Will Generation X miss out on the Great Wealth Transfer?

For Generation X, help may not be on the way. Research shows that Americans born in the 1960s and '70s are woefully unprepared for retirement — and they don't expect the Great Wealth Transfer to save them.

That's according to a new study by the international insurance firm Prudential, which questioned 2,000 pre-retiree Gen Xers about their nest eggs. More than one third — 35% — of the respondents said they had less than $10,000 in retirement savings. Even worse, 18% had no savings at all.

"They just plain need to save more," said Barbara Pietrangelo, a certified financial planner at Pruco Securities, Prudential's network of wealth managers.

One might expect an inheritance to help bail these Americans out. After all, baby boomers and the Silent Generation are expected to pass down $72.6 trillion to their descendants by 2045 as part of the Great Wealth Transfer, according to the research firm Cerulli Associates. And of all age groups, Generation X is expected to inherit the most — $29.6 trillion, by Cerulli's estimate, including $8.9 trillion by 2032.

But according to Prudential's study, Gen Xers don't see things that way. In fact, only a mere 12% of the respondents said they expect an inheritance to bolster their retirement income.

What could explain this pessimism? One possibility, Pietrangelo suggested, is that even if Gen Xers know how much wealth their parents have, they also know how it's being spent. And as they watch their parents pay for healthcare, rising living expenses and other costs, Generation X may not expect much to be left over for a bequest.

"I think in terms of the wealth transfer, some of the [Gen X] people are going to get money," Pietrangelo said. "But keep in mind, baby boomers are living longer … That generation may need money to pay for care as well."

This concern is well-founded. According to the Kaiser Family Foundation, U.S. spending on healthcare per capita is more than twice that of the average wealthy country. And these expenses rise as Americans get older — the average 65-year-old couple will need $315,000 in savings to cover medical costs in retirement, according to one study by Fidelity Investments.

Meanwhile, inflation has sent day-to-day expenses skyrocketing. Grocery prices, for example, were still rising at 7.1% year-on-year as of April — down significantly from their 13.5% jump in August, but still their highest rate of inflation since 2007.

Gen Xers are also concerned about how inflation will affect their own retirement. More than two-thirds — 68% — of Prudential's respondents said rising prices were hindering their ability to reach their savings goals. And 72% said inflation was making it hard to do any long-term planning.

Read more: Gen X and retirement: Not a pretty picture

The upshot of all these concerns is that most Gen X Americans don't expect to retire on time. Nearly half — 47% — said they'll retire later than they'd planned, and 9% said they don't expect to retire at all.

To be fair, Generation X is far from the only age group facing this problem. A 2022 study by Goldman Sachs found that 34% of millennials, 27% of Generation Z and 53% of working baby boomers had also fallen behind on their retirement savings.

But some wealth managers say their Gen X clients are particularly off-track.

"I specialize in Gen X clients, and many, many of them are woefully unprepared," said Liz Windisch, the founder of Aspen Wealth Management in Centennial, Colorado. "Most don't plan to receive an inheritance, or, if they do, they probably won't receive it until they are in their 70s, and I don't recommend anyone retire while counting on a windfall a decade or more later."

So how can Gen Xers catch up? For those who are still working at a job with a 401(k), one possible solution is to raise their contribution rates. 

"Oftentimes they'll have a retirement plan at work, and a lot of the newer plans might match 3%," Pietrangelo said. "So they're putting in 3% to get a match, but saving 6% is not enough to get them to a comfortable retirement. So they really need to be saving more."

Another strategy is to work part-time during retirement. Many Gen Xers are open to this — in fact, 40% of Prudential's respondents said they planned to do so — and some wealth managers encourage it.

Read more: What makes Generation Z such good retirement savers?

"My message to folks who don't feel financially stable is that earning a small or moderate amount of income during retirement years can make a meaningful difference in supporting their lifestyle," said John Corron, a certified financial planner at Monument Group Wealth Advisors in Concord, Massachusetts. "They may not have to stick with higher paying jobs that they don't enjoy if they have the opportunity to work part-time doing something they enjoy for a longer period."

The most important point, Pietrangelo said, is that Gen X Americans who have fallen behind are not helpless. If they take action, preferably with the help of a financial advisor, they can still improve the quality of their golden years.

"If they would just make a plan, sit down and figure out what they want to do, they're in much better shape than they think," Pietrangelo said.