MW This is Generation X's biggest retirement worry - and it's not money

By Richard Eisenberg

The 'slacker' generation is jaded and anxious

You might think the biggest financial worry for Generation X (the 65 million Americans ages 45 to 60) would be not having enough money saved for retirement.

Turns out, it isn't.

Healthcare costs are far and away their biggest challenge, the survey of 450 Gen Xers by the Retirement Coaches Association found. This expense will likely continue challenging them into retirement, just a few years away for many of the oldest of this generation.

"For our generation, healthcare was cheap for a long time, especially if you worked. Now, it's astronomical," said Bob Laura, a self-employed financial adviser and chief executive of the Retirement Coaches Association.

Read: Why it's harder for Generation X to save for retirement than it was for baby boomers

$33,000 a year for health insurance?

One 60-year-old who completed the Gen X survey told Laura he's paying $33,000 a year for health insurance for his family.

As part of Generation X, Laura, 53, and his wife Amie, 49, can relate. They pay $1,200 in monthly health insurance premiums and are on the hook for a $14,000 annual deductible.

"It's alarming," said Amie Laura.

"Health costs are the number one expense in retirement and it's the biggest unknown," said Alan Moore, CEO of XY Planning Network, a network of financial advisers for Generation X and millennials. "You never know how much you're going to need in any given year. I think folks are absolutely right to be concerned."

An April 2025 West Health/Gallup survey found that 11% of people aged 50 to 64 are now unable to afford or access quality healthcare and have recently been unable to pay for needed care and medicine, up from 8% in 2021. The researchers call them "cost desperate." By comparison, just 4% of Americans 65+ are cost desperate.

This worry isn't misguided.

"Gen X is kind of caught in a perfect storm where they have rising healthcare costs, debt and they're [generally] sicker than their parents were," said Tim Lash, president of West Health Policy Center. "All of these things contribute to a pretty dire situation for them."

An American Journal of Epidemiology study noted worsening mortality and morbidity rates for Generation X. This cohort is experiencing substance abuse, mental-health related issues and a slowdown in progress for heart disease mortality, the researchers fund.

Generation X "may be experiencing larger per-capita increases in the incidence of leading cancers than any prior generation born in 1908 through 1964," a Journal of the American Medical Association investigation by the National Cancer Institute found. "On current trajectories, cancer incidence could remain high for decades."

Read: Generation X is ready for senior living. Here's what they want.

Rising health concerns and rising costs

Carlie Ransom, 47, a financial adviser at Equal Path Investments in Tacoma, Wash., specializing in assisting this age group, said she's hearing clients and friends starting to talk about retirement because of their health problems.

"In the last few months, two of my best friends have gotten double mastectomies," said Ransom. "And when you get sick, you think a lot more about what's the plan ahead, where am I heading?"

Ransom added that a major financial concern for Generation X is that health insurance often doesn't pay for the kind of healthcare they want.

"Maybe what we really need is meditation, exercise, acupuncture, massage. Almost none of that is covered. And that's how Gen X takes care of themselves. I think that's why Gen X is so worried about healthcare."

Generation X, "is really realizing their best asset isn't their 401(k), it's their health and protecting it," said Robert Laura. "Any loss of that and they just see the dollars racking up."

For the past few years, medical care prices have outpaced inflation overall - up 3.1% over the past 12 months vs. 2.3% for inflation in general.

And projections look pretty dismal for coming years. Personal health costs are expected to rise between 5% and 5.7% through 2032, according to a June 2024 study from analysts at the Centers for Medicare and Medicaid Services.

Although Medicare pays about two-thirds of medical costs for people over 65, Milliman's Retiree Health Cost Index says the average, healthy, 65-year-old retiring in 2024 would need $188,000 to $207,000 saved for lifetime health care expenses if they have Original Medicare, Medigap and a Part D prescription drug plan.

The anticipated savings amounts needed are lower - $86,000 to $96,000 - with a private insurer's Medicare Advantage plan plus a Part D plan.

