Sandwich generation stresses weighing on Gen X retirement plans

Retirement reality is really starting to bite Gen X.

A recent survey from Prudential Financial revealed that America’s 65 million Generation Xers  — those Americans born between 1965 and 1980 — are facing a slew of financial challenges just as they enter their final working years. Most notably, more than one-third of Gen Xers have less than $10,000 in retirement savings and they are largely missing out on the Great Wealth Transfer from boomers to millennials.

“The problem is they really haven’t had the time to think about their future self and to get really confident about their plan going forward. And so they’re looking at retirement and are feeling like they may have to rely on Social Security for a large portion, if not all of their income,” said Dylan Tyson, president of Prudential Retirement Strategies.

As to the extent of their financial problems, the Prudential report said that almost half (47%) of all working Gen Xers expect to retire later than anticipated, while 40% plan to work part-time after retirement. A mere 12% say an inheritance will be a source of retirement income, even as boomers are expected to pass down more than $70 trillion.

And they can forget flying south for a sunny retirement on the beach. Approximately two-thirds (65%) of Gen X plan to stay in one city or town in retirement, and only 15% plan to split time between two locations, according to the Prudential study.


In terms of what financial advisors can do to help their Gen X clients, especially those trapped in the so-called “sandwich generation,” who are caring for their parents and children simultaneously, Tyson, a Gen Xer himself, says the key is to reduce the problem to its bare essentials and then have a plan.

“If you’re getting squeezed in that sandwich, the first thing is to make sure that you take a moment to have a plan for yourself, and to understand what’s most important, and then prioritize against that. If you’re clear on that, then you’ll make sure that your financial life supports your real goals overall,” he said.

“And I would say for most people, the pooling of longevity risk overall can provide longer and greater income for whatever amount of money that you have saved,” Tyson added. “And so that’s a way that you can consider stretching the money that you’ve worked so hard to save given that we’re supporting our parents and our kids.”

A Gen Xer herself, Christina Nash, founding partner and financial advisor at Knox Grove Financial, part of Osaic, knows all too well what it feels like being in the sandwich generation. 

“The best advice I can give to other advisors is to educate themselves on the subject matter of elder care along with forming a network of trusted partners to further assist your clients,” she said. “In addition, an advisor will need to accommodate the Gen Xers’ needs for flexibility and communication styles.”

Brian Hartmann, partner at Granite Bridge Wealth Management, part of Osaic, says Gen Xers face a unique set of circumstances as it relates to their need to support the generations in front and behind them. As a result, he recommends that they follow what he calls “the flight attendant’s advice.

“Before every flight, the flight attendant shares safety information, which includes that in the case the oxygen masks are deployed, adults should first put their own mask on before helping others,” Hartmann said. “We believe that Gen Xers can use this advice while deciding who to financially support and how best to do it. This may initially seem harsh, but how well can Gen Xers take care of others if their own finances are not in good order?”

Hartmann said he works with multiple generations of families who face similar circumstances. In most cases, he’s able to find a way to make sure the families can be self-supporting without long-term financial hardships. 

“This process is not always easy, but it is always worth the time and energy,” he said. “Working with an experienced advisory team is one way to gain perspective and professional advice on how best to handle this situation that many Gen Xers are facing.”

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