AARP Hearing Center
7 Ways Gen Xers Are Sabotaging Their Retirement Savings
Fixing these financial missteps now can help secure your future
Taylor Callery
Key takeaways
- Many Gen Xers say they feel unprepared for retirement and regret financial decisions they made when they were younger.
- Taking on too much debt, letting emotions guide investments and raiding retirement accounts early can derail your plans.
- Financial planners say it’s not too late to improve your outcome through careful budgeting and planning.
Survey after survey shows that as they approach retirement, Generation X feels unprepared.
Case in point: Half of Xers, or those born from 1965 to 1980, don’t think they’ll be financially ready to retire when the time comes, according to Northwestern Mutual’s 2026 Planning & Progress Study. A quarter say they haven’t even started saving for retirement.
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Many Gen Xers regret financial decisions they made when they were younger, including spending beyond their means, taking on too much debt and waiting too long to begin saving, according to a 2025 survey by the CFP Board, the professional body for personal financial planners in the U.S.
However, it’s not too late for members of Gen X to turn things around. “There’s no time like the present to get their financial life in order,” says Jaime Eckels, a certified financial planner with Plante Moran Financial Advisors in Auburn Hills, Michigan.
Start by determining whether you’re making any of these self-sabotaging money moves. Then, follow the tips to get your retirement savings on track.
Delaying your retirement planning
Many Gen Xers wait too long to start planning for retirement, says John Cooper, a certified financial planner and senior private client adviser with Greenwood Capital in Greenwood, South Carolina. In fact, more than half haven’t done any retirement planning, according to the Schroders 2025 U.S. Retirement Survey.
Make a plan: Start by using a retirement calculator to see whether your savings are on track. AARP’s nest egg calculator can help you estimate how much you need to save to meet your retirement goals.
Then, consider getting help from a professional. Gen Xers are the least likely generation to work with a financial adviser, with just 26 percent doing so, according to the Schroders survey.
If you’re employed, check whether your workplace benefits include access to a financial adviser or any sort of financial planning help. Another option is to hire a fee-only financial planner to review your finances and help you create a retirement plan. You can find planners who charge by the hour through the Garrett Planning Network, the National Association of Personal Financial Advisors or Wealthramp.
Income doesn’t have to be a barrier to getting retirement planning help. Some advisers do pro bono work for individuals with lower income, says Cooper, who provides free financial counseling to people in his community.
Not aligning your spending with your goals
It’s hard to reach your retirement savings goals if you don’t know where your money is going each month. And yet, Eckels says, very few of her Gen X clients have a budget. “They’re just spending,” she says. “They don’t have an idea about their financial plan.”
Create and stick to a budget: Take an honest look at your spending by reviewing your bank and credit card statements from the past year. “Sometimes it takes that shock — seeing what you’re spending on an annual basis — to make a change,” Eckels says.
This process can help you identify and eliminate wasteful spending, freeing up money to make larger retirement account contributions. Even seemingly small splurges can add up, as Eckels discovered when she recently reviewed her expenses and found that she had spent more than $2,000 on manicures and pedicures over the course of a year.
Knowing how much you’re spending and where you can cut back can also give you a clearer picture of how much money you’ll need in retirement to support the lifestyle you’re accustomed to.
Letting emotions drive your investment decisions
Brenna Baucum, founder of Collective Wealth Planning in Salem, Oregon, says Gen Xers often react emotionally to market downturns. That tendency may be rooted in their experience of the Great Recession, which struck when members of Gen X were in their late 20s to early 40s.
“There was enough in their savings account to feel nervous about it,” Baucum says. Some were so worried they pulled out of the stock market entirely, she says. And selling during downturns can create long-term setbacks for retirement savings.
Keep calm and carry on: You’re typically better off sticking to your retirement savings plan and giving your investments time to recover rather than moving your savings to cash during a downturn. Cash accounts tend to earn lower returns than stocks over time. As a result, your savings won’t grow enough to keep up with the pace of inflation. Even if you get back in the stock market, you could miss out on gains if you don’t time it right. (As you may have heard, you can’t time the market.)
