Some Gen Xers Are Struggling To Save For Retirement As They Financially Support Family

If you feel that financially taking care of your family is making it harder to save for your own retirement, you’re not alone.

According to a recent survey, more than half (56%) of Gen X investors provide financial support to their parents and children, which is taking a toll on their retirement savings.

Roughly 23% of those surveyed by Nationwide Mutual said they’ve had to scale back or stop saving for retirement because of it. To meet the family’s financial obligations, some (24%) are taking on more credit card debt, while roughly a third are cutting back on non-essential expenses.

“A big challenge for the Sandwich Generation is that they often put the needs of their loved ones above their own, leaving them in a potentially precarious financial situation that can have long-term implications,” said Craig Hawley, president of Nationwide Annuity.

What is even more worrying is that 16% of Gen X said that they had tapped their retirement accounts early to manage their financial responsibilities, which could further hamper their retirement savings.

Experts generally advise people against tapping their retirement accounts early, as doing so means missing out on the benefits of compound interest and possibly having to pay an early withdrawal penalty.

Inflation, Economy Could Further Derail Gen X’s Retirement Plans

Along with family responsibilities, the economy has also weighed on Gen X’s outlook for retirement. More than one-quarter (26%) said that they’ll retire later than expected due to inflation with nearly half (44%) saying they anticipate retiring at age 66 or later.

However, that may not be the case.

A recent Transamerica survey of current retirees found the majority had exited the workforce earlier than expected, retiring at a median age of 62—largely due to health or employment-related issues.

And many Gen Xers are already behind when it comes to saving for retirement. Three out of 10 respondents said they had less than $100,000 saved, while only 16% said they had at least $1 million.

They may also be slightly worse off than prior generations because of factors beyond their control.

“Gen X investors have shouldered the impact of major economic events, from the dot-com crash in 2000 to the Great Recession in 2008, while also entering the workforce just as pensions were being phased out,” Hawley said.

Despite struggling to deal with multiple financial priorities, Gen X is still trying to stay on top of their finances—60% say they’ve adjusted their investment portfolio due to high inflation and 67% said they have enough savings to weather a possible recession if it happened in the next 12 months.