Gen X Is Labeled The 'Economy's Struggling Middle Child' Carrying Significant Financial Burdens – Median Retirement Balance Is Only $10,000

Gen X – often called the "sandwich generation" for juggling responsibilities to both aging parents and growing kids – has earned yet another nickname: the economy's struggling middle child. It's a fitting title for a generation that finds itself overlooked, stuck between the much-discussed Millennials and Baby Boomers. They're also the generation carrying some of the heaviest financial burdens.

So, is Gen X really in as much trouble as it seems? Well, it depends on the study, but the data paints a pretty sobering picture. Between retirement shortfalls, rising debt and competing financial priorities, Generation X is navigating an increasingly tight economic squeeze.

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Financial Pressures Mounting

A 2024 Allianz Life Retirement Study revealed that 64% of Gen Xers are focused on paying off debt as a means to reach their long-term financial goals. That's higher than both Millennials and Baby Boomers, who each reported 54%. With retirement looming – many in this cohort have only 10 to 15 years left in their working lives – the financial realities are hitting hard.

"With only 10 to 12 years left [before retirement], they're realizing they lack savings while carrying significant financial burdens," Kelly LaVigne, vice president of advanced markets and solutions at Allianz Life, explains, as reported by Plan Advisor. 

A Retirement Crisis in the Making?

Let's talk savings – or the lack thereof. A 2023 study by the National Institute on Retirement Security (NIRS) highlighted a critical issue: the median retirement account balance for Gen X is just $10,000. The typical Gen X household has around $40,000 saved, but that’s far from enough for a group nearing their 60s.

To put this in perspective, financial experts recommend saving at least six to eight times your annual income by retirement. For many Gen Xers, reaching that goal will require significant changes in their financial habits – and fast.

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The Post-Pandemic Debt Dilemma

Gen X’s financial struggles are not entirely self-inflicted. The pandemic, followed by inflation, has only made things worse. Spending surged after lockdowns, but so did prices, leaving many Gen X families in debt. Rising interest rates have made it more expensive to carry credit card balances and second mortgages, adding to their woes.

Gen X discretionary spending was down 2% year-over-year in August 2024, marking the sharpest decline among all generations. Analysts believe this slowdown is partly due to Gen X allocating more of their budget to necessities like housing, health care and education.

Why the Financial Squeeze?

What's behind Gen X's struggle to stay afloat? A few key factors stand out:

Rising Outlays on Necessities: Gen X has shifted spending away from discretionary purchases to cover essentials. Bank of America data shows this generation devotes the largest share of its budget to necessities.

Caring for Others: Gen X is uniquely burdened by dual caregiving responsibilities. Many support their aging parents while helping their adult children with college tuition or housing costs.

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A Lack of Retirement Savings: Employer-sponsored retirement plans have failed to deliver for many Gen Xers. Participation rates are low; many workers have had to save to cover unexpected expenses.

Financial Anxiety:

Gen Xers’ financial anxiety stems from a perfect storm of economic events. As they entered the workforce, they were immediately hit by the dot-com bubble burst. Before they could recover, the Great Recession struck, followed by the coronavirus recession. This triple blow has left deep financial scars, setting back their economic progress and fueling ongoing anxiety.

Gen X's Economic Role: Punching Above Their Weight

Despite their challenges, Gen X is outsized in the U.S. economy. According to the Bureau of Economic Analysis (BEA), Gen X accounted for over 33% of consumer spending in 2022, even though they make up only 27% of households. However, their spending power appears to be weakening. Since early 2023, Bank of America data shows Gen X card spending has declined significantly, reflecting financial pressures across the board.

See Also: I’m 62 Years Old And Have $1.2 Million Saved. Is This Enough to Retire Stress-Free? 

Is There Hope for Gen X?

While Gen X's financial outlook seems bleak, some experts suggest a silver lining may emerge in the form of the "great wealth transfer." Baby Boomers are expected to pass down trillions of dollars in assets over the coming decades, which could help boost Gen X's financial standing.

But in the short term, the struggles remain very real. Balancing rising costs, shrinking savings and caregiving responsibilities is no small task. And with retirement looming, many Gen Xers are left asking themselves: Will I have enough to make it?

As this generation enters its golden years, its story will likely serve as a cautionary tale – one that highlights the importance of planning ahead and navigating life's financial challenges with care. For now, though, the "economy's struggling middle child" is doing what they've always done: carrying the weight, often quietly but undeniably.

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