Generation X, often called "Gen X", is a group of individuals born roughly between 1965 and 1980. They're known as the "latchkey generation". Gen X finds itself in a new paradigm shift for work force, family dynamic, cultural moments and technological changes.
Generational Identity of Gen X
They have an identity marked by independent childhoods where they had working parents. This has caused different traits to become more common than the other generations and may bring an awareness that isn't as understood with outside perspectives.
Work ethic
Gen X has been tasked with the widespread move from defined benefit to contribution saving programs. With the change of retirement plans responsibility was placed onto each individual and it is important to examine those points within Gen X.
The View on Financial Success
Empower conducted a study on how different generations perceive financial success, the results from this study demonstrate various points from salaries to personal achievements. It appears that Generation X has very different opinions than others.
Defining Net Worth
Many in Gen X define that a net worth around 5 million dollars equates to having had a good financial journey while younger generations such as Gen Z see that more closer to 9.5 million. These differing view points provide insight into different goals across generations which leads to a broader understanding about how money is viewed within these different mindsets.
Multiple Factors of Success
While finances is an important factor of how most define success the majority 59 percent ranked happiness as a bigger key element. The emphasis shifts from how much is saved but how content one is to be the top measure of achievements. These are then followed by physical well-being and free time, with money being ranked by only 27%. All of these are areas important for any generations but particularly poignant to that of Generation X.
Retirement Challenges and Outlook
This generation is likely facing an entirely different future of their retirements and what the later years in life will be like for them. This comes after many historical changes in their lifetime which created both hardships and more responsibility placed onto the individuals themselves. The safety net is now a different process with financial decisions to consider carefully.
Lack of Confidence and Retirement
Most of Gen X lacks confidence in achieving their dreams as compared to many of those both in Millennial and the Baby boomer demographics. The financial goals are being missed as reports are showing 61 percent of Gen Xers do not think they will have the financial standing to experience a fulfilling retirement.
Social Security Concerns
There has been a major concern among Generation X with many saying that social security is going to run out which is far more than both Boomers and Millennials combined. They also will choose to not wait for maximum benefit with only a small percentage waiting until age 70 for social security.
Retirement Savings and Future Preparations
Reports say many in Gen X will need a minimum of 1.1 million dollars for retirement but will not achieve that number only collecting close to 660,000. Many are aware of what needs to be accomplished yet also aware of the difficulties that many of them will experience in doing so with 45% of that demographic who have not started a plan for their future. As such Gen X must seek to find options within those next coming years to plan more diligently to see the outcome they want.
Current Savings and Preparation
In many cases, a great majority has very little to no savings as data points to an average of a bit under $130,000 however that mean average is far lower when viewing a median balance to only $10,000 in a saving account. Additionally 40% has no retirement savings at all as they begin their approach to retirement. For some in upper quartiles the information looks better. This creates a complex economic overview with the generation being split in both preparedness and outcomes.
Financial Planning and Growth Tips
Growing a net worth for a more confident and planned approach are a large priority for the group with advice ranging from savings plans to stock markets. All with the intention of making sure each option available is looked into for making a good decision. Many different financial avenues are now a part of Gen X’s plan for long term.
Investing in Stocks and Retirement
Investment is shown as being most successful when implemented early as there are tax advantage systems that are designed for early action. By staying disciplined and understanding personal expenses these options become an important part of success moving forward. The desire for financial flexibility comes from an early action within the market and is key for retirement planning.
Financial Awareness and Discipline
Debt management and creating clear budgets are very much important in being more prepared. Paying off debts in earlier times helps improve cash flow and making smarter decisions with spending patterns is another option in planning. Knowing what is coming and being organized helps improve overall preparedness for any change.
Key Takeaways
- Generation X faces unique retirement challenges due to societal changes and lack of pensions.
- Their perspective on financial success is influenced by factors beyond money with an increased desire to also prioritize personal happiness.
- Many from Gen X are lacking in preparedness for the future as reports show that are concerned about social security being available or adequate when they will need it.
- Financial planning is recommended to include clear budgeting and also consistent saving approaches for a more secure outcome.
- The need to learn and understand retirement from different views and being active in their own personal savings is paramount to navigate their futures as an example to follow.