Financial Insecurity Weighs Heavily on Gen X

Struggling to balance debt, retirement savings and family responsibilities, members of Generation X face myriad financial challenges.

Financial insecurity looms over Generation X, according to recent studies from Allianz SE and Nationwide, as many individuals in this cohort struggle to balance debt repayment, retirement savings and family obligations.

In Allianz Life’s 2024 Annual Retirement Study, 55% of Americans said they are focused on paying off debt to achieve long-term financial goals. This sentiment was most pronounced among Gen Xers (64%), outpacing Millennials (54%) and Baby Boomers (54%).

For more stories like this, sign up for the PLANADVISERdash daily newsletter.

Debt, particularly non-housing obligations such as payments on cars, credit cards and student loans, is a major barrier limiting this group’s saving for retirement. Nearly half (46%) of Americans who wish they had saved more for retirement cited these debts as limiting factors. But Millennials reported feeling this strain most acutely at 56% of respondents, followed by Gen Xers (50%) and Boomers (35%).

Housing debt is another significant challenge, with 34% of respondents pointing to it as a roadblock to retirement savings. Gen Xers led the generations in identifying this issue, at 39%, compared with Boomers (34%) and Millennials (33%), according to Allianz.

Gen X Faces Triple Whammy

In a BlackRock Inc. annual retirement survey released Tuesday, the asset manager also found that Gen X is in the most difficult position when it comes to retirement preparedness. Members of that generation reported the lowest confidence of being on track to live their desired lifestyle in retirement, coming in at 60% of respondents. That was less than every other generation and of workers overall, which came in at 68%.

Generation X, with members now in their 50s and 60s, is confronting mounting debt while preparing for retirement. Many are still paying off their children’s education, managing housing debt and trying to save for retirement.

“With only 10 to 12 years left [before retirement], they’re realizing they lack savings, while carrying significant financial burdens,” says Kelly LaVigne, a vice president of advanced markets and solutions at Allianz Life.

Economic pressures, worsened by post-pandemic spending and inflation, have compounded the challenge.

“Spending surged after lockdowns, but rising prices and interest rates have left families deeper in debt,” LaVigne says.

Credit card balances and second mortgages have added to their struggles, leaving many financially strained as they approach retirement.

To help, LaVigne recommends prioritizing high-interest debt repayment and leveraging employer programs like 401(k) matches on student loan payments. Supporting employees with tailored financial planning can ease their burden and improve long-term retirement readiness.

Financial Pressures and Outlook

A separate study—Nationwide’s 10th annual “Advisor Authority Report”—revealed that Gen X is the least optimistic generation about next year’s financial outlook, with only 36% expressing confidence. This trailed Millennials (49%), Boomers (45%) and even Gen Z (40%).

Adding to their challenges, more than half (56%) of Gen X investors are financially supporting their parents or children (sometimes both), and 21% of these individuals report taking on significant debt to do so. To manage these obligations, 24% rely on credit card debt, while 35% cut nonessential expenses.

Meanwhile, Nationwide noted that the path to retirement readiness remains daunting for many Gen Xers. One in five (20%) believe they need at least $2 million saved to feel financially secure in retirement. Yet only 7% report having reached this milestone, and just 16% have saved half that amount ($1 million). Alarmingly, 30% report having less than $100,000 in retirement savings.

Despite these long-term challenges, some Gen X investors are proactively responding to immediate economic pressures. Among pre-retirees aged 55 through 59, 60% have adjusted their portfolios to counter inflation, and 67% feel prepared to weather a potential recession in the coming year. However, 10% reported still struggling to cover basic expenses like groceries and utilities.

The Allianz Life survey was conducted online in February and March, sampling 1,000 Americans aged at least 25. Meanwhile, Nationwide’s study polled 2,496 investors and 610 financial advisers between August 26 and September 13. BlackRock surveyed 1,308 workplace savers from January through March.

Kevin Hassett Announced as Trump’s Pick to Head National Economic Council

Hassett is known in the retirement industry for a paper he co-authored that expressed support for creating something similar to the federal Thrift Savings Plan for private sector workers.

President-elect Donald Trump announced his intention to appoint economist Kevin Hassett as director of the National Economic Council, replacing current director Lael Brainard, when Trump takes office on January 20, 2025.

As director, Hassett would work closely with the secretary of the treasury to implement Trump’s economic policy objectives, which have largely been centered around cutting taxes, increasing tariffs and expanding energy production.

For more stories like this, sign up for the PLANADVISERdash daily newsletter.

Hassett previously served as chair of the Council of Economic Advisers in Trump’s first administration from 2017 to 2019 and served as a senior adviser to Trump during the early stages of the COVID-19 pandemic in 2020. He is currently a distinguished fellow in economics at the Hoover Institution, a public policy think tank. While serving in the prior Trump administration, Hassett defended Trump’s tax cuts and trade policies but also acknowledged that tariffs can weaken economic growth.

Prior to working for Trump at the White House, Hassett was an economist at the American Enterprise Institution and served as a senior economist for the Federal Reserve Board of Governors.

Created in 1993 by executive order, the NEC has four key functions: to coordinate policymaking for domestic and international economic issues; to give economic policy advice to the president; to ensure that policy decisions and programs are consistent with the president’s economic goals; and to monitor implementation of the president’s economic policy agenda.

Hassett co-authored a 2021 white paper, along with Teresa Ghilarducci of The New School, arguing that the current defined contribution retirement system favors higher-earning workers by being based on “tax benefits through deductions, as opposed to credits or direct matches.” Hassett and Ghilarducci expressed support for the Retirement Savings for Americans Act of 2023—legislation that would give American workers access to portable, tax-advantaged retirement savings accounts, with federal matching contributions for certain low-and middle-income workers.

The bill has bipartisan support and was introduced by Senators John Hickenlooper, D-Colorado, and Thom Tillis, R-North Carolina, and Representatives Terri Sewell, D-Alabama, and Lloyd Smucker, R-Pennsylvania. It has not yet been passed by the House or Senate.

Ghilarducci says Trump “could not have chosen better in selecting [Hassett] as his chief adviser.”

“Kevin is not an ideologue; rather, Kevin is a highly talented economist who approaches strategy and policy puzzles with a commitment to finding practical, inclusive solutions,” she says. “During our collaboration on addressing the gapping retirement wealth inequality, I’ve come to appreciate Kevin’s deep concern for the economic security of working people—a security that depends heavily on Social Security and bold, forward-looking pension reforms.”

Ghilarducci and Hassett’s white paper was funded by the Economic Innovation Group, of which Hassett is a founding co-chair and current member of the economic advisory board.

“Kevin Hassett is a phenomenal choice to lead the National Economic Council,” said EIG President, CEO and Co-Founder John Lettieri in a statement. “The country will be fortunate to once again have the benefit of his deep experience and policy acumen in the White House. Throughout his career, Kevin has been a tireless advocate for policies that spur economic growth and uplift left-behind workers and communities.”

Trump also recently announced his plans to nominate Representative Lori Chavez-DeRemer, R-Oregon, as secretary of labor and hedge fund manager Scott Bessent to be secretary of the treasury. The cabinet positions, unlike the NEC position, need to be confirmed by the Senate after Trump re-takes office in 2025.

«