Financial Insecurity Weighs Heavily on Gen X

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%).

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.