Gen X, Dubbed 'America's Forgotten Middle Child,' Boasts Highest Household Income — Take a Guess How Much They Earn

A new report from the U.S. Census Bureau reveals that Generation X — those born between 1965 and 1980 — has quietly climbed to the top of the income ladder. Households aged 45 to 54, a prime Gen X demographic, boast the highest median income at $101,500, surpassing all other age groups.

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This revelation might come as a surprise, as Gen X is often characterized as the "latchkey kids" or "America's forgotten middle child," sandwiched between two larger cohorts. Yet, as they settle into their peak earning years, Gen Xers demonstrate significant financial success.

Despite their income success, Generation X faces some financial challenges, particularly in planning for retirement. Many are still grappling with the consequences of student loan debt, escalating housing costs, and economic setbacks from the Great Recession, which have hindered their ability to save adequately for retirement. 

Estimates suggest that a comfortable retirement would require around $1,112,183, but the average savings expected by Gen Xers is about $661,013, leaving a substantial gap of $451,170. This shortfall surpasses those anticipated for both Millennials and Baby Boomers.

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Surveys by organizations like the American Society of Pension Professionals and Actuaries and Schroders reveal concerning trends: 45% of non-retired Gen Xers have not begun any form of retirement planning, and 61% express doubts about achieving their desired retirement lifestyle. Additionally, a significant portion of Gen Xers — 32% — hold their retirement assets in cash, driven by fears of potential losses and uncertainty about investment strategies.

Deb Boyden, Head of U.S. Defined Contribution at Schroders, emphasizes the situation’s urgency in a public statement. "The size of the retirement savings gap facing Gen X is concerning, as they are the first generation to depend on 401(k) primarily plans rather than pensions, and they are next in line to retire," she notes. However, she also offers optimism, explaining that even the oldest Gen Xers can improve their retirement readiness. She suggests using this time to develop a retirement plan and increase their savings rate. 

Looking ahead, only 11% of non-retired Gen Xers plan to delay claiming their Social Security benefits until age 70 to maximize their payouts, with a substantial 47% worried that Social Security funds might deplete before they claim. This anxiety is more pronounced among Gen Xers than in the preceding Baby Boomer and succeeding Millennial generations.

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Generation X has some advantages, however. Their higher income levels could provide opportunities to enhance their retirement savings in the coming years significantly. Known for their resourcefulness and resilience — traits shaped during their independent upbringing — Gen Xers are well-equipped to tackle these financial challenges.

To better prepare for the future, financial experts advise Gen Xers to maximize their retirement contributions, pay down high-interest debt, and establish a detailed budget to identify potential savings areas. Seeking personalized advice from financial advisors is also crucial to tailor a retirement plan that aligns with individual goals and circumstances.

As Gen X stands at the intersection of substantial income and retirement planning challenges, their journey represents a blend of achievement and caution, emblematic of their unique position within the generational spectrum.

Don’t count yourself out even if you don’t see yourself as a high earner! Retirement isn’t a one-size-fits-all situation. With 79% of retirees relying on a mix of income sources — including Social Security, pensions, savings, and even part-time work — there are plenty of paths to a comfortable retirement. 

The key is to take proactive steps now, regardless of your income level. Start by assessing your financial goals and exploring your options. Talk to a financial advisor who can help you create a personalized plan that aligns with your unique needs and dreams. Remember, it’s never too late to take charge of your future!

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*This information is not financial advice, and personalized guidance from a financial adviser is recommended for making well-informed decisions.

Jeannine Mancini has written about personal finance and investment for the past 13 years in a variety of publications including Zacks, The Nest, and eHow. She is not a licensed financial adviser, and the content herein is for information purposes only and is not, and does not constitute or intend to constitute, investment advice or any investment service. While Mancini believes the information contained herein is reliable and derived from reliable sources, there is no representation, warranty, or undertaking, stated or implied, as to the accuracy or completeness of the information.