Gen X: Livin’ on a Prayer (…and a lot of planning)

Generation X: sandwiched between the revolutionary Baby Boomers and the game-changing Millennials, this small generation often escapes the headlines.  I can relate to this since it is mine!

However, Xers have also weathered some of the largest financial crises in modern history, including the financial fallout of 2008 and the bursting of the Y2K dot-com bubble. What’s more, they face decades of uncertainty; of the three traditional pillars of retirement savings – personal accounts, pensions, and social security – the latter two are crumbling before their eyes.

While Gen X has many of the same financial challenges as other generations today – the needs of both aging parents and children and the rising costs of health care among them – the conditions of the past and the future have created some trends that suggest many Xers are feeling particularly strapped.

According to a 2012 report by the Insured Retirement Institute, two-thirds of respondents to a survey regarding financial habits revealed that 41% of Gen Xers have saved less than $100,000 for retirement; 15% have made early withdrawals from their 401(k) plans; 23% have stopped contributing to their retirement accounts, and 22% have stopped contributing to college savings plans.

Gen X is well-versed in tough financial times. But it’s also seen periods of great prosperity brought on by technology and innovation. That has made Xers cautiously optimistic: they watch the news for headlines that might inform their financial decisions, prefer the security of bonds over stocks, and are more likely in general than any other generation to plan for tomorrow simultaneously with today, but thanks to past experiences and their current status in life, they’re also more prepared to change course on their financial paths by shifting their spending habits, maximizing their retirement benefits, or negotiating salaries, for instance.

A final statistic from the Insured Retirement Institute’s report adds weight to this argument; one-third of Gen Xers are confident that they will have enough money to live comfortably during retirement, cover their medical expenses, and pay for their children’s college educations. Hope is not lost on Generation X, and in fact, that may be this group’s greatest strength.