The Newest 55-Plussers: Here Comes Gen X

How will the next generation of 55-plussers change the demographic’s approach to finances?

By Deborah Jeanne Sergeant

While the baby boomers and millennials have been duking it out on social media as to who ruined what, the generation in between, generation X, has been quietly growing older.

Depending on the generational cut-off, the oldest gen-Xers are between 55 and 57.

How will the next generation of 55-plussers change the demographic’s approach to finances?

“The core values of people that identify as a Gen-Xer include diversity, self-reliance, practicality, informality, a work life, balance, flexibility and technology,” said Rita Worlock, licensed clinical social worker in private practice in Liverpool. “Unlike past 55-plus generations, Gen-Xers give their best when their responsibilities in the workplace align with their values. Their performance suffers when their values are ignored as they seek validity to promote that work life balance.”

They often use technology to help increase leisure time, such as automating as much as possible. Their tech savviness can make a big difference in their finances.

“Midlife people right now use technology more frequently and shop online much more than their parents did and do,” said Randy L. Zeigler, certified financial planner and private wealth adviser with Ameriprise Financial in Oswego.

Using tech to manage finances can make it easier, such as online banking, automatic bill paying and remote deposit. But it can also mean spending more online. The ease of ordering the deliver of food and goods can make money vanish quickly.

The thrifty baby boomers —brought up hearing about the Great Depression from their parents or grandparents — have prized thrift and eschewed debt. Growing up in the glitz of the 1970s and ‘80s may have skewed Gen X in a different direction, with less emphasis on saving and investing.

Gen X members “probably do less budgeting of expenses versus earlier generations,” Zeigler said. “When I am preparing a financial plan for clients, the greatest challenge is getting them to accurately prepare a cashflow worksheet for me that clearly represents how they spend money and how much they need to support their current lifestyle versus the lifestyle they wish to support during their retirement years.”

He thinks this may reflect lack of concern about long-term finances. He also sees many Gen Xers who are unaware of their annual income. Fewer have a defined benefit pension than baby boomers or silent generation members.

“There is much greater onus on the midlife folks to accumulate their retirement capital,” Zeigler said. “Some realize this fact and are saving and investing well; others do not.”

The demands on Gen X finances affects their ability to squirrel away funds into a retirement fund. Gen X has become a “sandwich generation,” caring for their own children while helping their aging parents. This puts additional financial strain on a generation that likely has not been as frugal as baby boomers.

“Gen Xers are less likely to have any retirement plan than their parents did at the same age,” Worlock said. “Frankly, Gen-Xers could actually learn more from Millennials when it comes to saving for retirement. Gen-Xers tend to be pessimistic as they don’t feel confident that they will be able to retire.

The Gen-Xer tends to be pessimistic about finances as well because with work, family and life commitments colliding, they are acutely concerned about living a longer and more financially fruitful life.”

The costs of education and healthcare have risen exponentially. The US Bureau of Labor Statistics states that prices for college tuition and fees are 1,461.32% higher in 2022 versus 1977. The bureau also states that the prices for medical care services have grown by 7,123.08% from 1935 to 2022. The buying power of a dollar is only 18.127% of what it was in 1975. To make times even tougher, Gen X faces a retirement of hardship.

At this point, Gen-Xers should strive to improve their financial status by eliminating debt, especially credit card debt. Starting early on retirement planning is ideal. However, starting at any age is better than not starting at all. Working with a financial adviser can help create a plan for retirement that makes sense with the person’s obligations, income and goals.