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For a generation that is supposed to be in its “peak savings years,” the prospect of retiring on time has shifted from a plan to a prayer.
PwC’s recently released Employee Financial Wellness Survey found that nearly 50% of Gen X workers are postponing their retirement dates, citing stagnant salaries, rising day-to-day expenses, and a lack of liquid savings.
Additionally, only 38% of Gen Xers believe they can retire when they originally planned, and more than half of this group expect to withdraw funds from their retirement accounts early to cover short-term expenses.
“For employers, this is not a problem of the future. Financial worries during peak working years can affect focus and engagement,” PwC researchers wrote. “If the risks are obvious, the question is why most workers don’t take action. It’s not a lack of desire. Most workers want stability, confidence and a sense of control. But many don’t feel ready to get there.”
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The main reason for this delay in retirement is the inability to save as inflation eats into monthly expenses, the report notes. Twenty-five percent of the total workforce lives without income, and nearly half cannot meet basic household expenses.
Nearly half of Gen X workers are delaying retirement, PwC reports. (Getty Images)
“[Forty-nine percent] they say their compensation is not commensurate with the costs. As expenses rise faster than income, daily trading becomes the norm. Employees don’t just feel pressured. They are making tough financial decisions to stay in business,” the PwC report continued.
As a result, when Gen Xers can’t leave their current jobs, all corporate ladders continue, creating business risks., with companies facing higher costs as older talent continues to earn longer than expected.
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“When workers dip into their retirement funds early or delay retirement altogether, it affects more than their own funds and retirement system leaks,” the report said. “It may also impact workforce planning, health care costs, succession time and overall organizational stability.”
The findings also show that a large proportion – 41% – of employees feel that they have never been given the tools to manage a problem of this nature, leading to a feeling of “frustration” with financial options.
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PwC has issued a call to action to employees and their employers, encouraging them to reduce the stigma around financial education, foster trust through the use of human coaches, emphasize skill building and focus on day-to-day finances before long-term goals.
“Employees define financial wellness simply: less stress, fewer surprises and the freedom to make confident financial decisions. For employers, that’s an opportunity.”
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