Then there's the cost of protecting yourself against the enormous costs of long-term care (which Medicare typically doesn't cover). A long-term-care insurance policy costs roughly $5,000 to $6,300 a year for a 55-year-old couple; $7,000 to $8,100 for a 65-year-old couple.

That assumes the couple won't be denied coverage; about one third of applicants in their early 60s are turned down, according to the American Association for long-term-care insurance.

When they do retire, few Gen Xers can expect to receive retiree health benefits from their employers. This benefit has gone the way of pensions, another thing most won't receive when they retire.

Only 21% of large employers offered retiree health benefits in 2023, down from 66% in 1988, according to a study by the KFF health research organization. "Retiree health benefits appear to be heading toward extinction," the report said.

How Generation X has saved for retirement

A stockpile of retirement savings can go a long way toward paying health expenses in retirement for Gen Xers. On that score, despite what you may have heard, Generation X is doing OK.

"The news about retirement savings is generally good for Gen X," said Gerri Walsh, president of FINRA Investor Education Foundation, which published "How Gen X Compares Financially to Other Generations: Doing Alright but Feeling Bad" last fall.

"Over six in 10 Gen Xers have some type of retirement account. The vast majority of them are actively contributing and few are withdrawing assets," Walsh added. "When compared to other generations' retirement savings, Gen Xers are faring better than younger generations and comparable to boomers."

So, why are they feeling bad? Just 25% of Gen Xers FINRA surveyed said they're satisfied with their financial situation, compared with 44% of boomers.

Read: This is America's 'magic number' for retirement - and it's lower this year

Why the high anxiety?

"Nearly 60% of Gen Xers say thinking about their finances makes them anxious, much higher than 41% of boomers," said Walsh.

Gen Xers are tense partly because many have oppressive debt loads, especially student loans. Nearly 40% FINRA surveyed said they have too much debt; over 20% have been contacted by a debt collection agency, more than boomers or Generation Z, who were born between 1997 and 2012.

Gen Xers are also more likely than boomers, born between 1946 and 1964, to carry credit-card balances, make only the minimum payments on their cards and pay credit card late fees, FINRA found.

In the Retirement Coaches Association survey, a striking 74% of Gen Xers said it's more difficult for them to retire than previous generations.

The Lauras attributed that belief to Gen Xers' paucity of pensions and anticipated caregiving burdens for parents and adult children.

"We don't have the same amount of sibling support to care for an aging parent," said Amie Laura. "It's a very different generation than my grandparents on both sides who all had five to seven kids."

The predicted longer lifespan of Generation X will also require more years to make retirement savings last, than previous generations, and to pay for rising health costs as their medical needs grow.

In a recent Nationwide survey, 81% of Generation X said that if they knew they would live to 100, they would be concerned about outliving their savings.

Plus, some Gen Xers have doubts about whether they'll receive their promised benefits from the U.S. government.

A jaded generation

The Social Security trust fund trustees expect the program won't be able to pay full benefits starting in 2033, when the oldest Gen Xers will turn 68; the Medicare Hospital Trust Fund is anticipated to run short in 2036, six years after the oldest Gen Xers become eligible.

Robert Laura calls Gen X jaded and skeptical. "The inclination is, 'Well, we're not going to get Social Security. What else are they going to take away?'"

Retirement planning advice for Gen X

Ransom's advice to her fellow Gen Xers: "If you start planning for retirement now, it's not too late."

In fact, starting this year, people aged 60 to 63 are now allowed to make "super catch up" contributions to their retirement plans.

For 401(k) and 403(b) plans, they're permitted to put in up to $11,250 more than others this year and those with Simple IRAs can stash up to $5,250; those figures will be indexed for inflation.

Gen Xers planning to work in retirement should consider employers who provide health benefits to part-timers such as JP Morgan Chase $(JPM)$, Costco $(COST)$, Lowe's $(LOW)$, Staples, Starbucks $(SBUX)$, Home Depot $(HD)$ and Trader Joe's.

"One of the trends coming for Gen X is there's going to be more employers who offer healthcare benefits to part-time employees," Robert Laura said.

-Richard Eisenberg

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May 15, 2025 17:00 ET (21:00 GMT)

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