As far as finances go, Rose Cronin is in better shape than most Americans her age.
The 40-year-old has been socking money away into a retirement plan since she got her first job out of college. An insurance quality evaluator from New York's Long Island, Cronin also has two pensions (one from a former company). Her husband, Bill, also has a pension from his teaching job.
They've always had an emergency fund. And they set up college savings for their kids, ages, 5 and 7, soon after they were born. "We're more prepared than most," said Cronin.
Still, she's worried about their retirement. "I know we're going to have to set aside more or we won't have enough," she said. "It makes me nervous."
That's an increasingly common concern among members of Generation X as they edge closer to their 50s.
Much of the research on retirement readiness has focused on baby boomers, who are turning 65 at a rate of 10,000 a day and seem woefully ill-prepared as a group. (A GAO analysis released this week found that among households with members age 55 or older, nearly 29 percent have no retirement savings or pension plan.)
(Source: Northwestern Mutual)
But in a new multigenerational survey by Northwestern Mutual, Gen X respondents reported the highest levels of financial insecurity of the four generations. Their number one concern: having enough savings to retire comfortably. Two-thirds said they expect to have to work past traditional retirement age out of necessity, and 18 percent believe they'll "never retire." (Tweet This)
"There's an increasing shifting of financial responsibility onto individuals' shoulders," said Rebekah Barsch, vice president of financial planning at Northwestern Mutual. "And Generation X will be the first generation to really feel the effect of that."
And without some major changes, advisors say, it could be painful.
Gen X, which includes those born between 1965 and 1980, is the first generation to experience the shift from traditional pension plans to 401(k)s and individual retirement plans.
And they'll hit retirement age just as the Social Security program's trust fund is projected to run dry, around 2033. Not surprisingly, a whopping 80 percent of Gen Xers in the Northwestern Mutual study said they don't expect Social Security to take care of their needs. (The study was conducted by Harris Poll and included responses from 813 Gen X members.)
"It used to be, keep your nose down and keep working and you'll be taken care of," said Andrew W. Ferraro, a certified financial planner with Strategic Wealth Partners in Columbus, Ohio. "For Gen X, it shifted to: Keep working hard, but it's on you to take care of your retirement because it's not our responsibility to take care of you anymore."
Having the discipline and foresight to set money aside throughout your career is challenging enough; but with longer lifespans and growing health care expenses, even estimating how much you'll need to fund your retirement can be a challenge. In the Northwestern Mutual survey, 34 percent of Gen Xers said they have no idea how much income they need to retire.
There are general benchmarks to guide them, but most savers are falling short. The Center for Retirement Research at Boston College, for example, estimates that in order to maintain their lifestyle in retirement, households need about 70 percent of pre-retirement income on average.
Under current laws, Social Security can replace about 36 percent of retirees' final inflation-adjusted earnings. In order to make up the difference, the center estimates savers need to set aside about 15 percent of their pay over the course of 30 years to retire comfortably.
But only 12 percent of Gen Xers are putting more than 15 percent of their income into savings, according to a Bankrate survey released in April. Nearly 4 in 10 were putting aside 5 percent or less of their incomes.
For them, it could be particularly challenging to catch up. The Center for Retirement Research estimates that those who start saving at 45 and hope to retire at 65 will need to save a whopping 27 percent of their income each year. That drops to 10 percent, though, if they can put off retirement until they're 70.
That may be more realistic for many Gen Xers, as they're often facing more immediate financial needs. Many are not just taking care of themselves but children, and sometimes aging parents, as well. And they tend to carry more debt than other generations—in particular, student loan balances. Those in their 30s and 40s have the highest average student loan debt among borrowers, according to the Federal Reserve.
"Aside from weathering a number of economic cycles, this group is juggling home mortgages, educational debt and lifestyle needs," said Barsch. "Figuring out how to plan for the future can be daunting."
Indeed, another recent survey by the New York chapter of AARP found that Gen Xers are even more nervous than their predecessors about funding their retirements. More than 6 in 10 said they're somewhat or very anxious about having enough money to live comfortably once they retire, and a quarter said they weren't confident they would ever be able to retire.
Cronin, who participated in the survey, and her husband each put about 5 percent of their income into retirement accounts annually. "But we know that's not going to be enough," she said, even with their pensions.
The challenge is that they're simultaneously paying off more than $30,000 in student loan debt and saving money for their kids' education. "I'd put more money aside in our retirement if I didn't have that debt, but it's there," she said.
She and her husband are diligently chipping away at the loan balance and hope to have it paid off in the next three to five years. Then, she said, they can start boosting their retirement savings—assuming other major expenses don't crop up.