4 Shocking Facts About Gen X’s Finances
A generation simultaneously raising their children and caring for their aging parents, Gen X faces a very different set of financial circumstances than Boomers and Millennials do. And as the “middle child” generation sandwiched by two large and vastly different generations, Gen X’s distinguishing financial challenges are often completely overlooked.
As they near retirement age, many Gen Xers are looking into their financial future and grappling with the potential of unfavorable outcomes in the face of economic and social instability. Despite some positive highlights in the average Xer’s financial repertoire, the “Forgotten Generation” is the first generation projected to be financially worse off than their parents.
Here are four interesting facts about the typical Gen Xer that exemplify the unique financial circumstances Americans born between the mid-’60s and mid-’80s face.
1. Gen X typically earns more per household than other generations
According to the Bureau of Labor Statistics' 2020 Consumer Expenditure Survey, Gen X households’ mean gross income is $113,455—outranking Millennials ($84,975) and Boomers ($78,508). This difference feels stark, but it is likely because Gen X is at the peak of its working and earning years, plus more Gen X women work than their Boomer predecessors.
Naturally, because Gen Xers have more income, they spend an above-average amount in consumer categories. The typical Xer’s household spending comes to $75,087 annually, significantly higher than the national household average of $61,334. This could be because Gen Xers are caring both for their children and for their aging parents, giving them more significant financial responsibilities than other generations.
2. Gen Xers were hit hardest by the Great Recession, but they rebounded better
Gen Xers are no strangers to economic uncertainty, having experienced three recessions in their lifetimes—the dot-com bubble of the ‘90s, the 2008 financial crisis, and the ongoing pandemic.
The bulk of Gen Xers’ wealth was invested in their homes in 2007. However, while the Forgotten Generation suffered the biggest losses in home equity in 2008’s Great Recession, they also recovered better.
According to the Pew Research Center, this can be attributed to the fact that Gen Xers are currently experiencing their best earning (and saving) years—plus their home equity has doubled since 2010. However, because of the cynicism this generation formed around financial security, they are more risk-averse than their parents’ generation.
3. Gen X has the most debt
Despite their fantastic recovery from the 2008 financial crisis, more than half of Gen X has credit card debt—and an Experian report from 2019 found that they carry higher balances across credit accounts than any other generation.
Gen Xers own or are buying homes, care for their multigenerational families, and even still owe money on their student loans, in large part due to a jobs market that more commonly requires postsecondary education in applicants. Plus, some Xers are helping their kids pay off their own college debt!
According to Experian, ages 44 through 48 are typically “heavy debt years” regardless of generation, with 44-year-olds carrying a debt balance of $138,916 on average.
Still, Pew notes that Gen Xers’ debt is higher than their generational predecessors and that they have been unable to convert their extra income into wealth. That said, Gen X’s retirement prospects are very much at risk.
4. One in five Gen Xers says they’ll never be able to retire
Gen X is pessimistic about their ability to retire, with 20% saying they could never afford to retire, says AARP. The Transamerica Center for Retirement Studies (TCRS) found in 2019 that 41% of Gen Xers are worried about outliving their money, and according to a study conducted by Bank of America, only 23% of Gen Xers feel a sense of progress in their retirement savings.
Unfortunately, the evidence backs up their fears—TCRS found that the median retirement savings for an Xer comes to $64,000, which is less than half of Boomers’ $144,000 median.
Plus, because Social Security is dwindling and pension benefits are becoming less popular with employers, Gen X knows the onus of figuring out how to pay for retirement is entirely on them. In fact, 80% of Gen Xers plan to rely on 401(k)s or similar retirement funds to support themselves as they age.
Resolving Gen X’s credit card debt
For Americans stressing over their retirement prospects and struggling to pay off their debt, JG Wentworth offers a Debt Relief Program that could help you lower your debt and pay it off in as little as 24 to 48 months.*
If you’re concerned about how your debt could affect your financial goals, give us a call today at (888) 505-1794. Our team of Debt Specialists is here to negotiate with your creditors on your behalf and map out a personalized plan to pay off your debt faster, so you can get your future back on track.
Sources Cited
- Kagan, J. (2022, June 23). Generation X (Gen X). Investopedia. Retrieved from https://www.investopedia.com/terms/g/generation-x-genx.asp
- Hoffower, H., & Kiersz, A. (2021, November 5). Meet the typical Gen Xer, America's 'forgotten middle child' who earns more than everyone else but has the most debt at $136,000. Business Insider. Retrieved from https://www.businessinsider.com/typical-gen-x-debt-net-worth-income-earnings-caregiving-stress-2021-8
- U.S. Bureau of Labor Statistics. (2021, September 9). Consumer expenditure surveys tables (CEX). U.S. Bureau of Labor Statistics. Retrieved from https://www.bls.gov/cex/tables/calendar-year/mean-item-share-average-standard-error.htm
- Fry, R. (2018, July 23). Gen X rebounds as the only generation to recover the wealth lost after the housing crash. Pew Research Center. Retrieved from https://www.pewresearch.org/fact-tank/2018/07/23/gen-x-rebounds-as-the-only-generation-to-recover-the-wealth-lost-after-the-housing-crash/
- Stolba, S. L. (2019, April 17). Gen Xers have the highest average total debt balances. Experian. Retrieved from https://www.experian.com/blogs/ask-experian/gen-xers-have-the-highest-average-total-debt-balances/?sid=bi%7C611aec2b09e0357e41700375%7C1657038599385b7zfi3h5
- Currier, E. (2018, January 26). How Generation X could change the American Dream. The Pew Charitable Trusts. Retrieved from https://www.pewtrusts.org/en/trend/archive/winter-2018/how-generation-x-could-change-the-american-dream
- Next Avenue. (2021, January 4). Why Gen Xers are way more worried about money than Boomers. Forbes Magazine. Retrieved from https://www.forbes.com/sites/nextavenue/2021/01/04/why-gen-xers-are-way-more-worried-about-money-than-boomers/?sh=61377b3250b9
- Impact Partners. (2018, February 9). Where did all the pensions go? Forbes. Retrieved from https://www.forbes.com/sites/impactpartners/2018/02/09/where-did-all-the-pensions-go/?sh=583127bf3aab
- Khalfani-Cox, L. (n.d.). Financial facts about Generation X. AARP. Retrieved from https://www.aarp.org/money/credit-loans-debt/info-2015/gen-x-interesting-finance-facts.html
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