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Gen X and Money: Five Things That Set This Generation Apart

This generation’s refusal to be categorized earned them the “X” in their name. Their childhoods and early adulthood were in a unique historical period, as their boomer parents settled into full maturity in a changing world. They lived in households where both parents went out to work or where there was a single parent, resulting in so-called “latchkey” kids that had very different foundational experiences.

They grew up independent from being on their own and flexible from the constant changes they witnessed. Often called cynical, this generation grew up with 1970s inflation and oil crises, cruised into the 80s watching interest rates go sky-high, and at the same time, their parent’s generation hit heights of excess. By the time they hit the workforce in the 1990s, everything was coming down with a resounding thud.

But they were also the first generation to grow up with Sesame Street and Mr. Rogers, and those lessons of valuing individuals for themselves appear to have paid off. They added grunge to the fashion scene, were the first generation of hip-hop, and proved resistant to cultural norms – adding “slacker” to the vernacular.

Where are they now? Let’s take a look.

They’re Making the Most – and Have the Most Debt

It’s reported that in 2020, members of Gen X had the highest average income per household in America at $113,445, almost $40,000 more than the next closest generation (millennials at $84,975).1 However, they also have the most debt, as they were the first generation to experience both higher student debt as college prices increased and consistently higher interest rates.

They’ve Gone from Latchkey to Sandwich

Right now, Gen X is in a unique spot. They’re in their peak earning years, kids are typically reaching college-age or entering adulthood, and parents are reaching an age where they may need financial support or help to age gracefully. This generation faces the challenges of parents who live longer and need much more care. And they often want to live out their final years in their own homes.

According to Pew Research Center, nearly half (47%) of adults in their 40s and 50s have a parent aged 65 or older and are raising a young child or financially supporting a grown child (age 18 or older). And about one-in-seven middle-aged adults (15%) provide financial support to both an aging parent and a child.

They’re Not Letting It Get Them Down

The same Pew survey suggests that adults in the sandwich generation are just as happy with their lives overall as are other adults. Some 31% say they are very happy with their lives, and an additional 52% say they are pretty happy.

What Do They Want Now?

Gen-Xers are in peak earning years and are also likely to see part of the massive wealth transfer from Boomers. Between now and 2045, $84.4 trillion in wealth is expected to pass down either to beneficiaries or charity in the United States2.

They also have more complicated wealth than their parents did. This generation has stock options, deferred compensation arrangements, and 401(k)s to manage, as opposed to mostly pension income in retirement.

What is worrying them?

  • Minimizing taxes while they are working
  • Creating a diversified portfolio
  • Saving for kids’ education
  • Making an expensive mistake

Many Gen-Xers have accumulated enough wealth that they realize they need help to manage a financial plan. However, this critical-thinking generation is not interested in old wealth management models. They want to understand the “why,” They want advice that gives them options and choices. They prioritize creating a financial plan that reflects their values for investing, donating, and building a meaningful life.

For this generation, the fee-only fiduciary model is how they want to access advice.

What Do They Want in Retirement?

In a recent survey by Ameriprise, nine out of 10 Gen Xers surveyed said they think their retirement wouldn’t fit the traditional mold.3

They expect to work longer than their parent’s generation, but they want they see retirement work differently. They are focused on flexible, fulfilling, and rewarding work that provides social interaction and a greater purpose. In other words, not just golf and grandkids.

The Bottom Line

This unique generation has been quietly setting the standard for decades, and their views on money and financial planning are no different. Creating a financial plan that helps them build long-term wealth on their terms reflecting their values, is a priority.

  1. Statista Research. Mean Disposable Household Income in the United States in 2020, by Generation. February 24, 2022. Statista.
  2. Cariaga, Vance. Gen-Xers Will Inherit $30 Trillion Dollars in the Next Two Decades. March 4, 2022. Yahoo Finance.
  3. Khalfani-Cox, Lynnette. Five Interesting Facts About Gen X. AARP.

If you’d like an objective second opinion about your finances, please contact Michael Shea, a CERTIFIED FINANCIAL PLANNER™ and owner of True Equity Wealth Management LLC. Email him at [email protected] or fill out a contact form.

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