January 22nd, 2025, 10:53 AM GMT+0000

H.E Khalid Al-Falih, Minister of Investment, Kingdom of Saudi Arabia and Jenny Johnson, President and CEO, Franklin Templeton, join Bloomberg’s Sepideh Shokrpour at Bloomberg House in Davos to discuss Saudi Arabia’s emergence as a transformative hub at the crossroads of East and West. (Source: Bloomberg)

As the oldest members of Generation X (those born between 1965 and 1980) approach retirement, financial experts warn that many in this group may not be as prepared as they think. Generation X faces unique challenges as they prepare for retired life, from shortfalls in savings to unexpected costs that may arise.

Here’s what experts say Gen Xers need to know to avoid these key pitfalls and ensure a more secure retirement.

Many Gen Xers are significantly behind in their retirement savings. A recent study by Northwestern Mutual found that only 7% of Gen X respondents have saved more than 10 times their annual income–the amount most experts recommend for a comfortable retirement.

Don’t Miss:

Perhaps even more concerning, over half of Gen X respondents say they have only saved three times their annual income or less. Fidelity recommends having at least three times your annual salary by age 40, six times your salary by age 50 and eight times your salary by age 60 to stay on track for a comfortable retirement.

This shortfall in savings is compounded by the fact that many Gen Xers do not have a retirement income plan. According to Allianz, only 30% of Gen Xers have mapped out how they will fund their post-work years, the lowest rate among all generations surveyed.

A common misconception among Americans is that taxes decrease in retirement. However, financial experts caution that many Gen Xers could face higher-than-expected tax burdens. The reason? Most have their retirement savings in tax-deferred accounts, like 401(k)s and IRAs, which require taxes to be paid upon withdrawal.

“The big problem is that a lot of them are going to be faced with a lot of taxes in retirement,” Jonathan Dane, founder and chief investment officer for Defiant Capital Group in Pittsburgh, told U.S. News. He says one way to mitigate this is to stop putting money in tax-deferred accounts and transition to Roth accounts, which allow for tax-free withdrawals.

See Also: The Biggest Disruption to IP since Disney — Get in now as they monetize a $2 Trillion market by building content around the most profitable Character IP in history and combining it with the Patented Technology IP of the future.

Another concern is healthcare costs. While Medicare provides comprehensive coverage starting at age 65, it doesn’t cover everything. Long-term care expenses, like assisted living, typically aren’t included. Experts suggest considering long-term care insurance or using a health savings account (HSA) to prepare for these costs.

Story Continues

Bank of New York Mellon (BK) CEO Robin Vince joins Yahoo Finance Executive Editor Brian Sozzi at the 2025 World Economic Forum in Davos, Switzerland, to discuss US President Donald Trump’s return to the White House and his expectations for the president’s second term and the impact on the financial sector.

“To see a government that’s really focused on growth and being able to make the economy everything that it can be, because ultimately, as one of America’s leading banks, we are focused on helping our customers to be able to grow and thrive. You know, that’s what our platforms are all about,” Vince says.

As deregulation under Trump is expected to benefit the financial sector, Vince says he’s “not that concerned” about the risks associated with loose regulation. “We have to be vigilant that that doesn’t happen. We need a strong, healthy financial system,” he says, explaining, ” We’ve seen how the strong banks have been able to actually help the system over the course of the events … We’ve been a force for strength in the economy, and that’s actually the role that we should be playing.”

The CEO underlines, “I’m looking forward. I’m thinking about the innovation. I’m thinking about the investment. I’m thinking about helping to make economies grow and our clients be successful.”

Watch the video above to hear more from the BNY CEO on tariff expectations, a potential uptick in merger and acquisition (M&A) activity, and his crypto outlook.

Click here for more of Yahoo Finance’s coverage from the World Economic Forum in Davos.

Check out Yahoo Finance’s Davos interview with Bank of America (BAC) CEO Brian Moynihan here.

This post was written by Naomi Buchanan.