60% of Generation X Don’t Have an IRA

A recent Schwab survey says 60% Gen-Xers don’t have an IRA. I read it in Schwab’s On Investing magazine. It’s also reported on ItsaSurvey.com:

“Schwab surveyed over 500 Americans between the ages of 25 and 40 — a range that generally overlaps with the so-called Generation X — regarding finances and retirement.

… …

“While more than eight in 10 of those born into Generation X are taking some sort of action to save for retirement, only 40 percent of those who are saving have an IRA. Those who do not have an IRA say they don’t need one, don’t have enough money to fund one, or believe the accounts are too complicated.”

If you are a Gen-Xer with an IRA, congratulations, you did better than 60% of your peers. If you don’t have an IRA, make no excuses, because

1. You need one. You are saving in a 401(k) or 403(b), right? Right? The 401(k) or 403(b) is set up by your employer. Many plans have higher expenses and limited investment choices. An IRA is something you have complete control over. You can have the lowest expenses and the best investment choices.

2. It doesn’t take much money to fund one. Save up $1,000 and you can open an IRA with the best mutual fund company Vanguard in the best mutual fund for investing less than $3,000. Don’t have $1,000? For as little as $100, you can still do pretty well with an AARP fund. See my previous post on investing a small amount.

3. The accounts are not complicated at all. Pick the Roth IRA if you are not sure, unless your income is too high.

There you have it. You, too, can have an IRA. Everybody should have one. 

See All Your Accounts In One Place

Track your net worth, asset allocation, and portfolio performance with free financial tools from Personal Capital.

FREE E-mail Newsletter

Join over 3,000 readers and get new articles by e-mail:

No spam. Unsubscribe any time.


  1. Ted Valentine says

    If you don’t mind, TFB, having signed up for this exact fund in my conservative investor-wife’s ROTH earlier this year:

    4. It takes about 20 minutes to sign up online at vanguard.com and you can fund it electronically direct from your bank account. Most genXers will waste 3 times that online today at work. So you can’t say you don’t have time.

  2. TFB says

    Thank you Ted for the great addition. It goes with the saying people spend more time planning for their next vacation than planning for their retirement. I don’t know if that’s true or not, but you are right. Opening an IRA does not take much time at all.

  3. Anonymous says

    I believe you’re overlooking a legitimate scenario in which putting $$$ in an IRA doesn’t make sense: when your MAGI (Modified Adjusted Gross Income) exceeds $114,000/year.

    In this scenario, contributions you make to an IRA (Roth or Traditional) are not tax deductible.

    Putting money in a taxable account (after you’ve filled your 401(k)), instead, is a better strategy in my opinion.

  4. TFB says


    You are right — people who earn “too much” cannot contribute to a Roth IRA or deduct their contributions to a Traditional IRA. But I think they should have an IRA of some sort, established when they weren’t excluded from the contribution or tax deduction. The survey says 60% of Generation X don’t have an IRA, not just not adding $$$ to one. Put it in another way, if you don’t set up one now, if you ever enter the “income too high” category, you will not have the chance again.

  5. Anonymous says

    For me, early withdrawal penalties are a big negative. Your tone is patronizing and fails to appreciate the wide range of life situations any given genXer may face. For example, my earned income is squat while assets are significant. I live overseas from time to time. Last year, I took a net capital gain of $50k and paid 1% tax on it. How is that possible? That’s my business, but it wouldn’t have been possible with an IRA.

Leave a Reply

Your email address will not be published. Required fields are marked *