Financial advisers are warning that Gen X investors approaching retirement could be particularly vulnerable to a market downturn as heavy exposure to the S&P 500 coincides with growing concentration in AI-linked stocks, according to a CNBC report published Sunday.
Gen X, generally defined as those born between 1965 and 1980, is entering a period when years of accumulating retirement savings increasingly overlap with the need to protect money that may soon be used for income. Only 14% of Gen X workers have a traditional pension, compared with 56% of baby boomers, according to research from the National Institute on Retirement Security.
Wrong-Time Crash
A decade of strong market returns has left some near-retirees heavily invested in S&P 500 funds, creating what advisers call sequence-of-returns risk, where a major decline near or shortly after retirement can force investors to sell assets at depressed prices.
Mike Dunlop, certified financial planner and co-founder of Ignite Planning, noted that seven companies now account for more than 30% of the S&P 500.
"For somebody that’s 50 to 55 years old, the real danger isn’t a crash, it’s a crash at the wrong time," Dunlop told CNBC.
The dot-com bust offers a warning. Amazon.com Inc. (NASDAQ:AMZN) shares took roughly a decade to reclaim their 1999 peak, while the broader S&P 500 also endured years-long recovery periods following the dot-com crash and the Great Recession.
AI Concentration
Asher Rogovy, chief investment officer of Magnifina, estimated that 40% to 50% of the S&P 500’s market value is now concentrated in companies tied to AI, warning that the dot-com bubble featured similar levels of index concentration.
The concerns come as many Gen X households already face a retirement savings gap. National Institute on Retirement Security data showed median Gen X retirement savings of just $40,000, while Northwestern Mutual research found the generation believes it will need about $1.57 million to retire comfortably.
The picture varies sharply across households. Empower data showed Americans in their 50s had an average net worth of about $1.36 million in 2026, but median net worth was substantially lower at $180,227, highlighting how wealthy households can pull averages higher.
Separately, a Transamerica Center for Retirement Studies survey found 81% of Gen X workers believe they will have a harder time achieving financial security than their parents’ generation. Only 18% said they were very confident they would be able to retire comfortably.
Disclaimer: This content was produced with the help of AI tools and was reviewed and published by Benzinga editors.
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