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They also take advantage of this fact, as 84 percent of workers offered a retirement plan taking advantage of it, compared to 81% of boomer and 71% of millennials. However, they contribute the smallest percentage of their salary to their plans – just 7% – the lowest contribution rate of the three cohorts. In addition, more than one quarter of Generation X respondents (27 percent) report that they have taken a loan or early withdrawal. That number for millennials is 20%. Finally, GenX has seen a lower annualized return on investments than their parents, and has had a lower savings rate that their parents.

Tom: Given these numbers, what is most important for those in the middle of their career to think about going forward?

Mellody: There are two big takeaways from these number that will help Generation X improve their retirement outlook, but let me first say this. The most important thing to remember for people in this age bracket is that you still have time to improve your lot. Do not give up, just because you haven’t started yet. If you fall into this cohort, you still have 15 to 20 years to make a difference!

Tom: Now, how do you do that?

Mellody: Well, I mentioned that Generation X has the lowest retirement plan contribution rate of any of the three I mentioned. That has to change. Increase your retirement contributions now! There are two good reasons to keep it high, and there are interrelated. First, you are likely in the midst of the best earning period in your life – take advantage of that. Second, when you do, you will also be shielding yourself from some taxes, because these contributions will not be taxed.

The second big takeaway here? Stop taking money out of your retirement account! While it may be tempting, you have to resist the urge. As I have said many times before, your retirement accounts should be sacrosanct, and the lifetime earnings you lose not having your money invested really adds up.

Tom: Any other outstanding things generation Xers need to think about?

Mellody: Another big piece of the puzzle for GenX is student loans. Nearly half of the $1 trillion dollars in loans is held by borrowers between 30 and 50. If you can prioritize paying down high-interest debt, do so, as it will allow that money you save in interest to be gaining interest in the market!

Tom: Always great to have you, Mellody!

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Mellody is President of Ariel investments, a Chicago-based money management firm that serves individual investors and retirement plans through its no-load mutual funds and separate accounts. Additionally, she is a regular financial contributor and analyst for CBS News.

Money Mondays: Generation X And Retirement Savings – What You Need To Know Now  was originally published on

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