Retirement may be mission impossible for Gen X

Skeptical about institutions, they face new rules of how Americans prepare for Golden Years

If this makes Goddard and me sound like rather typical Proto Boomers (with all the negatives that implies, including really marking the end of the "Silent Generation") , just remember that we ARE ( We are the know it alls who will not shut up..)

Larry, I am tempted to hide in a corner and watch for strange beings who come at night and mess with your consciousness and mine. Just yesterday, you and I were discussing, with (I think) praiseworthy avoidance of morbidity, the matter of just how people die. I mentioned my belief that ultimately, people die pretty-much as they live. That is simply an observation, with values attached. But I also mentioned the traditional belief that we should regard the art of living and the art of dying as aspects of each other, and be guided accordingly -- very much a statement of values.
      That being said, I've been thinking about the piece you've borrowed from Salon. Ordinarily I don't pay much attention to pop-sociologist -- and of-course, the pop-sociologists pay no attention to me (their loss, poor darlings). Still, something grabbed me.
       Anyway, I think a terrible Darwinian grinding is already at work in Gen-X. People who have never really learned how to live are going to die, in droves, in a state of fear and helplessness. Yes indeed, we can -- and do -- blame TV, we can blame the deceptive ease and temptation of modern Euro-American life, and we (in America at-least) can blame the chaos of values following their parents' -- "our" wars.
        I emphasize that plural in wars, because of the following: yes, our generation fought (or resisted) the Viet Nam horror, but we were silent, even invisible in the series of little horrors which followed soon after, and in which the US was the prime mover: the botched "rescue" at Teheran Nicaragua, the proxy-war in Angola, Grenada, the bombing of Libya, the invasion of Panama, and the run-ups to the Persian Gulf and Afghan catastrophes in which we are still lost. By the time these struggles came up to their present level, they'd been going on long enough so that Gen-Xers were fighting the wars which their parents had started, or at-least countenanced by their contemptible silence. My point is simply to ask readers here, and the writer of the original piece, how can one ever measure the effects of living in a society on continuous war-footing? If one doesn't even see it, there is no question of over- or under-estimating its significance.
          There is a piquant, albeit localized irony in our discussing this here on this blog. There is a certain memoir about the young beautiful people of New York in some of the years in question. It has one of the greatest titles I've ever encountered, which at-least partly makes-up for the absurdity of the author's surname. Surely somebody here has read Seemed like a good idea at the time by David Goodwillie. Comments? Incidentally, don't judge the author by his novel American subversive. I am still chuckling over that one: it spirals-off into silliness at the point when the author locates a bomb-factory in Waitsfield, Vermont. That is a little like putting an AK-47 factory in Scarsdale, or a meth-lab in Gracie Mansion. But I digress. It's somebody else's turn now . . .

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Gen X is the first generation to deal with the fact that the models of American retirement are changing — and its members are flustered.

By Jessica Rao

updated 4/18/2012 9:23:52 AM ET

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As kids, they sat on gas lines in the backs of their parents’ cars. As young adults, they saw the stock market crash, and when it finally came time to settle down, they bought a house at the peak of the housing bubble and then were faced with the worst economy since the Great Depression.

It’s no shock that Generation X — those born from 1965 to 1981 — may get short changed in their golden years.

Though they’ve watched parents and grandparents nestled with pensions, Social Security and strong economic growth, these are no longer guarantees. On the other hand, longer life spans with more medical bills and greater need for cash are the reality for many.

Gen X is the first generation to deal with the fact that the models of American retirement are changing — and its members are flustered. The generation once called “slackers” has been true to form with retirement planning.

“Gen X is a transition generation,” says Carol O’Rourke, a certified financial planner and Executive Director for the Coalition for Debtor Education in New York City. “Gen Xers were young during the tech bubble, and when they came of age, housing was a lot more expensive. With all the talk about whether Social Security is going to survive, there is a sense of not having something to look forward to.”

According to a 2012 Insured Retirement Institute , IRI, report, only one-third of Gen Xers are "very confident" about having enough money to live comfortably during retirement, cover their medical expenses, and pay for their children’s higher education.

Just 41 percent of the group have tried to figure out how much money they will ultimately need to save for retirement, and among those who have saved, half have amassed less than $100,000.
“Even though they have a longer time horizon toward retirement, there has been a tremendous emotional impact on their confidence in the future. What are they going to do to be sure that they have enough?” adds Cathy Weatherford, IRI president and CEO.

Along the same lines, a November 2011 report from the Guardian Life Insurance Company of found 82 percent of Xers believe the economy is headed in the wrong direction.

Skepticism is one of the defining X characteristics, says Robert Wendover, managing director at the Center for Generational Studies in Littleton, Colo.

“Many of the institutions that they were taught as children didn’t play out, whether it was political or social or economic. They just kind of unraveled for a variety of reasons,” says Wendover.

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With the complexity of financial products on the market, Xers are not investing like other generations because they can’t find advice, say experts.

O’Rourke points out that, “while you used to be able to start small, private banks these days are looking for large clients and you need something like $250,000 to open an account.” Though Xers might be comfortable with online banking, they're not the type to invest in the Internet.
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Gen Xers have been burned and are more hesitant, agrees Shalyn Courtenay, a Senior Associate at a Cambium, a full service financial advisory firm in Purchase, NY. In some cases, Courtenay encourages clients to put money in the stock market, but frequently suggests annuity products and cash value whole life insurance that provide guarantees.

The IRI study also revealed that during the recession, 15 percent of Xers made early withdrawals from their 401(k) plans, 23 percent stopped contributing to their retirement accounts, and 22 percent stopped contributing to college savings plans.

“The leakage out of their 401(k)s to meet current needs is what is most worrisome,” adds Weatherford.

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“Tapping into retirement accounts is expensive,” agrees Courtenay, who is quick to remind clients that everyone should have emergency liquid funds, such as a money market account,.
On the job front, Xers may not be in the executive level jobs that they hoped for because the Baby Boomers are working longer.

“It delays the natural promotion and succession process within in many firms,” Wendover points out.
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Home ownership in the X demographic is also down. The Census Bureau reports that in the first quarter of 2005, 70 percent of older Xers (ages 35 to 44) owned homes. In the fourth quarter of 2011, it had fallen to 62 percent. Among younger Xers (under 35), it dropped from 43 to 38 percent in the same time period.

The elephant in the room, however, is Social Security . An American institution since the 1930s, there will almost certainly be modifications that will apply to the X generation, say experts.
It’s possible that SSI benefits will be taxed more heavily, particularly for upper-income earners. Younger people will probably have to pay more in Medicare , and because of stress to the system, it is almost a foregone conclusion that the retirement age will gradually be lifted for those under 55.

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