Ben Stiller, Lisa Loeb, Winona Ryder, Janeane Garofalo and Ethan Hawke attend “Reality Bites” 25th Anniversary.
(Image credit: Theo Wargo/Getty Images for Tribeca Film Festival)
Reality does kind of bite for Gen X, the generation that grew up watching music videos on MTV. Now nearing retirement, they are closely monitoring their 401(k) balances to see if they’re on track to retire.
Born between 1965 and 1980 and ranging in age from 46 to 61, Gen Xers are the first generation of American workers to rely on their own 401(k) savings to fund the bulk of their retirement, rather than on traditional pensions.
Gen X, dubbed the “sandwich generation” due to the pressure of supporting their kids while also caring for aging parents, has faced financial challenges along the way. They lived through the 2000 dot-com stock bust, the 2008-2009 financial crisis, the COVID pandemic in 2020, and the 2022 inflation scare. Today, Gen Xers’ 401(k) balances are being pushed lower by soaring energy prices and economic uncertainty caused by the U.S. war with Iran.
Sign up for Kiplinger’s Free Newsletters
Profit and prosper with the best of expert advice on investing, taxes, retirement, personal finance and more – straight to your e-mail.
Profit and prosper with the best of expert advice – straight to your e-mail.
Now, with Gen Xers nearing retirement, the size of their nest eggs is growing in importance, and they are falling short of the mark. Americans think the “magic number” for a comfortable retirement is $1.46 million, up $200,000 from 2025, according to Northwestern Mutual’s “2026 Planning & Progress Study” released on April 1, 2026.
“The new ‘magic number’ reflects a convergence of factors — from persistent inflation and longer life expectancies to uncertainty about the future of Social Security,” said John Roberts, chief field officer at Northwestern Mutual.
What is the average 401(k) balance for Gen X?
So, has the sandwich generation saved anything close to the magic number? The average Gen X 401(k) balance is $222,100, according to Fidelity Investments’ fourth-quarter 2025 analysis of its 24.8 million plan participants. Only Baby Boomers, who’ve been saving much longer, have larger balances ($270,800). Similarly, the average account balance of someone in their 50s — which constitutes the largest cohort of Gen X savers — is $246,700, Fidelity data show.
|
Generation |
Average 401(k) Balance |
|---|---|
|
Baby Boomers |
$270,800 |
|
Gen X |
$222,100 |
|
Average |
$146,400 |
|
Millennials |
$83,700 |
|
Gen Z |
$17,900 |
Source: Fidelity 2025 Q4 Retirement Analysis.
While the average Gen Xer has nearly a quarter of a million dollars saved, that’s far less than the $1.46 million Americans say they’ll need to retire comfortably.
There is some good news and not-so-good news for Gen X in the latest account balance data.
On the plus side, Gen X workers, on average, are socking away 15.4% of their pay annually (including their company’s matching contribution), topping Fidelity’s suggested 15% annual savings rate. In the final quarter of 2025, Gen X increased their 401(k) contributions by 10.7%.
Gen Xers who have been saving in the same retirement account for the past five, 10, and 15 years have also accumulated more money in their 401(k)s than any other generation, according to Fidelity’s 4Q25 data.
For example, Gen X savers who invested in the same 401(k) for 15 years have balances of nearly $700,000, roughly $80,000 more than the average 401(k) balance across all generations, at $617,600.
“The consistency so many Americans show in maintaining responsible savings behaviors and keeping a long-term perspective will serve them well in retirement,” said Sharon Brovelli, president of workplace investing at Fidelity.
Why many Gen Xers face a retirement savings shortfall
While there is no universal retirement number, Northwestern Mutual recommends following the “80% rule,” or aiming to replace about 80% of pre-retirement income.
That high hurdle is likely one reason why Gen Xers nearing retirement are the “least confident” of all generations in their retirement preparedness, according to Northwestern Mutual. In fact, one in five Gen Xers say financial challenges or concerns have already caused them to delay retirement, the insurer’s study found.
|
Think they will be financially prepared for retirement when the time comes (among non-retirees) |
Gen Z |
Millennials |
Gen X |
Boomers+ |
|
2026 |
58% |
55% |
49% |
55% |
|
2025 |
63% |
54% |
46% |
56% |
Source: Northwestern Mutual.
