Almost Half of Gen Xers Are In “Financial Survival Mode” Right Now
The one-two punch of the Great Recession and the pandemic has put Generation X in financial survival mode.
More ink tends to be spilled on the Boomers who preceded them and the millennials who succeeded them, but Generation Xers have their own problems. A new report, “Gen X amid the Pandemic,” sheds light on the shaky financial shape those born between 1965 and 1980 were in before COVID-19.
The pandemic has made everything even shakier.
Those birth years mean Gen Xers were between 28 and 43—the prime of their working lives—when the Great Recession hit in 2008. By 2018, their average pretax household income was $106,173 according to the report. That’s well above the U.S. average but barely half of what Baby Boomers are holding. And with fewer working years ahead of them than younger generations, Gen Xers don’t have as much time to collect wealth as Millenials and Generation Z.
Surveys have found that more than half of Gen Xers in the U.S. had lost income due to the pandemic—13 percent were laid off, 18 percent lost salary, and 29 percent were working fewer hours. By the end of 2020, 13 million Gen Xers found it “very difficult” to pay their bills. This is not the picture of a generation in good financial health.
They correspondingly cut their spending from an average of $76,788 in 2019 to $63,036 in 2020, a nearly 18 percent drop shouldered by the approximately half of Gen Xers who said in a May survey that they cut their outlays during the pandemic.
Going forward, 42 percent of Gen Xers expect to be in “survival mode” through 2021, a condition defined as focused on the day-to-day “as I try to get myself and/or my family through the next year.” That’s about the same as the 43 percent of Boomers in that situation, but much more than the share of millennials (34 percent) and Gen Zers (25 percent) who expect to be in survival mode.
Worrying about day-to-day expenses explains why 26 percent of Gen Xers aren’t currently saving for retirement even while more than half say their retirement savings plan is not on track. Difficult, delayed retirements are likely ahead for Generation X; here’s hoping that they don’t have to live in “financial survival mode” until they do.