Generation X—the cohort of people born between 1965 and 1980—is now squarely in middle age. This phase often brings worries about aging, mortality, and a general decline in overall life satisfaction. Retirement preparedness is another major worry. Based on BlackRock’s 2024 Read on Retirement report, only 60% of survey respondents in this generation believe they’re on track to retire with the lifestyle they want, compared with 77% for Generation Z, 72% for millennials, and 68% for baby boomers.

Another survey from Transamerica puts some additional context behind why Gen Xers might be feeling unprepared. The typical survey respondent in that age group had a retirement savings balance of $93,000 and estimated they would need $700,000 to feel financially secure before retirement. The latter estimate may not fully reflect the impact of future inflation, which would make the amount needed even higher.

Members of this generation grew up in an in-between period for many things, including the gradual decline of defined-benefit pension plans and the beginning of defined-contribution plans. As a result, many Gen Xers had to contend with limited information, education, and investment options for retirement savings as they first started their careers.

It’s not all doom and gloom, though. Here, I’ll explore a few strategies that people in this age group can use to catch up before they retire. In each case, I’ve assumed a hypothetical investor with a $75,000 salary at age 50, earnings increasing by 1.5% per year, a $93,000 starting portfolio balance, and estimated returns of 6% per year. My projections don’t include any matching contributions from the employer, so they’re more conservative than what retirement-plan participants typically experience.

Catch-Up Strategy: Save 10% of Salary

This approach is in line with what many Gen Xers are already doing. Simply saving a consistent percentage of salary and taking advantage of compounding from age 50 to age 65 can get investors closer to the type of portfolio balance they might need to cover spending during retirement. Assuming the market performed in line with my assumptions, the hypothetical investor would end up with a portfolio balance of about $460,000 at age 65.

Catch-Up Strategy: Save 15% of Salary

Ratcheting up the savings rate to 15% of salary brings the ending value to more than $570,000. That’s an improvement, but still about $130,000 lower than the estimated need of $700,000.

Catch-Up Strategy: Invest Up to the $23,000 Annual Max

Starting in 2024, employees under age 50 can contribute up to $23,000 per year to a company-sponsored retirement plan, such as a 401(k). Making annual contributions in line with that amount starting at age 50 would lead to an estimated portfolio balance of about $860,000 at age 65. Although that’s higher than what survey participants estimated they would need, having a little extra can provide a margin of safety for covering additional expenses such as long-term care or leaving behind assets to family members or charity.

Catch-Up Strategy: Invest Up to the $30,500 Annual Max (Including Catch-Up Contributions)

Retirement savers who are age 50 and over can contribute an additional $7,500 in annual “catch-up” contributions, which can go a long way toward closing any retirement savings shortfalls. Assuming market returns of 6% per year, savers following this strategy would end up with about $1,066,000 at age 65. As in the previous example, the surplus portfolio balance could be used in a variety of ways.

Conclusion

The assumptions I’ve used here may not be realistic for every retirement saver. In particular, people at the older end of the Gen X range (about age 59 as of this writing) might need to shore up retirement savings on multiple fronts. In addition to maxing out annual contributions and catch-up contributions, they may want to contribute to other vehicles, such as a taxable account.

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