.
Financial pressure due to rising costs Higher education and healthcare, as well as rising student loan balances, have weighed heavily on Vanguard Retirement Readiness Report found.
This generation is also expected to live longer than baby boomers, further widening their savings deficit. “They live a whole year longer, but they don’t work a whole year longer,” Greig said.
How the “sandwich generation” gets on the right track
For clients in their 40s and 50s, “we’re exploring why they feel behind,” certified financial planner Lazetta Rainey Braxton, co-founder and co-CEO of 2050 Wealth Partners, said at the summit.
Often times, “life happened and financial responsibility increased,” said Braxton, who is also a CNBC contributor Financial Advisor Council.
They are not the so-called “sandwich generation” for nothing, she added. “They support the generations before them and also build and expand their families, which requires resources for the generations after them.”
Still, there are investment tools that can be helpful, including what your employer offers and individual retirement accounts.
“If they come to us a little later, we’ll put everything on the table so we can realistically move forward,” Braxton said.