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It's probably not surprising that many Americans are worried about how prepared for retirement they are. What is surprising, though, is that according to a recent survey, members of Generation X are more despairing than baby boomers, with 67% seeing the sum they need to accumulate for retirement as way out of reach (versus 49% for boomers). That shouldn't be the case -- because younger people have a huge advantage over their elders.

Let's back up and review the survey results, which come from a study called "Generations Apart" by Allianz Insurance Company of North America, a subsidiary of Allianz SE. The study looked at how baby boomers and Gen Xers are view their retirements. The boomers are those aged 49 to 67, while the Gen X respondents ranged in age from 35 to 48.

Here are a few other particularly interesting findings, and some thoughts on them.

"Unrealistic"
In both groups, more than 80% see a retirement spent "doing exactly what you want" from age 65 on as unrealistic. It's worth noting that all Gen Xers (and anyone born in 1962 or later) have a "full" or "normal" retirement age of 67 in the eyes of the Social Security Administration, so a retirement at age 65 would automatically be a bit on the early side for most folks. Some of the baby boomers also fall into this category, with many others expected to retire around age 66. Thus, the survey question kind of sets up the result, with a somewhat unrealistic retirement age.

Images

Photo: Alan Cleaver, Flickr.

Debt
Still, something must be going on for the younger group to be so worried about their ability to retire well and/or on time. For many in Gen X, that something is debt. Not only do many still carry student loan debt, but many also bought homes before the housing market crashed and are struggling with mortgages. Per the Allianz study: "The study found that Gen Xers are carrying 38% more in mortgage debt (average of $144,000 versus $90,000 for boomers) and 45% more in non-mortgage debt, comprised of student loan debt (average of $12,000 versus $5,000 for boomers) and credit card debt (average of $8,000 versus $6,000 for boomers)."

It's clearly hard to save and invest and get ahead while mired in debt, so feelings of despair or hopelessness are rather understandable. Still, a lot of debt doesn't necessarily doom anyone financially. On our Fool discussion boards, many people have recounted how they've paid down massive amounts of debt -- even six-figure sums.

The 2008 crash
Another contributing factor to Gen X despair is the credit crisis of 2008 and its accompanying stock market crash, which scarred many investors, young and old. Part of the problem is that when markets crash, many people do exactly the wrong thing and sell off their holdings out of fear. Crashes are indeed bad news for anyone aiming to retire or cash out during or shortly after. But for most of us, the best response is just to hold on -- ideally investing more money into stocks that are on sale. After all, the stock market has recovered from all its crashes eventually and has gone on to set new record highs.

Blind faith
Here's a final troubling stat from the study: More than half of respondents from each generation agreed with this statement: "When it comes to retirement, I just have this feeling that everything's going to work out." That's very dangerous, unless the respondent is feeling so because he or she has little high-interest-rate debt and has been diligently saving and investing. That isn't the case for most folks. According to the 2015 Retirement Confidence Survey, 34% of workers aged 35 to 44 have saved less than $1,000 for retirement, 64% have saved less than $25,000, and 48% have not even tried to determine how much they will need for retirement. Yikes.

The good news
Fortunately, none of these things will doom Gen Xers to financial ruin -- as long as they take action. Younger people have an enormous advantage over older folks: time. Even if you're already 48, you may have 20 (or more!) good working years ahead of you during which you can build a sizable and sufficient nest egg.

The following table shows how it can work if you start with nothing and save $8,000 or $12,000 every year. We'll assume that you park that money in an inexpensive broad-market index fund such as one based on the S&P 500 and that you earn the stock market's long-term annual average growth rate of close to 10%.

Years

$8,000 per year

$12,000 per year

5

$53,700

$80,600

10

$140,200

$210,400

15

$279,600

$419,400

20

$504,000

$756,000

25

$865,500

$1.3 million

See? With enough time, you can amass hundreds of thousands of dollars. The table also reflects the power of working a few more years than you may have planned to, during which time you can sock away more money. This will let your nest egg grow larger through more time accumulating money, delaying withdrawals from it, and perhaps enjoying employer-provided benefits, such as health insurance and 401(k) contributions, for a little longer.

Saving and investing effectively for retirement can be a daunting task, but it's far from impossible. Get yourself out of debt as soon as you can and then save aggressively. A comfortable retirement may not be so out of reach.

Longtime Fool specialist Selena Maranjian, whom you can follow on Twitter, has no position in any stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.