By Cyril Tuohy
More than one third of Generation X employees are likely to dip into their retirement savings to pay for non-retirement expenses, a sign that these adults are under enormous financial pressure, according to a recent survey.
The study also showed that 49 percent of Gen Xers find it difficult to meet household expenses on time each month, 58 percent consistently carry balance on their credit cards, and 44 percent find it difficult to make their minimum payments on time each month.
The results are published in PriceWaterhouseCoopers’ 2013 Employee Financial Wellness Survey.
“Gen X employees are in a unique financial situation,” Kent Allison, partner and national practice leader of PwC’s Employee Financial Education practice, said in a news release. “They’re often faced with the full spectrum of financial issues – from having to fund children’s education to caring for aging parents – while dealing with day-to-day household expenses.”
Looking to access cash, however, may prove even more costly as investors are penalized for dipping into retirement savings accounts.
Gen Xers are squeezed between the baby boom generation before them, and Generation Y behind them. Gen Xers, technologically savvy and more skeptical of the ability of institutions to address their needs, are sometimes referred to as the “sandwich generation,” as they are squeezed between two, much larger, groups.
Retirement confidence of Gen Xers also remains comparatively low, the PwC survey also found. Only 24 percent of respondents ages 45 to 54 are confident that they will be able to retire when they want, although that improved three percentage points over 2012, the survey found.
By comparison, 37 percent of respondents ages 55 to 64, and 37 percent of respondents between ages 35 and 44 said they were confident about retiring when they want.
In the U.S. in 2015, there will be an estimated 74 million baby boomers, people born between 1946 and 1964, according to U.S. Census Bureau data.
There will be an estimated 66 million members of Generation X, born between 1965 and 1980, according to the census, and an estimated 86 million members of Generation Y, people born between 1981 and 2000.
Cyril Tuohy is a writer based in Pennsylvania. He has covered the financial services industry for more than 15 years. He can be reached at [email protected].
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