Motley Fool Money: "How Gen X Can Rescue Their Retirement"

Date: November 8, 2025
Host: Robert Brokamp
Guest: Kerry Hannon (Author, Senior Columnist at Yahoo Finance)

Episode Overview

This weekend episode focuses on the unique retirement challenges facing Generation X, a cohort born between 1965 and 1980, and discusses actionable strategies for improving retirement readiness. Host Robert Brokamp interviews Kerry Hannon, co-author of Retirement: A Gen X Guide to Securing Your Financial Future, to cover the landscape of Gen X’s financial preparedness, common pitfalls, and solutions—including leveraging peak earning years, dealing with the “sandwich generation” squeeze, managing debt, and even late-career entrepreneurship.

Key Discussion Points & Insights

1. Market & Economic Update

• Resilient Bull Market:
  • Analyst Jirion Timmer (Fidelity) likens today’s market to early 1999—a later stage bull market, but still expecting possible gains for another year.
  • The "Mag 7” (seven largest tech stocks) inflate index valuations, but median stock P/E ratios remain reasonable.
  • Investors may benefit from diversifying into cheaper international stocks. (00:30)
• SP500 Historical Precedents:
  • Ryan Dietrich (Carson Group) notes that rebounds like the 2025 recovery often lead to double-digit gains the following year, citing 1982, 2009, and 2020 as prior examples. (01:19)
• 529 to Roth IRA Transfers:
  • New rules allow limited, tax-free rollovers from 529 plans to Roth IRAs, but state tax treatment varies. California notably does not allow these tax-free. Residents in some states may owe taxes or repay past deductions if they use this strategy. (02:15)
• Return Expectations:
  • Vanguard forecasts 2.8%-4.8% annualized US stock returns for the next decade, lower than historical averages. US bonds may return a similar 3.8%-4.8%.
  • J.P. Morgan projects higher returns (6.7% stocks), but expectations are uncertain.
  • Brokamp recommends using modest return assumptions in personal planning—he’s reduced his own “default” rate from 6% to 5%. (03:30–04:40)
• GEN X Connection:
  • “After all, I'm an older member of Gen X and we all should be taking careful stock of whether we are on track to retire, how and when we want…” —Robert Brokamp (04:36)

2. Gen X Retirement Readiness – By the Numbers

[Interview Start: 05:20]

• General Stats:
  • Many Gen Xers feel unprepared:
    • 1 in 4 lack a retirement account.
    • 3 in 5 are not confident in achieving their “dream” retirement.
    • Half fear outliving their savings.
  • “There is this real sense that they're woefully unprepared for retirement… But even if they aren't, they think they are.” —Kerry Hannon (06:08)

3. Why Gen X Struggles: Pensions Out, DIY In

• Shift from Pensions to 401(k):
  • Gen X was the first cohort for whom the 401(k) (introduced early 1980s) replaced pensions.
  • Early 401(k)s offered little education, few investment choices, and low contribution limits.
  • “Many people, and including myself, actually after five years, cashed out a 401(k) plan because nobody told us not to.” —Kerry Hannon (07:55)
• Millennials & Gen Z More Prepared:
  • Automatic enrollment and escalation make it easier for younger workers to save earlier.
  • Gen X started saving at 31 on average, Millennials at 24, Gen Z even younger.

4. The Unique Financial Squeeze on Gen X

• The "Sandwich Generation":

  • Often responsible for both aging parents and dependent children simultaneously.
  • Personal anecdote: A 55-year-old listener juggling preteen kids and a mother with dementia. (10:19)

• Social Security Uncertainty:

  • Trust fund potentially depleted in a decade or less, raising anxiety about government support.

