Millions of Americans born between 1965 and 1980, collectively known as Generation X, are headed toward retirement woefully unprepared financially for retirement, a recent analysis shows.

The typical Gen-X household with a private retirement plan has $40,000 in savings, according to a report this week from the National Institute on Retirement Security (NIRS). The figures are even more more alarming for low-income Gen-Xers, who have managed to stash away no more than about $4,300, and often even less, the group found. Across all members of the generation, some 40% don't have a penny saved for retirement. 

"Gen-Xers are fast approaching retirement age, but the data indicate that the vast majority are not even close to having enough savings to retire," NIRS Executive Director Dan Doonan said in a statement. "Most Gen-Xers don't have a pension plan, they've lived through multiple economic crises, wages aren't keeping up with inflation and costs are rising. The American Dream of retirement is going to be a nightmare for too many Gen-Xers."

Polls show that many Americans estimate they'll need savings of at least $1 million to retire comfortably. 

Obstacles to saving

A major problem for Gen-Xers is their limited access to a pension or 401(k) plan through their job: Only 55% of Gen-X workers participate in an employer-sponsored plan, NIRS found. Other barriers to putting money away include higher student loan debts than Baby Boomers, while wage growth for Gen-Xers has been flat most of their careers, the group noted.

As a way to help people save, NIRS supports increasing the number of states around the country that offer retirement plans, noting that Minnesota, Missouri, Nevada and Vermont offer programs for residents who lack access to an employer plan. Combined, those states have helped residents save $838 million across 680,000 retirement accounts, the study noted. 

Congress should also consider giving Americans a tax credit for doing caregiver work, the researchers said. That would particularly benefit Gen-Xers, many of whom are "caring for aging parents on one end and raising children on the other end," NIRS said. 

"Accruing savings takes time, and Social Security alone won't provide enough retirement income," Tyler Bond's NIRS research director, said in a statement. "So it's critically important that we change course quickly. The status quo means we are looking at elder poverty for many Gen-Xers and pressure on their families for support."

The study used data from Prudential Financial, T. Rowe Price, Vanguard and Fidelity Investments as well as research from Pew Research Center, AARP, the Federal Reserve Bank of San Francisco and the U.S. Labor Department.

Members of Generation X — the roughly 64 million Americans sandwiched between Baby Boomers and Millennials — aren't the only ones struggling to meet retirement goals. Although boomers say they need $1.1 million for retirement, the median retirement savings is $120,000 for that generation, according to a recent study from Natixis Investment Managers. 

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Khristopher J. Brooks

Khristopher J. Brooks is a reporter for CBS MoneyWatch covering business, consumer and financial stories that range from economic inequality and housing issues to bankruptcies and the business of sports.

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