Sandwiched between baby boomers and millennials, Generation X earned the nickname “the neglected middle child”1 for bridging that gap – and then feeling the squeeze – between the two larger demographics.

Each generation has its own distinct characteristics and experiences, and Gen X (1965-1980) is no different. Gen X, also dubbed with such monikers as “the Lost Generation,” “the MTV Generation” and “the Baby Bust Generation,” spent its formative years enduring some of the most significant social, economic and geopolitical changes.

Understanding Gen X

Growing up in tumultuous economic times, Gen Xers were more likely than previous generations to have divorced or single parents and dual-income households. That socio-economic shift resulted in Gen X becoming the first of the latchkey kids.2 Many came of age witnessing the stagflation and energy crisis of the 1970s, a near-nuclear meltdown, recession and inflation in the ’80s. They also grew up during the dawn of personal computers and subsequent digital age.

Gen X’s earning power and savings were often compromised. They entered a tougher job market with significant student debt and struggled to find financial stability, while grappling with lower salaries, cost-sharing benefits and lack of traditional pension plans. Add the economic disruptions of the dot-com bust, 2008 financial crisis and subsequent Great Recession, and Gen Xers account for just 25.7% of the nation’s wealth, while baby boomers have a little more than half at 51.3%.3 They also carry more debt than baby boomers, including credit cards and unpaid mortgages.

Such shaky financial footing places Gen X on track to becoming the first group to be worse off than their parents – not to mention they are sandwiched again, caring for both their children and elderly parents. In addition, Gen Xers are on target to be the least prepared for retirement than their silent generation (1928-1945) or baby boomer (1946-1964) parents.4 

The challenge is real

When the youngest of the baby boomers reaches full retirement age by 2031, Gen Xers will be on deck waiting their turn – maybe. The retirement landscape for Gen X is different than their parents. A recent retirement survey indicated 47% of Gen Xers fear Social Security funds will dry up before they are ready to retire, and 84% say they are concerned or terrified about not having regular paychecks when retired and 61% are not confident in achieving a dream retirement.5 Others say they don’t plan to retire at all.

The study found savings shortfall for Gen X, the first generation significantly affected by the shift from defined benefit (DB) to defined contribution (DC) plans like 401(k). Despite being among the first adopters of 401(k), many Gen Xers did not have access early in their careers to plan features that have become more widespread in recent years, such as auto features, default QDIAs, target date funds and managed account services.

Plan sponsors offer targeted education

How can you help your “neglected middle child” employees? The survey data6 offers insight to some of Gen Xers’ pain points, which retirement plan sponsors can find opportunities to help:

  • Planning procrastination. According to the report, 45% of Gen Xers say they have not done any retirement planning, compared to 43% of millennials and 30% of baby boomers.
  • Significant savings gap. Gen Xers estimate it will take about $1.1 million in savings to retire comfortably, yet they expect to have just $661,013 saved. This savings gap of $451,170 tops the expected shortfall facing millennials and baby boomers.
  • Bigger portfolio positions in cash. Gen Xers have an average of 32% of their retirement assets in cash, with 63% saying they hang onto their money for fear losing it all through investments, while 24% say they’re not sure how to invest their savings.
  • Social insecurity. Only 11% of Gen Xers plan to wait until age 70 to receive their maximum Social Security benefit payments. Nearly half (47%) fear Social Security may run out of money before they can retire.

Plan sponsors can help Gen X employees gain confidence and control with targeted education and guidance with their retirement planning7:

  • It’s never too late to start. Even the oldest members of this generation have enough time to develop a retirement plan, increase their savings and invest appropriately. The power of tax-deferred compounding over time can still be meaningful for them, and even more so for those at the younger end of the age range.
  • There’s time to catch up. There are savings opportunities for those age 50 and older.
  • Wait and work. Understand the benefits of waiting to take Social Security – and possibly working a few years longer.
  • Money will be there. Learn about the current state of Social Security trust fund solvency. Know there will likely be some changes, but the money won’t “run out.”
  • Diversify and strategize. Understand the role of diversification in a retirement plan investment strategy, especially how maintaining an appropriate allocation in equities will help you stay ahead of inflation.
  • Balance to benefit. The benefit of working with a financial advisor who can help balance retirement planning with other financial challenges, such as college savings or caring for an aging parent.

This article was originally published in the Retirement Insights HUB RPW quarterly newsletter and has been republished with permission from the author.

This material was created for educational and informational purposes only and is not intended as ERISA, tax, legal or investment advice. If you are seeking investment advice specific to your needs, such advice services must be obtained on your own separate from this educational material.

HUB Retirement and Private Wealth offers institutional and retirement services to for-profit and not-for- profit organizations and customized private wealth management services to individuals and families. HUB Retirement and Private Wealth employees are registered representatives of and offer securities and advisory services through various broker dealers and Registered Investment Advisers, which may or may not be affiliated with HUB International. Insurance services are offered through HUB International, an affiliate.

1 Pew Research Center, “Generation X: America’s neglected ‘middle child,’” June 5, 2014.
2 Robert Tanner, “15 influential events that shaped Generation X,” updated January 14, 2024.
3 Board of Governors of the Federal Reserve System, “Distribution of Household Wealth in the U.S. Since 1989,” March 22, 2024.
4 Investopedia, “Generation X: Between Baby Boomers and Millennials,” April 11, 2024.
5 Schroder Investment Management North American Inc., “2023 US Retirement Survey (Gen X and Retirement Report),” December 2023.
6 Schroder Investment Management North American Inc., “2023 US Retirement Survey (Gen X and Retirement Report),” December 2023.
7 Nextavenue, “Reinventing Retirement For Generation X, ” July, 24 2023.