Gen X is getting squeezed from both ends. New research from Jackson National Life Insurance Company and the Center for Retirement Research at Boston College finds that supporting adult family members has become a recurring drain on retirement savings, with many pre-retirees pulling money from accounts or taking on debt to keep up.
The timing matters because this is not a one-off burden. Among pre-retirees surveyed, 34 percent said they had provided significant financial support to an adult family member over the prior decade, and those who did gave an average of $26,311. Looking ahead, 76 percent of those who had already helped expect to do it again in the next decade. That is why the search for a backward retirement approach for Gen X is growing now: the money meant for retirement is being pulled backward into family obligations before it can compound.
Gen X is not just carrying this load in the abstract. Thirty-six percent of Gen X respondents said they had provided significant support in the past decade, compared with 29 percent of baby boomers, and Gen X investors were nearly twice as likely as boomers to expect to give again. The study also found that Gen X gives to adult children, parents and other relatives at nearly identical rates, showing that the pressure is not coming from one family need but from several at once.
The damage shows up in the numbers that matter for retirement readiness. Pre-retirees who had provided significant family support had saved only 54 percent of what they were on track to need for retirement, compared with 66 percent for those who had not given support. Savings withdrawals were the most common funding method, cited by 59 percent of support givers, while 32 percent said they cut personal spending. Nearly one in five investors used a credit card to cover a family obligation, and those who had provided support carried mortgage balances about $70,000 higher on average, with almost half also carrying revolving credit card debt.
That is the part retirement planning often misses. Market swings and healthcare costs are built into most plans, but family obligations can quietly undo progress in ways many investors do not expect. Glen Franklin said Gen X investors face a collision of financial pressures that other generations have not experienced in quite the same way, because they are still building toward retirement while supporting family members on multiple fronts and doing so in ways that can quietly undermine that progress.
For Gen X, the question is no longer whether family help is part of the retirement picture. It already is. The sharper question is how much more of their future savings will be diverted before the next decade ends, because the study suggests most of those who have helped once will be asked again.
