Gen X investors face a backward retirement approach for Gen X as family support keeps drawing from the money they need for later life. New research from Jackson National Life Insurance Company and the Center for Retirement Research at Boston College found that 36 percent of Gen X respondents gave significant financial help to a family member over the past decade.
That help is broad, not narrow. The study says Gen X investors give to adult children, parents and other relatives at nearly identical rates, and 76 percent of those who had given before expect to do it again in the next decade.
Glen Franklin on Gen X pressure
Glen Franklin, assistant vice president of research, RIA and lead generation strategy for Jackson National Life Distributors LLC, said Gen X investors face a collision of financial pressures that other generations have not experienced in quite the same way. He said, “They are still building toward retirement while supporting family members on multiple fronts and doing so in ways that can quietly undermine that progress.”
He also said, “Retirement plans are designed to withstand market dips, inflation and rising healthcare costs.”
The research puts numbers on that strain. Pre-retirees who had provided significant family support had saved 54 percent of what they were on track to need for retirement, compared with 66 percent for those who had not given support. Those who gave significant financial support averaged $26,311 over the prior decade.
Jackson National Life Insurance Company and Boston College
Support did not come from one channel. Savings withdrawals were cited by 59 percent of support givers as the most common funding method, while 32 percent said they cut personal spending. Nearly one in five investors surveyed used a credit card to cover a family obligation.
Gen X respondents were more likely than baby boomers to cover family support through credit cards, personal loans or retirement account withdrawals. Baby boomers more often tapped savings or investment accounts. Gen X respondents were also nearly twice as likely to expect to give again.
Retirement savings and debt
The study links family support to higher debt loads as well as lower savings. Investors who had provided family support carried mortgage balances about $70,000 higher on average than those who had not, and almost half of those investors carried revolving credit card debt.
For readers facing the same squeeze, the practical takeaway is direct: recurring help for adult family members can leave a retirement plan weaker even before market losses or healthcare costs enter the picture. The study does not give a separate fix, but it shows the burden can stack up across a decade and keep repeating in the next one.
