6 minutes
Explore strategies to help Gen X execs retire well while keeping their leadership and experience driving credit union growth.
The “forgotten generation,” more popularly recognized as Generation X, is characterized by many traits. Perhaps none is more notable than the trait of independence.
Coming of age as so-called latchkey kids, Gen Xers from dual-income households were often responsible for tasks that prior generations relied on adults to handle. Kids got themselves home from school, finished their homework, and in some families, started dinner while also caring for younger siblings.
Today, as the oldest among them approaches retirement, Gen X professionals find themselves back in familiar territory—responsible for a monumental task that prior generations relied on employers to handle.
The Forgotten Generation Takes the Reigns of Retirement Investing
Having entered the workforce just as the incentives for American workers began to change, Gen Xers have largely been excluded from simple, yet lucrative, retirement programs. Gone were the days of ubiquitous pensions programs that rewarded loyalty with steady income throughout retirement—and sometimes longer, providing benefits to widows and other beneficiaries even after the pension holder died.
Instead, Gen Xers were offered 401(k)s, 403(b)s and similar plans that effectively put them in charge of their own financial destinies.
Whether we think of the shift as financial abandonment of the forgotten generation or financial empowerment for the fiercely independent, it was a dramatic change. The true ramifications of that change are about to be felt by Gen X retirees and their families.
For credit unions—which generally take a more compassionate and people-centered approach to leadership transitions—this moment in time presents both challenges and opportunities for helping CU executives navigate the next phase of life.
Compound Interest Competes with Sought-after Tranquility
Credit union Gen X CEOs and other executives may be facing the challenge of inadequate retirement savings. In a 2023 survey by Bankrate, Gen Xers were the most likely generation, at 69%, to say they’re behind in saving for retirement.1
Compounding the issue of insufficient savings is that Gen Xers who turned 59½ this summer could actually start withdrawing money from 401(k) and other retirement accounts without a penalty. This might make early retirement tempting. Particularly for high-level Gen Xers who may be confronting post-pandemic burnout, swapping compound interest for decompression could seem like a pretty decent trade. In a 2024 survey of CEOs, 55% said they’d experienced a mental health issue within the last year, a 24-point increase as compared to the same survey in 2023.2
Developing a Happy Medium for Gen X Executives
Credit unions that recognize their executives’ struggle with the choice between sufficient savings and a life well-lived have a tremendous opportunity to help their executives strike an optimal balance. As credit unions transition from current to future leaders, they can continue to empower their Gen X leaders to continue contributing to their retirement investments while achieving the work-life balance they’ve always heard about but never thought they’d have.
Architecting a role like this may not be as difficult today as it would have been in prior years. Fractional CEOs, CFOs and CMOs are becoming increasingly popular, especially for credit unions with substantial growth or expansion plans or in need of leadership transition support, creating a replicable model for credit unions to follow.
Compensation for Retirement-Bound Fractional Executives
Credit unions can consider several strategies to integrate fractional executives into their workforce, as well as leverage their talents at reduced hours while providing adequate compensation.
Increase retirement contributions. Upping matching dollars in exchange for the executive contributing on a fractional basis communicates that the credit union places a high value on the executive’s influence and leadership.
Co-create performance-based incentives. As part of their strategic plans, credit unions may establish financial incentives that are tied to a specific achievement or milestone. This gives the Gen X executive autonomy to choose the most meaningful goals without overwhelming themselves.
Tack on some out-of-the-box benefits. Caregiver benefits that extend to aging parents may be enough to keep Gen X executives engaged and contributing to the credit union. It’s not uncommon for Gen Xers to leverage their own savings to care for their moms and dads as they require medical support and long-term care assistance.
Formalize transition assistance. Even for executives who lead financial institutions, there is always more to learn about becoming a savvy saver. Tax rules and regulatory changes alone make it extremely difficult for anyone to stay on top of their benefits without help—even fiercely independent Gen Xers. Credit unions that offer financial planning assistance or advisory services can help their fractional executives catch up on savings in the most efficient way possible.
Working Together Toward Retirement Health
Gen Xers who have devoted their careers to the more empathetic side of financial services are now in a spot where they, too, need some empathy. Credit union C-suite leaders of this generation are forced to navigate a retirement planning landscape vastly different from that of previous generations. And while they may be tempted to go it alone—as they have done so often throughout their lives—their credit union colleagues no doubt want to help.
The shift from traditional pension plans to self-managed retirement accounts has left many Gen Xers with a savings shortfall. Credit unions are uniquely positioned to help. It may require getting creative and trying new things, but the rewards of a financially well positioned executive retiring with dignity will be worth the effort.
John Pesh is a director for Trustage™ Executive Benefits Solutions who consults with credit unions on insurance, investments and advanced planning, including executive compensation, benefits packages and leadership continuity.
1 Bankrate, Survey: 56% of Americans feel behind on saving for retirement, Sept. 27, 2023
2 Businessolver, 2024 Mental Health Report, Aug. 28, 2024
The views presented here are the author’s alone and not necessarily representative of opinions held by TruStage, LPL Financial or any affiliated entity.
TruStage is not affiliated with LPL Financial or its affiliates.
TruStage™ is the marketing name for TruStage Financial Group, Inc., its subsidiaries and affiliates. Certain brokered insurance products from various insurers may be offered through CUNA Mutual Insurance Agency, a subsidiary of TruStage Financial Group. Each insurer is solely responsible for
the financial obligations under the policies and contracts it issues. For more information, contact your Executive Benefits Specialist at 800-356-2644.
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