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Generation Xers struggling with retirement savings

Date posted:  8/3/15 09:30:00 AM Many Gen X workers are struggling to save for retirement.

Catherine Collinson isn't afraid to put it bluntly. Referencing a struggling economy for Generation X workers, Collinson, president of Transamerica Center for Retirement, said "retirement reality bites."

"Most Generation X workers are currently saving for retirement but many are not saving enough," Collinson said. "Finding the extra income to save may be extremely difficult. However, it is a worthy challenge that can make or break a comfortable retirement."

A survey from the retirement center found 83 percent of Generation X workers are worried that Social Security won't be available to them by the time they are ready to hang up their work boots. Likewise, 85 percent of those workers who were born between 1965 and 1978 believe their parents' generation had an easier time saving for life after work.

Despite starting to save at an average age of 27, the survey revealed $70,000 was the current median value of retirement funds that Generation X workers have accumulated. Most respondents agreed they'll need closer to 1 million to live comfortably in retirement, while 31 percent said they'll need $2 million or more.

It's been a hard market for Generation Xers
Forbes reported Generation X workers have largely worked during trying economic times. Many are still taking care of excessive student loan debt, or dealing with the aftermath of the stock market's dive. Additionally, many Generation X workers bought homes prior to the burst of the housing bubble. Forbes cited a study from Zillow, which stated Generation Xers are more likely underwater on their homes than millennials or baby boomers.

According to the Transamerica Center for Retirement survey, 12 percent of Generation X workers lost their jobs during the recession. One-fourth watched incomes get slashed after their employers reduced hours or wages, and four percent lost homes.

But it is still possible for Generation Xers to revamp their current financial situation after dealing with a stringent financial environment during the Great Recession. Collinson said that demographic is starting to rise above the ashes, as 57 percent of Generation Xers reported they are improving their financial standing - although just 12 percent have fully recovered from the recession.

"Next year, the first Gen Xers will begin turning 50 and they need a vote of confidence that they can improve their retirement outlook," Collinson said. "Gen Xers are on a retirement collision course that can be corrected. They still have time to positively change their retirement destiny. They can do it."

How to get retirement planning under control
When Americans find themselves in over their head regarding their financial standing, it never hurts to ask for help.

The Insured Retirement Institute reported Generation X workers who have contracted a financial planner are doing much better than those working on retirement planning by themselves. According to the report, those who use a financial planner have a median retirement savings of $90,400, which is more than double the amount of those who don't use a planner.

"Most Generation X workers are currently saving for retirement but many are not saving enough," Collinson said. "Finding the extra income to save may be extremely difficult. However, it is a worthy challenge that can make or break a comfortable retirement."

Data collected by Collinson's firm backs her statement that most Generation X workers are not saving enough. The retirement center revealed 24 percent of respondents called saving for retirement their top priority. Meanwhile, 48 percent of respondents said they were most concerned dealing with their current financial environment. Twenty-seven percent were most concerned with paying off debt and 21 percent were most interested in covering basic living expenses.