The alarming number of Gen Xers whose 401(K) plan involves retiring in their kids’ spare bedroom

As Gen Xers approach retirement age, they realize their 401(K) won’t be enough, a worrying report shows.

A survey finds that Americans aged 55 typically have less than $50,000 saved for retirement, well below the $446,565 recommended at this point.

Nearly a quarter of them expect to run out of money and plan to turn to their children for help.

More than a fifth of them said they would likely need to move into their children’s spare bedroom or basement as a “silver squatter.”

Prudential, a financial group, surveyed the oldest members of Generation X, those born between 1965 and 1980.

They are now entering their pre-retirement years, giving them about a decade to save more before saying goodbye to their workplace for good.

Many worry that Social Security cuts could erode what remains of America’s social safety net.

Caroline Feeney, CEO of Prudential’s US operations, said many 55-year-old women had “particularly precarious” finances as they entered the “critical 10-year countdown to retirement”.

She urged Gen Xers to look at their 401(K)s and rethink their plans so they can “live not only longer, but better.”

The general rule of thumb for 55-year-olds is to have about eight times their annual salary saved in their retirement account.

Instead, the median savings is $47,950.

According to the researchers, only one in five 55-year-olds have saved the recommended amount of $447,000 or more.

Many say they struggled to save money throughout their careers due to the bursting of the dot-com bubble, the housing crisis, the global pandemic and soaring inflation.

Many of them are also forced to care for their children and aging parents at the same time due to their increased life expectancy.

In total, 67% of them said they expected to run out of money before they died.

This means they are looking for other options and plan to turn to relatives when their pension is empty.

At least 24% said they would turn to their children or other family members for help, and 21% said they would likely end up asking a family member to use a spare room or basement.

This may come as a shock to those close to these Gen Xers, as nearly half of respondents admitted they had yet to broach the subject with their offspring.

Dylan Tyson, a retirement expert at Prudential, believes it’s time for many to “grow their retirement nest egg.”

A 55-year-old who starts with $50,000 in retirement savings could end up with a $500,000 retirement pot within a decade, but it takes a lot of work and a little luck.

They are expected to save about $2,000 per month and earn an annual return of 10% on their investments.

Gen Xers are also taking to social media to complain about their meager 401(K) funds and share as many banking tips as possible over the next decade.

TikTok financial advisor Jen Walton says that “most Gen Xers are worried about not having enough money to fund their retirement.”

She encouraged them to find a sideline to build up more capital and to stop working “as soon as possible.”

Kendra Fejedelem, a Colorado-based nurse practitioner, says she’s given up on saving.

Generation X hopes to die from work before reaching 65, saying their “retirement plan is to die.”

Their fears are compounded by the crumbling of the American safety net.

Recent data shows that the funds supporting Social Security and Medicaid could run out in just over a decade.

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Social Security relies on its trust funds to provide monthly benefit checks to about 70 million Americans.

But the aging population is pushing up the cost of the program, as a smaller proportion of people pay into it and spending outpaces income.

In what’s being called the “silver tsunami,” about 4.1 million Americans are expected to turn 65 in 2024, and every year through 2027, according to a report from the Alliance for Lifetime Income.

The Social Security Board of Trustees’ latest annual report found that Social Security would only be able to pay full benefits for the next 11 years.

Social Security is funded primarily by employee contributions deducted from paychecks, which are then used to pay retirement and disability benefits.

If the trust funds that support the Social Security Administration are depleted, beneficiaries could see their monthly checks reduced.

This could be important for millions of Americans with disabilities and those who rely on Social Security as their only retirement income.

The financial outlook for the social security system has long been a point of political contention.

Republicans have suggested raising the retirement age, while Democrats have proposed increasing the payroll tax cap as a potential solution.