Generation X (roughly born between the 1965 to early 1980s) is approaching retirement age. The first batch of Generation X was born in January 1965, around 59 and a half years old, able to withdraw money from retirement accounts like 401(k) without penalty. However, this generation is facing an impending retirement crisis, with challenges that are extremely daunting.
Ultimately, this financial pressure may lead to a concerning new trend for the “Slacker Generation”: the emergence of more and more “silver squatters.” Due to their inability to afford a traditional retirement lifestyle, they may end up moving in with adult children or other family members.
According to a survey by Prudential Financial, the median retirement savings for the age group of 55 is only $50,000, much lower than the recommended amount for a comfortable retirement.
What are the reasons behind this? Generation X faces numerous obstacles on the path to retirement.
Due to short-term economic demands and financial pressures, Generation X finds it challenging to save for the future. Research from Corebridge Financial, a financial company that offers retirement, insurance, and asset management services, found that two-thirds (67%) of respondents see inflation as one of their primary challenges, while half (51%) cite rising medical costs. Additionally, 58% mention an increase in daily expenses, and 26% say that non-mortgage debt has risen in the past three years.
Moreover, since the 1980s, most Americans have transitioned from traditional pensions to 401(k) plans, with Generation X being the first group to primarily use 401(k) as a retirement tool. 401(k) shifts the responsibility to individuals: they decide how much to save, how to invest, and how to withdraw money upon retirement. In other words, this “do-it-yourself” approach has been described as “unreliable” by retirement expert Teresa Ghilarducci.
Adding to the complexity, many in Generation X are referred to as the “sandwich generation” as they have to care for both children and elderly parents simultaneously.
Mark Hamrick, a senior economic analyst at Bankrate, mentions in an interview with Fortune magazine, “For those caught between caring for young people and caring for elderly individuals or family members, the dual burdens exacerbate their own financial issues.”
Due to financial difficulties, more and more from Generation X are turning to family for help. An estimated one-fourth of those aged 55 hope their children will support them in the future, yet many have not discussed this topic with their families.
This has led to the phenomenon of “silver squatters” – individuals who start living with family members and rely on them financially and for housing. For example, an adult may need to move into their parents’ basement. This can have significant impacts for many.
When elderly parents move in with adult children, it may strain the parent-child relationship and limit each other’s independence. Additionally, children may need to share their parents’ living expenses or even adjust housing arrangements to accommodate their parents’ needs.
Conversely, elderly parents moving in with their adult children may lead to feelings of dependence, loss of freedom, and even a lack of privacy. Furthermore, maintaining social connections and continuing to participate in preferred activities becomes more challenging.
The emergence of “silver squatters” is not just due to poor planning but also factors like inflation and reduced pensions.
The continuous rise in housing prices is making it increasingly difficult for retirees to afford their own housing. Many are forced to sell their homes and move to more affordable areas, resulting in multigenerational living situations. Furthermore, the shortage of affordable housing for the elderly exacerbates the issue, providing fewer choices for seniors.
However, the problems go beyond this. According to data from the World Economic Forum, in the United States, all generations lack financial literacy. Particularly according to a report by Prudential Financial, about half of Generation X has no retirement plan at all.
A study by the Nationwide Retirement Institute found that 72% of adults are worried that they will outlive their Social Security benefits, intensifying anxiety. Additionally, traditional pensions continue to decrease. Only 25% of Generation X has fixed income pensions, compared to 39% for early Baby Boomers (born 1946-1955) and 32% for late Baby Boomers.
Despite the seemingly grim situation, Generation X can improve their financial outlook in the following ways:
– Enhance financial knowledge: Participate in online courses and seminars on personal finance. Reading articles and books by reputable finance experts can be helpful. Joining local financial clubs like “Generation X Retirement Group” for support and advice is beneficial.
– Increase savings: Use budgeting apps to track daily expenses and identify areas for saving. Maintaining detailed financial journals and setting up automatic transfers to savings accounts can cultivate a regular savings habit.
– Consider part-time or side jobs: Supplementing income through part-time work based on skills and interests is effective. Online tutoring, freelance writing or consulting services related to your skills can be fruitful. Selling handmade crafts or second-hand goods on platforms like Etsy or eBay can also generate income.
– Delay Social Security benefits: The longer you delay claiming Social Security, the more money you receive per month, contributing to long-term financial security. If you outlive the average lifespan, you will receive more overall. This also helps avoid tapping into other retirement savings early and makes financial planning easier.
– Open communication: Having open discussions with family about retirement plans can alleviate stress and help everyone prepare in advance. The first step is organizing a family meeting dedicated to discussing financials and retirement goals. Sharing your plans and concerns can foster more open dialogue. Visual aids like charts and tables can help everyone understand your financial situation clearly, making discussions easier.
The emergence of “silver squatters” underscores the importance of proactive financial planning. By implementing the aforementioned measures, Generation X can still achieve a more comfortable and stable retirement life.
“Silver squatters” refer to Generation X individuals (born roughly between the 1965 to early 1980s) who cannot afford a traditional retirement lifestyle and need to rely on family or friends for housing. This trend is becoming more prevalent as many Generation X individuals face significant challenges in saving for retirement.
Several factors contribute to the difficulty Generation X faces in saving for retirement:
– Rising cost of living: Inflation surpassing growth in wages makes saving more challenging.
– Student loans: Student debt remains a significant expenditure for Generation X, reducing their disposable income.
– Shrinking pension plans: With traditional pensions decreasing, many in Generation X now rely solely on personal savings.
– Economic downturns: Events like financial crises and the COVID-19 pandemic severely impact retirement savings.
The appearance of “silver squatters” creates complex situations for many families and may lead to the following impacts:
– Intergenerational financial pressure: Adult children may face financial difficulties due to having to support their parents.
– Emotional stress: Resentment and conflicts may arise between parents and children as a result.
– Delayed life plans: Adult children may need to postpone plans such as buying a house, getting married, or having children.
Here are some strategies to help Generation X improve their retirement prospects:
– Utilize retirement accounts: Generation X should maximize tax-advantaged accounts like 401(k) and individual retirement accounts during their peak earning years. In 2024, those above 50 can contribute up to an additional $7,500 to their 401(k) accounts.
– Consider part-time or side jobs: Increasing savings or supplementing retirement income can be achieved through part-time work or developing side businesses related to skills and interests.
– Seek professional advice: Consult financial advisors to tailor a retirement plan to your specific needs.
– Evaluate housing choices: Consider downsizing or renting to lower housing expenses.
– Explore reverse mortgages: Reverse mortgages can provide extra income by utilizing the equity in your property each month, but be sure to understand the associated risks before applying.
– Communication with family: Openly discussing retirement plans with family members helps address future housing and care issues.
Addressing the issues of “silver squatters” requires communication and planning. Families can consider the following:
– Develop financial plans: Understand the economic status and goals of each family member and discuss them together.
– Set boundaries: Clearly expressing responsibilities and expectations in advance can reduce conflicts.
– Consider alternative living arrangements: Options like moving into assisted living facilities or cohabiting with others can be considered.
– Seek external support: Seeking help and advice from relatives, friends, or professional advisors can be beneficial.
The article was originally published on the Due Blog website, licensed for reprint by The Epoch Times: “Gen X’s Retirement Woes: The Rise of Silver Squatters.” The Epoch Times holds the copyright ©2025. The content represents the author’s views and opinions and is for general informational purposes only, with no intent for recommendation or solicitation. The Epoch Times does not provide advice on investments, taxes, legal matters, financial planning, real estate planning, or other personal finance matters. The Epoch Times does not guarantee the accuracy or timeliness of the content.