In another sign of financial stress, one in four (25.8%) Gen Xers has an outstanding 401(k) loan, the highest rate of any generation and well above the 19.4% average, according to Fidelity’s 4Q25 analysis of its 401(k) plans.
To estimate the size of the retirement shortfall the average Gen X saver faces, let’s see how they are faring using Fidelity Investments’ savings rule of thumb. Fidelity says savers should have six times their salary saved by age 50 and eight times their salary socked away by age 60.
The analysis by Northwestern Mutual found that only 29% of Gen Xers have saved six times or more of their salary. And just 19% have saved eight times or more of their salary.
|
Of those with retirement savings |
All |
Gen X |
Boomers+ |
|
Less than 1x my income |
15% |
12% |
7% |
|
1x |
8% |
6% |
5% |
|
2x |
13% |
12% |
6% |
|
3x |
15% |
14% |
10% |
|
4x |
7% |
10% |
7% |
|
5x |
8% |
10% |
7% |
|
6x |
4% |
6% |
4% |
|
7x |
4% |
4% |
5% |
|
8x |
4% |
3% |
5% |
|
9x |
2% |
3% |
3% |
|
10x |
4% |
4% |
8% |
|
More than 10x my income |
10% |
9% |
21% |
|
Not sure |
7% |
7% |
11% |
Source: Northwestern Mutual.
One reason why Gen X is behind in their retirement savings is that they got a late start. They didn’t start saving until age 32, on average, which is 4 years later than Millennials and 10 years later than Gen Z, according to Northwestern Mutual. The late start means they have had fewer years to save and benefit from the power of compounding.
Moreover, with life expectancies on the rise, half of Gen X savers say it is likely that they will outlive their savings. “The prospect of a longer retirement comes with additional financial pressures,” said Bruce Palmieri, partner and wealth management advisor at Northwestern Mutual.
Those savings figures suggest that most Gen Xers are facing a retirement funding shortfall. Still, the fact that half (49%) of Gen Xers have saved at least four times their current annual salary is reassuring, as that is an improvement over last year, when only 41% said they had four times their salary saved. “They have made some progress,” the Northwestern Mutual study noted.
How Gen X can catch up on retirement savings
If you’re a Gen Xer reading this, there’s still likely time to get better prepared for retirement.
- Boost your savings rate. Beefing up a 401(k) plan starts with saving more, says Palmieri. To bolster your 401(k), spend less and funnel any extra cash you get via a raise or bonus to your nest egg. Younger Gen Xers still have 20 years until retirement, so there’s ample time for their contributions to grow. “The power of compounding interest will work on your side,” said Palmieri. “We recommend workers increase their savings every year.”
- Save enough to get your company match. Don’t leave a single penny on the table. Make sure you contribute enough to your 401(k) to receive your employer’s matching contribution.
- Take advantage of catch-up contributions. Gen Xers over age 50 should not only try to max out their regular 2026 401(k) contribution limit ($24,500), but also take advantage of the $8,000 catch-up contribution the IRS allows, Palmieri advises. And if you are a Gen X saver aged 60 or 61, try to also fund the additional “super catch-up contribution” of $3,250, which is available to Americans ages 60 through 63, thanks to a change in the SECURE 2.0 Act.
- Invest for growth. You won’t be able to fill the savings gap by putting your money into a low-interest savings account. You’ll need to invest in growth-oriented assets like stocks, which are more volatile but have historically generated higher returns. “Be as aggressive as you can be with every dollar,” said Palmieri. Younger Gen X savers, such as those with two decades until retirement, should have roughly 80% of their assets invested in stocks, says Palmieri. Those closer to retirement should allocate about 65% of their portfolio to equities.
- Downsize. If the savings gap is too big to close with 401(k) contributions, consider downsizing to a smaller home or moving to a less-expensive area of the country, adds Palmieri. “You can invest any freed-up home equity to help boost your retirement assets,” said Palmieri.
Finally, you could always delay retirement a year or two. That will allow you to avoid tapping your 401(k) for a few more years and enable your money to continue to compound. Earning a salary for a few more years and continuing to contribute to your 401(k) is another plus. “This strategy could make a several hundred thousand dollar difference over a number of years,” said Palmieri.