Jeanne Thompson says Gen Xers nearing retirement keep reaching for the same answer: “One more year.” For the 65 million Americans born between 1965 and 1980, that delay now collides with a harder task — turning 401(k) savings into income when retirement starts.
Only 14% of Gen X workers have a traditional pension, compared with 56% of baby boomers. Just 26% of Gen Xers work with a financial advisor, and the average 401(k) balance for the generation is $215,600. For Gen Xers who continuously contributed for 15 years, the average balance rises to $648,800.
Jeanne Thompson and the 401(k) shift
Thompson, a Senior Retirement Consultant for LPL Financial, retired four-and-a-half years ago after more than two decades in the 401(k) industry. She describes “One more year” as two questions in disguise — one about money, one about identity. Gen X is the first generation whose retirement rests on a 401(k) rather than a pension, and that leaves no pension-eligible retirement date to organize the exit.
That changes the planning sequence. Instead of waiting for a pension check to start, Gen Xers have to decide how to convert savings into income, whether through annuitizing, a bucket strategy, staying in plan, rolling to an IRA, converting to Roth, or starting Social Security. Those are different ways to handle decumulation, which means drawing money down for the first time without a paycheck refilling it.
Decumulation after decades of saving
Thompson says retirement can feel like “a threat to their identity — and a challenge unlike any they’ve faced: turning decades of savings into an income stream.” She also says that “that 401(k) balance, large or small, never reads “this is enough.””
That gap explains why many Gen Xers can spend years saving and still hesitate at the finish line. The balance may be substantial, but it does not automatically tell a worker when the monthly income will cover spending. For Gen X, the challenge is not just how much was saved. It is how to turn that lump sum into a steady paycheck replacement.
What Gen Xers must decide
The practical choices now sit in front of the generation’s retirement window. A worker can keep assets in a plan, move them to an IRA, convert to Roth, or start Social Security, but the right mix depends on when income needs begin and how long the money must last. Thompson’s message is blunt: retirement for Gen X is less about crossing an age line than about choosing an income structure.
That leaves the most immediate task in plain view. Gen Xers who have treated retirement as a future milestone now have to treat it as an income design problem, with fewer pensions, fewer advisor relationships, and no single date that tells them the answer.
