The majority of Generation X workers believe they'll need to save a million bucks or more for retirement, and almost a third think they'll need more than $2 million.
But so far they only have about $70,000 in retirement savings for their household, according to a report out Thursday from the non-profit Transamerica Center for Retirement Studies.
Most (83%) Gen Xers — those born between 1965 and 1978 — are concerned that Social Security won't be there when they're ready to retire, and the majority (85%) think they'll have a much harder time achieving financial security than their parents did, says the report, which is based on a survey of 4,143 full-time and part-time workers, including 1,120 Generation Xers.
Only 14% are very confident they'll be able to retire one day with a comfortable lifestyle, and about a third expect a lower standard of living in retirement.
In 2015, the first Gen Xers begin turning 50, says Transamerica Center President Catherine Collinson. "Many are saving for retirement, but most are not saving nearly enough to fully grow their nest eggs."
It is never too late to start saving for retirement — or to begin saving even more, Collinson says. About 84% of Gen Xers who are offered a 401(k) or similar plan participate in the plan at a median annual contribution rate of 7% of their annual salary. "They should be saving 10%, 12% or even 15%," she says. "Procrastination is the enemy of retirement planning. They can't afford to wait any longer."
Other findings about Gen X workers:
• 31% think they will need to save $2 million or more for retirement; 25%, $1 million to $2 million; 20%, $500,000 to $1 million; 24%, less than $500,000.
• 39% would rather not think about retirement investing until they get closer to retirement.
• 54% plan to work past age 65 or don't plan to retire. Most (62%) would like to ease into retirement by staying employed but work fewer hours so they have more leisure time, or they would like to work in a less demanding job that gives them greater personal satisfaction.
• That said, only 44% are working on keeping their job skills current; 18% are networking and meeting new folks; 17% are checking out the job market. "If they want to stay in the job market, Gen Xers need to be hyper-vigilant about keeping their job skills up-to-date and relevant. That's the world we live in," Collinson says.
• 61% have a retirement strategy, but only 14% have a written plan.
• 65% say they don't know as much as they should about retirement investing.
• 35% of those who are investing for retirement use a financial adviser.
Collinson offers these retirement planning tips:
• Take a close look at your finances. Do an assessment of your retirement savings, assets and debts. Doing a smart budget now may pay off in the future, she says.
• Calculate how much money you'll need for retirement and make a plan. Write it down. Make sure you consider living expenses, health care costs, long-term care, interests and hobbies. "We work and save all of our lives, but few people are setting funds aside for pursuing their retirement dreams like traveling and hobbies," Collinson says.
• Save aggressively. Participate in employer-sponsored retirement plans, if offered, and take full advantage of employer contributions. Consider catch-up contributions available for people age 50 and older.
• Learn all you can about retirement investing. Consider seeing a professional financial adviser. "You need to be educated enough to ask good questions so you can make informed decisions," she says.
• Check into Social Security and other government benefits such as Medicare. "The first Gen Xers will start becoming eligible for full benefits at age 67 in the year 2032, just one year before the Social Security Trust Funds' forecasted depletion. They should be engaged in the future of Social Security and its proposed reforms," Collinson says.