For Generation X, often called the “forgotten generation” born between 1965 and 1980, retirement is not that far off.
Experts say this 43–58 age group bridges many gaps, economically, socially and technologically, creating different obstacles to financial security than their elders, the baby boomers and the Silent Generation, and their younger cohorts, the millennials and Generation Z.
In some ways, they have fared well. More than 70 percent own their own homes, according to real estate group Redfin, behind boomers (1946-1964) at 79 percent but ahead of millennials at 52 percent. They have taken out fewer loans from their retirement accounts—33 percent compared to 46 percent of millennials, according to the Transamerica Retirement Survey of Workers.
But in other ways, Gen Xers are struggling. In 2015, the year the oldest Gen Xers turned 50, Federal Reserve data show the generation held 17 percent of the nation’s wealth. Compare that to the boomers, who held 31 percent in 1996, the year they turned 50. Today, Gen Xers hold 29 percent, versus 53 percent held by boomers.
Gen X also carries 57 percent of the country’s $1.63 trillion student loan debt, averaging more than $44,000 in outstanding loans—more than any other age group.
There have been two large financial challenges for Gen X, economists say. The biggest change was job security, both in terms of long-term stability as well as employer provided pensions. They go hand in hand, says Karen Smith, a senior fellow at the Urban Institute in Washington, D.C.
As a result, fewer than a quarter of Gen Xers say they feel “very” confident that they will be able to fully retire.
Gen Xers are the first generation of workers for whom “defined contribution” retirement plans, such as 401(k)s, were far more common than traditional “defined benefit” pensions. One study by the Bureau of Labor Statistics found that only 18 percent of private-sector workers had pensions, compared to 35 percent in the early 1990s.
To be sure, not everyone is so worried about Gen X. The Urban Institute’s Smith says she’s been hearing the story about the retirement crisis for every generation for the past 20 years, first the boomers and now Gen X and the millennials.
Each “crisis” is sparked by different events, whether it’s housing prices rising or crashing or the stock market roller coaster. Most recently, the crisis was caused by the pandemic’s unemployment and mortality fallout.
Smith, 65, did not start saving for her own retirement until her 40s, she says, after paying off her student loans and then saving money for a down payment for a house. So it’s not really a Gen X financial retirement crisis, she says, but more of a lifestyle phenomenon.
“The cost of schooling went up and the cost of housing went up, so you’ve got more debt to pay down,” she says. “It’s not that they won’t have savings to retire, it’s just that they haven’t gotten to that point in their lifecycle.”
