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For Gen X, Retirement Reality Bites

Baby boomers and Millennials tend to talk over the heads of Gen Xers. But the generation in the middle’s sense of snark could pay off in retirement.

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Perhaps because they represent a narrower slice of American society than the generations preceding or following, or that they just tend to be quieter, Generation X, the cohort of the U.S. population born from 1965 to 1981, tends to get overlooked, whether in terms of media coverage, marketing or demographically driven industries like financial planning.

Members of the younger end of the Gen X segment of the population—of which I’m one—are staring down daunting financial commitments of midadulthood: first-time home buying; marriage; perhaps children; and, in the face of the one-two punch of loans and lost earning power from the 2008–’09 financial crisis, building retirement nest eggs. In fact, for older Gen Xers, retirement isn’t that far off: the first Gen Xers turn 50 this year.

Generation X was destined to have the social status of a middle sibling, a kind of gap-filling placeholder. In the late 1980s and early 1990s, when baby boomers weren’t tuned into Thirtysomething or one of many other television series dissecting the vagaries of growing up in the 1960s, the more vocal among them — including a boomer-fixated media — castigated older Gen Xers as shiftless slackers and younger Xers as sociopathic children born of drug addicts and deserving of school metal detectors and locker checks.

Then Millennials came along, content to supplant Gen X’s grunge rock with nu metal and prefabricated pop acts before heading off to college, starting in the 2000s. The worst insult flung their way is that they are narcissistic, thanks to self-esteem-enhancing youth-soccer participation trophies. This translated into a commonly held perception that Millennials can’t manage their money, much less pay the rent or hold a steady job.

Of course, those participation ribbons were mainly an inheritance from boomer parents. For many Gen Xers and Millennials, a ribbon or a trophy may be about all they will get. According to a 2014 study by the Insured Retirement Institute, only 46 percent of baby boomers thought passing on wealth was important, down from roughly two thirds in earlier surveys. Gen Xers are the first generation to shoulder significant student loan debt and, especially among younger members, delay first-time home buying. Older Gen Xers entered the workforce as traditional pensions were getting phased out in favor of 401(k) plans.

Translation: Gen Xers have learned that they had better fend for themselves. In the midst of adulthood, Gen Xers opt for Fridays of restaurant delivery and binge-watching Hulu or Netflix, rather than prepartying before a late-night concert. Settling into their lives, they’re taking stock of what comes ahead. Here, another trait commonly associated with Gen Xers pays off: cynicism. Gen Xers’ ingrained snark has carried over to their view of wealth management: that retirement is a faint possibility. A 2012 Pew Research Center study showed that 44 percent of Gen Xers polled did not feel confident about having enough money for retirement, compared with 35 percent of Millennials and 40 percent of baby boomers.


If anything, Gen Xers see the traditional idyll of retiring at age 65 to wile away time on hobbies or travel as the relic of a lost age. The Generations Apart study, researched and published this year by Allianz Life Insurance Co. of North America, polled 2,000 adults with a minimum household income of $30,000 a year, equally split between men and women and baby boomers and Gen Xers. The majority of both age categories agreed with the statement that retirement at 65 is a “romantic fantasy of the past.” But Gen Xers gave the idea more side-eye. Of Gen Xers polled, 64 percent (compared with 43 percent of baby boomers) noted that they become “bogged down with uncertainty when planning for retirement.” It’s easier to invest with certain outcomes in mind, rather than a weather-all-storms approach. In the poll, Gen Xers and boomers agreed that the Gen Xers surveyed have a tougher time saving money, getting and keeping jobs and staying out of debt.

Of course, many of these survey answers may stem from where people are in their life cycle rather than generational dynamics. Many baby boomers were of the same mind-set as they approached 50, similarly buffeted by macroeconomic storms — employers tend not to want to snap up newly jobless senior-level employees — and the ever swelling costs of higher education for their children and health care for themselves. Gen Xers do have something in their favor: time. This is where some healthy cynicism kicks in. A recent survey from PNC Financial Services showed that of Gen Xer respondents, 65 percent believed retirement was their sole responsibility and did not expect to receive any sort of inheritance, pension or Social Security payments, compared with 44 percent of baby boomers. The Social Security reserve fund is on pace to run dry by 2033, in part because of lopsided demographics favoring boomers.

And whereas the 2008-’09 financial crisis was a late-career hit to boomers, it served as a reality check for Gen Xers: 28 percent of those polled reported putting more away for retirement since the recession, compared with 22 percent for boomers. Also, given their relative youth, Gen Xers have the luxury of taking on more risk in their portfolios. They have more time to invest, and their nest egg has a longer period of tax deferral to feed growth. In short, a collective sense of pessimism has jolted Gen Xers into action.

Gen Xers’ woes are increasingly shared by Millennials as they age. Like Millennials, Gen Xers tended to marry later and delay having children. Perhaps Gen Xers’ experiences with retirement planning — dominated by the sense that it is an insurmountable task — will serve as a proxy for how the younger and larger Millennial generation will fare. The oldest Gen Xers are only 15 years from the traditional retirement age — assuming, of course, that the program remains intact and that Gen Xers continue to drive economic growth and innovation.

Every generational cohort goes through a period of getting scapegoated, whether as directionless nobodies, entitled boomerang children or damn hippies. Gen Xers eventually grew up, got jobs and in some cases, like Amazon’s Jeff Bezos or Google’s Sergey Brin and Larry Page, founded multibillion-dollar companies. Gen Xers are now Millennials’ bosses, and with that come the complaints and triumphs that accompanies the training of the next generation. Given Gen X’s position in the middle, the cohort can train the older generation as well. Gen Xers have the tech-savvy know-how and the “old enough to know better” thing. Indeed, in the past week I advised both a 19-year-old intern and a 50-something senior writer on how to use social media for reporting. Being the middle generation is so bleak.

Yeah, right.

Follow Anne Szustek on Twitter at @the59thStBridge.

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