Gen X Women’s Retirement Goals
As retirement planning continues to evolve, financial attitudes and goals reflect the changing dynamics of generational priorities, economic realities, and cultural influences. A striking example of this can be found in the findings from Northwestern Mutual’s Planning & Progress Study, which reveal that Gen X women’s retirement goal is more than $2 million! They believe this is needed to retire comfortably—a number that significantly surpasses the retirement savings goals of other generations. In contrast, Baby Boomer+ women target a substantially lower figure, aiming for approximately $902,000.
This stark difference highlights shifting financial expectations and raises important questions about the underlying beliefs and realities that drive these goals.
“To close the confidence gap and help Gen X women achieve their retirement goals, financial institutions must offer comprehensive, personalized, and realistic retirement planning that addresses their unique challenges and needs,” says Joanne Farace, Senior Vice President Investments David Lerner Associates. “This presents an opportunity to lead the conversation on the future of women’s retirement planning, providing expert guidance in helping Gen X women achieve their financial goals and retire confidently.”
The Financial Realities Facing Gen X Women
Gen X women—born between 1965 and 1980—occupy a unique space in the financial landscape. Unlike Baby Boomers, who have largely retired or are on the cusp of doing so, and Millennials, who are still a few decades away from retirement, Gen X women are in their prime earning years. This period brings heightened financial pressures, from supporting aging parents to paying for children’s college education, all while trying to save for their retirement.
Many Gen X women also face the compounding challenge of wage inequality. Historically, women in the workforce have earned less than their male counterparts. Though wage gaps have narrowed, the cumulative effect of these disparities can significantly impact retirement savings over time.
Moreover, inflation and rising healthcare costs continue to erode purchasing power, making the $2 million mark more realistic when factoring in these unpredictable economic variables. For Gen X women, the higher savings goal reflects the reality of living longer, balancing more financial responsibilities, and needing a cushion against economic uncertainties.
Why Do Gen X Women Aim Higher?
Several factors contribute to the heightened retirement savings goals among Gen X women:
- Longer Life Expectancy: Medical advancements mean women live longer, requiring more funds to sustain a comfortable lifestyle throughout their retirement. According to the Centers for Disease Control and Prevention (CDC), women, on average, live almost 6 years longer than men, which compounds the need for additional savings to cover extended healthcare and living expenses.
- Healthcare Costs: Gen X women are acutely aware of the rising costs of healthcare, especially long-term care, which can quickly deplete retirement savings. A 2023 Fidelity study estimated that a 65-year-old woman could need around $157,500 to cover healthcare expenses in retirement. Preparing for such hefty costs makes the $2 million target more understandable.
- Economic Uncertainty: Gen X women have lived through significant economic upheavals, from the dot-com bubble in the late 1990s to the financial crisis of 2008 and, most recently, the COVID-19 pandemic. Each of these events has eroded confidence in the stability of financial markets, prompting a more conservative and cautious approach to retirement planning.
- Lagging Confidence: According to the same Northwestern Mutual study, only 40 percent of Gen X women believe they will be financially prepared to retire despite their high retirement goals. This uncertainty stems from the volatility of the markets, wage stagnation, and their broader financial responsibilities. The goal of $2 million may be more of a buffer than an aspiration, a necessary hedge against future unpredictability.
How Does This Compare to Other Generations?
The financial attitudes of Gen X women stand out compared to other generations, particularly Baby Boomers and Gen Z.
- Baby Boomers: For Baby Boomer+ women, the average retirement goal is significantly lower—around $902,000. This perhaps reflects different economic environment during their prime earning years. Boomers benefited from periods of rapid economic growth, stable pensions, and lower housing costs, which may explain their lower expectations for retirement savings. Additionally, many Boomers retired or planned to retire before the full impact of rising healthcare costs and inflation became apparent.
- Gen Z: On the opposite end of the spectrum, Gen Z women display a surprising level of confidence in their retirement readiness, with 60 percent of them believing they will be financially prepared to retire. This optimism is likely tied to the fact that they are just beginning their careers and are more likely to take advantage of modern financial planning tools and side hustles. Gen Z women are also more likely to prioritize financial education, as they have grown up with easier access to online financial literacy resources.
The marked contrast between the Gen Z’s confidence and Gen X’s cautiousness raises questions about the different economic realities these groups face. Gen Z women may feel more secure due to their long runway toward retirement, whereas Gen X women, facing immediate financial demands and historical wage inequalities, must plan more conservatively.
Closing the Confidence Gap for Gen X Women
The most important factors in helping GenX women reach their retirement goals are:
- Increased Financial Literacy: Understanding financial concepts like risk and return, diversification, compound interest, and the different investment options available increases the probability of reaching retirement goals.
- Tailored Financial Planning: Customized financial strategies that account for wage gaps, career interruptions (especially due to caregiving responsibilities), and healthcare costs can give Gen X women a clearer picture of what they need to retire comfortably.
- Long-Term Investment Strategies: Given the economic volatility experienced by Gen X, it is key to help them develop resilient, long-term investment portfolios that hedge against market downturns and inflation is key.
- Holistic Retirement Planning: Beyond investments, GenX women must plan for unexpected healthcare expenses, long-term care, and estate planning, ensuring they are financially prepared for every retirement phase.
The ambitious retirement savings goal of over $2 million among Gen X women reveals a generation that has internalized the financial realities of their time—longer life spans, economic uncertainty, and the growing cost of healthcare. Their cautious outlook contrasts sharply with the optimism of younger generations, particularly Gen Z, but reflects a more grounded approach to financial planning.
The $2 million figure is not just a number but a reflection of the adaptability, resilience, and foresight that define this generation.
Material contained in this article is provided for information purposes only and is not intended to be used in connection with the evaluation of any investments offered by David Lerner Associates, Inc. These materials are provided for general information and educational purposes based upon publicly available information from sources believed to be reliable– we cannot assure the accuracy or completeness of these materials. The information in these materials may change at any time and without notice.