Gen X Retirement Nears With S&P 500 Portfolios Riding a Boom: Advisor Says Real Danger Isn’t a Crash, but

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.