• High Debt Loads:

  • Gen X has highest levels of:
    • Student loan debt (own and children’s)
    • Credit card debt—rooted in the era when easy credit became widespread
    • 401(k) loans—1 in 4 have borrowed from their retirement account.
  • “Over the years… have another credit card. So they've run up pretty exorbitant amounts of credit card debt.” —Kerry Hannon (11:13)

5. Actionable Solutions for Gen X

• Peak Earning Years:
  • Most Gen Xers are in their highest income years—this is the moment to make a push.
• Lifestyle Creep & Budgeting:
  • Reign in “exploding” lifestyles, re-budget, and aggressively target debt repayment.
  • “No one wants to do a budget but, but it is really your first step in finding where you can make change happen.” —Kerry Hannon (12:31)
• Home Equity:
  • Many Gen Xers have significant home equity—an asset that can factor into retirement plans.
• Work Longer/Phased Retirement:
  • “I don’t think work is a four letter word… this is a time many Gen Xers can say, okay, how can I extend my working life and phase into a retirement and do it in the way I want to do it?” —Kerry Hannon (13:14)
  • Delaying Social Security increases long-term benefits.
  • Partial retirement or career pivots can provide income and engagement.

6. Entrepreneurship & Midlife Career Change

[Entrepreneurship: 14:53]

• Older entrepreneurs often outperform younger ones due to experience, resources, and networks.
• The rise of remote work reduces startup costs and staffing needs.
• Tips for Would-Be Entrepreneurs:
  • “Go slow, no rash moves. You need to get financially fit because you may not be able to pay yourself immediately when you get started.” (15:25)
  • Network and talk to industry insiders.
  • Consider certifications and upskilling—no need for a full degree.
  • Test ideas through volunteering or side gigs.
  • “Nothing lasts forever. So just get started. If you dream of being an entrepreneur, give it a shot…” (17:03)

7. Notable Quotes & Memorable Moments

• “This is this scrappy, resilient generation that rode bikes without helmets and drank water out of the hose and, you know, ate Pop Tarts.” —Kerry Hannon, on Gen X’s resourcefulness (09:18)
• “Gen X was also hit pretty hard by some of the economic realities and setbacks over their careers. But…they bounced back faster than any other generation in terms of lost savings during [the financial crisis].” —Kerry Hannon (09:42)
• “[Retirement] is a time in your career that's like a patchwork quilt. You might do something for a few years, you might do a couple things at the same time. So have an open mind and, and just get started.” —Kerry Hannon (17:20)
• "Studies that show whether retirement is good for us are actually mixed, you know, because we do get some value from work, as you point out.” —Robert Brokamp (14:24)

8. Estate Planning – The Final “Must-Do”

[18:54]

• The holiday season is a good time to discuss estate planning with family.
• Two anecdotes illustrate how lack of knowledge about a loved one's finances creates hardship.
• Urges listeners to talk with people who will manage their finances/estate—and keep documents/findings accessible.
• “Take the time to talk with the people you expect to take over and fulfill your financial wishes if something happens to you.” —Robert Brokamp (19:18)

Timestamps for Key Segments

• 00:30 – Market outlook: bull market comparisons, S&P 500, return forecasts
• 02:15 – 529 to Roth IRA transfers: new options and tax details
• 05:20 – Interview with Kerry Hannon: state of Gen X retirement readiness
• 07:14 – How Gen X got a raw deal with the retirement system shift
• 10:07 – The challenges of the sandwich generation and debt burdens
• 12:18 – Solutions: Budgeting, debt repayment, asset use, working longer
• 14:53 – Midlife entrepreneurship: tips, opportunities, and mindset
• 18:54 – Final advice: estate planning and family financial conversations

Summary Takeaway

Gen X faces a distinctive set of challenges as the first generation forced into “DIY” retirement planning. But as host Robert Brokamp and author Kerry Hannon argue, this is also a resilient, resourceful cohort now in their peak earning years—making “right now” the best moment to catch up. That means cracking down on lifestyle creep, budgeting, leveraging home equity and professional experience, and considering phased retirement or entrepreneurship. Ultimately, Gen X has the tools and time to “rescue” retirement—if they act with urgency and a clear plan.

For full detail on state-specific tax rules on 529-to-Roth transfers, career change resources, or further investing analysis, consult the show’s referenced articles or the Motley Fool website.