Tapping your retirement accounts early
Nearly a quarter of Gen Xers who participate in a workplace retirement plan have borrowed from their account, according to the Schroders survey, often dipping into their plans to pay for emergencies or manage rising living expenses.
IRS rules allow 401(k) account holders to borrow up to 50 percent of their vested balance or $50,000, whichever is less. The loan must be repaid with interest. Any unpaid balance is considered a withdrawal and is taxed at your regular income tax rate, plus a 10 percent early withdrawal penalty if you’re younger than 59½.
Although the interest you pay on the loan goes back into your account, the borrowed funds miss out on market gains, Cooper says. “Raiding your retirement plan is an enormous setback that is very difficult to get over,” he says.
Build an emergency fund: You’ll be less likely to dip into your retirement account if you set aside cash for unexpected expenses. Financial planners typically recommend amassing an emergency fund to cover three to six months’ worth of expenses. Having a percentage of your paycheck automatically deposited into a savings account can help ensure your rainy day fund actually gets funded.
If you don’t have a sufficient stash of cash when an emergency strikes, Cooper recommends getting a secured loan rather than borrowing from your retirement account. Secured loans are backed by collateral, such as a vehicle or home, and typically have lower interest rates than personal loans or credit cards.
If you do borrow from your 401(k), Cooper recommends boosting contributions to your account once you’ve paid back your loan to make up for lost ground. You can contribute up to $24,500 to a 401(k) in 2026, plus an additional $8,000 for most workers age 50 or older. For those ages 60 to 63, these “catch-up contributions” can be even larger: up to $11,250.
Carrying too much debt
Gen Xers have a median nonmortgage debt of $26,207, the highest of any generation, according to a 2025 LendingTree study. And it’s putting their financial future at risk: Half of Gen Xers surveyed by insurance company Allianz Life in 2024 said nonhousing debt is limiting their retirement savings.
Make debt repayment a priority: Review your spending to identify nonessential expenses you can cut and bills you can lower to put more money toward reducing your debts. If you’re carrying a balance on more than one credit card, focus on paying off the card with the highest interest rate first to save the most money on interest.
Undermining your finances to support others
Generation X makes up a large share of the Sandwich Generation, middle-aged and older adults balancing the financial demands of supporting both children and aging parents. Eckels says many find themselves redirecting income that could go into retirement accounts to cover college tuition or help adult children get on their feet, or reducing work hours to care for aging parents.
“We tend to prioritize everyone over ourselves,” says Eckels, who is a Gen Xer herself.
Put your financial needs first: Unless your nest egg is already large enough to support you in retirement, saving for your children’s higher education should not be your top priority, Eckels says: “You can get loans for college but not retirement.”
If your parents need financial support, she suggests looking for ways to share the responsibility rather than shouldering it on your own. Ask other family members to contribute their time or pitch in financially, and explore resources in your community, such as adult day care programs, that could mitigate the need for costly in-home care.
Not planning for longevity
Nearly half of Gen Xers report they want to live to 100, according to Corebridge Financial’s 2025 Retirement and Longevity Survey, but 72 percent fear they’ll run out of money.
“The fact is, people are living longer and longer,” Eckels says. “You need to plan to live longer.”
Plan for a long life: Longevity planning might mean working longer so you can continue building your next egg and delay claiming Social Security.
The oldest Gen Xers will qualify for Social Security retirement benefits in 2027, when they turn 62, but if they claim then, they’ll receive 30 percent less than if they had waited until 67, their full retirement age. After that, payments increase by another 8 percent for every year you wait until age 70, when you can claim your maximum benefit.
Another important consideration: Living longer increases the chance that you’ll need long-term care. About 80 percent of adults 65 and older will require some long-term care, according to the Center for Retirement Research at Boston College. Consulting firm Milliman calculated that, on average, 65-year-olds should have $135,000 set aside for future long-term care needs.
Consider looking into long-term care insurance or a hybrid life insurance policy that includes long-term care benefits. Without a plan to pay for care, Gen Xers might have to rely on their children for care, hurting their kids’ prospects for a comfortable retirement, Eckels says.
The key takeaways were created with the assistance of generative AI. An AARP editor reviewed and refined the content for accuracy and clarity.
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