Will Generation X Retire?

April 20, 2012 Updated Apr 20, 2012 at 6:15 PM EDT

FORT WAYNE, Ind. (Indiana’s NewsCenter) – A study released by the Insured Retirement Institute says members of Generation X are not only skeptical of retirement, but in many cases, feel as though it is out of reach.

The report, published in January, says that nearly two-thirds of Gen-Xers are not confident that they can retire with enough money to live comfortably. Those feelings are based on long-term healthcare costs and college savings plans for children.

Generation X is generally considered to be those born from 1965 – 1981.

The report also states that the financial savings of Gen-Xers has been ignored, mismanaged or withdrawn. The report says 23 percent stopped contributing to their retirement plans, 15 percent made early withdrawals from those plans and 22 percent stopped contributing to a college savings plan all amid an economic recession that is still plaguing much of the country.

Earl Galey, of Fort Wayne, is one Gen-Xer who says the findings in the IRI study apply to him. He says gas prices, job protection and the ability to save money are all issues he considers daily. He says retirement sounds more like a dream to him than anything else.

“We’re not going to be able to retire when we’re supposed to. Number one, it’s about keeping a job and having an education. Also, living costs and the prices for gas are going up. We're not going to be able to save money to actually retire at all.”

Galey is not the only Gen-Xer feeling the pain. Carrie Wilson, who was born in 1974, says she worries about social security.

“I’m not so sure that it will be there when it gets to be my age to retire. I don’t think that the social security will be in place in the next 20 – 30 years.”

According to one local expert, the road to financial salvation can still be traveled with relative ease if certain monetary principals are given close attention. Tim Rooney, the senior vice president of investments at Stifel Nicolaus in Fort Wayne, says it is not too late for members of Generation X to start saving and investing money. Before doing so, Rooney says the most important step is eliminating debt.

“If you can, the biggest way to get ahead in investments and financially is not to have debt. So try to pay off your car, pay off your credit cards, eventually, pay off your house. That would probably be the only debt that could be argued that you could keep is your home equity debt because, as of now, the tax code lets you deduct that interest.”

Derry Smith, another member of the Fort Wayne community that Indiana’s NewsCenter caught up with, was born in 1971. He, unlike Galey and Wilson, says retirement is possible with self-motivation and careful financial planning.

“I plan for myself. I really save. That’s things like IRAs, mutual funds, things like that. Start saving for yourself and invest and try to put some money away.”

Rooney says other Gen-Xers can take from Smith. He says the first and perhaps easiest way to save is to take advantage of 401 (K) opportunities at work.

“You do want to take advantage of any retirement plan, especially if they're matching your contribution because let's be honest, that's doubling your money. If you can put up to three percent in and they're going to match three percent, you’ve got to do the three percent. That's a no-brainer.”

Other Notes from the Study:

-Less than half (41 percent) of Generation X have tried to determine how much money they will need to retire. Half of that 41 percent have saved less than $100,000
-More than half (54 percent) of female members of Generation X considered themselves as having little to no investment knowledge, compared to 37 percent of male members of Generation X
-The average anticipated retirement age, as determined by Generation X, was 64 with a retirement period of 20 years.
-Today, 37 percent of the members of Generation X have consulted a financial advisor, and of single members of Generation X, the number decreases to 20 percent