Compared to Gen Zers and millennials, Gen Xers are generally more likely to report healthy financial behaviors and less likely to engage in unhealthy ones, but they’re more anxiety-ridden about finances, according to new research Finra released today.
Despite indications of relatively good financial health, few Gen Xers reported positive feelings about their financial situation. “Instead, their views were similar to or more negative than those of the less affluent Gen Zers and millennials, and much more negative than those of baby boomers,” the authors of “How Gen-X Compares Financially to Other Generations: Doing Alright But Feeling Bad." said.
Gen-Xers—defined as those born between 1965 and 1980 and often labelled the forgotten generation—have often experienced negative and novel historical events, which seem to have left an indelible mark on their financial perceptions, the researchers said.
“From the dot-com bubble, ensuing recession and the tragic events of September 11, 2001, when many Gen Xers had just entered the workforce, to the economic fallout of the Great Recession in their peak earning years and the repercussions of the Covid-19 pandemic, which transpired as their retirement draws near, Gen X has faced many challenges,” authors K. Jeremy Ko, the 2024 Finra Foundation Ketchum visiting scholar, and Finra Education Foundation researchers Olivia Valdes. Ritta McLaughlin and Gary R. Mottola said.
Sixty percent of Gen Xers have retirement accounts, compared with 33% for Gen Zers, 52% for millennials and 68% for baby boomers, according to the survey.
Fifty-five percent of Gen Xers report having an employer-sponsored retirement account, 27% have a non-employer retirement account and 35% have no retirement accounts. While 29% of baby boomers report having no retirement account, that compares favorably to the 48% of millennials who report having no retirement account.
When it comes to retirement plan leakage, or the loss of retirement savings pre-retirement through loans or hardship withdrawals, only 10% of Gen X retirement account owners reported taking a loan from their retirement account, while 9% took a hardship withdrawal.
“More than eight in 10 Gen Xers reported contributing to an account, a rate second only to millennials, 83% of whom reported making plan contributions,” the report's authors said.
When it comes to home ownership and mortgage debt, Gen-Xers also appear to be wisely using credit, according to the survey. Gen Xers (37%) are most likely to have a mortgage, possibly because a greater proportion of homeowners in older generations have already paid off their mortgages. Only 30% of boomers report having a mortgage. Still, most Gen X mortgage holders do not appear to be overly strained from bearing mortgage debt, Finra reported.
Fifteen percent of Gen Xers with mortgages reported having made late payments in the past 12 months, compared to 56% of Gen-Z and 31% of millennial mortgage holders. “Hence, it appears a larger proportion of younger mortgage holders have difficulty paying their mortgage than older mortgage holders,” the authors said.
When it comes to debt strain, including the number of costly credit card behaviors different generations engage in, researchers found that debt strain peaks for millennials, not Gen Xers.
“In fact, Gen Xers, on average, engage in fewer costly credit card behaviors than either Gen Zers or millennials,” the researchers said.
But Gen-Xers are feeling the strain of student loan debt. Some 56% of Gen Xers report feeling strain from having student loan balances—more than millennials (55%) and Gen Z (50%). Eighteen percent of Gen Xers took out the debt for a spouse, child, grandchild or someone else.
“When asked if they worry about being unable to pay off their student loans, 56% of Gen X student loan holders reported concern about their ability to repay. This sense of financial unease among Gen X is consistent with their perceptions about their financial well-being and satisfaction,” Finra researchers said.
In conclusion, the researchers said Gen Xers are a generation at the crossroads. “Analyses show that relative to other generations, Gen Xers are doing fairly well financially, at least in terms of retirement preparedness and debt management. However, in some areas, they indicate high levels of strain. For example, many Gen Xers reported feeling that they have ‘too much debt,’” researchers said.