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Generation X Members Have Retirement Work Cut Out For Them

According to a new study by the Pew Charitable Trusts, Generation X—the name given to those currently in their late 30s to late 40s—may be less prepared for retirement than the “Baby Boomers” now entering their golden years.

The report says Gen Xers suffered losses of 45% of median net worth between 2007 and 2010, a worse setback than for those born during the 20 years after World War II. Based on the report’s projections, typical Gen X members are on track to replace half of their pre-retirement income if they stop working at 65. But Baby Boomers born between 1946 and 1955 are poised to replace 82% of income, while those born at the tail end of the boom, between 1956 and 1965, are ready to replace 59%.

As a result, Gen Xers might have to take other steps, such as increasing savings and borrowing less, to help maintain a comfortable retirement.

A few other factors also are working against Generation X. This group bears the full brunt of the gradual change in the age for receiving full Social Security retirement benefits from age 65 to 67. Also, life expectancies are rising, so assets might have to last longer. And many Gen Xers will be relying on 401(k) plans, which generally don’t provide as much retirement income as traditional pension plans have done.

But don’t despair: You still have plenty of time to make up for lost ground. It will just require extra dedication.