Gen X Turns to ‘Retiring Backwards’ as Savings Deficits and Caregiving Costs Mount
With defined-benefit pensions largely absent and median savings falling short, Generation X is rethinking traditional post-career living.
Generation X is confronting an unprecedented retirement savings deficit, prompting a growing segment of the cohort to abandon traditional post-career aspirations in favor of a trend financial planners call “retiring backwards.” Rather than planning for expensive travel, country club memberships, or secondary properties, Americans born between 1965 and 1980 are increasingly turning to low-cost pursuits from their youth, alongside pragmatic lifestyle adjustments designed to curb living expenses.
The financial shortfall driving this shift is vast. According to Northwestern Mutual’s 2025 Planning & Progress Study, Gen Xers estimate they will need $1.57 million to retire comfortably. However, data from Schroders shows an expected savings shortfall of more than $460,000, with workers projecting average savings of $660,000 against an anticipated requirement of $1.1 million. The reality for many is far leaner: analysis by the Retirement Income Institute indicates that median retirement savings currently stand at just $6,000 for women and $13,000 for men in this age group.
Dan Doonan, executive director of the National Institute on Retirement Security, has previously cautioned that the conventional expectation of American retirement risks becoming unachievable for a major portion of this generation. The structural vulnerability stems largely from a historic transition in private sector employment benefits. While over 50% of Baby Boomers benefited from defined-benefit pensions that provided guaranteed lifetime income, only 14% of Gen Xers have access to traditional pensions. Instead, Gen X became the first generation forced to rely almost entirely on defined-contribution 401(k) accounts, which were established following the Revenue Act of 1978 and shifted investment risks onto individual workers. Currently, only about half of Gen Xers actively participate in an employer-sponsored retirement plan.
Compounding this lack of an institutional safety net is the financial strain of simultaneous caregiving responsibilities. As the primary occupants of the “sandwich generation,” 56% of Gen X investors provide financial support to both aging parents and adult children, according to a 2024 Harris Poll conducted for Nationwide. To manage these dual pressures, 23% of respondents reported reducing or stopping their retirement contributions, while 16% have drawn funds prematurely from their existing retirement accounts.
These caregiving demands are fundamentally altering housing markets. Gen X accounts for the highest rate of multigenerational home purchases of any demographic group at 19%—more than double the 9% rate seen among younger millennials—according to Jessica Lautz, deputy chief economist at the National Association of Realtors. Pooling family financial resources under one roof serves as a direct hedge against rising housing costs and individual living expenses.
Simultaneously, Gen X carries higher debt loads across credit cards, mortgages, and student loans than any other age group. A survey by New York Life found that Gen Xers saved an average of $7,463 in 2024, compared to more than $12,000 saved by millennials during the same period, while maintaining the highest average credit card balances in the country.
Faced with these economic realities, returning to familiar, budget-friendly hobbies—such as playing in local bands, collecting physical media, or revived analog pastimes—offers predictable costs and built-in social networks without capital requirements. Capital City Wealth Management founder Benjamin Brandt noted that while previous generations made speculative forecasts about their future retirement lifestyles, Gen X is “going backwards with known information.” Sherry, host of the podcast “This Gen X Life,” observed that adopting a 1990s-era lifestyle may be the only practical path to retiring by age 62.
Confidence in personal financial futures remains subdued as a result. Nationwide research indicates that only 25% of Gen Xers express confidence in their retirement strategy, with just 18% describing themselves as very confident about maintaining a comfortable lifestyle. Consequently, 16% of the generation expects to delay retirement past their planned age, while 15% remain unsure if they will ever be able to retire from the workforce entirely.
