EBRI Issue Brief

Comparing the Financial Status of Generation X Families

Jun 27, 2019 25  pages


Generation X is being called the “sandwich” generation because they have reached the point in their lives where they are frequently paying for their children’s expenses — including their college education — while also taking on the responsibilities of caring for their parents. This is happening as they close in on retirement.  This EBRI Issue Brief examines key financial status indicators of Generation X families and compares them with those of older and younger generations. The comparisons not only evaluate the Generation X families against other generations as of 2016 but also by how the indicators differed when prior generations were the same ages as Generation Xers were in 2016. In particular, homeownership, net worth, debt-to-asset ratios, and retirement plan ownership and balances are the emphasis of the analysis.

Key findings:

  • Generation X families in 2016 were more likely to have an individual account (IA) retirement plan than families of Millennial and Baby Boomer generations, but they were less likely than the Baby Boomer families to own a home or have any type of retirement plan.
  • Furthermore, Generation X families had lower homeownership rates than did prior generations of families when their heads were ages 40–51 (e.g., families with heads ages 40–51 in 2004).
  • However, Generation X families in 2016 were more likely to have owned an IA retirement plan (60.1 percent) than families with heads ages 40–51 were in 2004 (58.7 percent).
  • The percentage of Generation X families holding debt in 2016 was lower than it was for the families of the same ages in 2004 (86.8 percent vs. 88.5 percent).
  • The median net worth of families with heads ages 40–51 in 2004 was $151,861 in 2016 dollars. This value decreased to $103,130 for families with heads of these same ages in 2016. Furthermore, the median net worth in 2016 was below the 1992 value for families with heads ages 40–51.
  • Median IA retirement plan balances were the only financial status indicator values that were higher in 2016 than they were in 1992 and 2004. Specifically, the median IA plan balances for families with heads ages 40–51 were $27,486 in 1992, $43,170 in 2004, and $60,000 in 2016.

While Generation X overall showed financial status indicators being below what they were for prior generations overall at their ages in 2016, the impact was not universal across Generation X. The families associated with disadvantaged groups were the driving force for the lower overall financial indicator results. In fact, the families with incomes in the upper two quartiles had nearly equal results to those of prior generations. However, the financial indicators for the Generation X families with incomes in the lower two income quartiles were so much worse than for prior generations that they pulled down the overall results for Generation X. Furthermore, families with minority heads and heads without a bachelor’s degree also did not fare as well as their counterparts after 2004.

Generation X families, while improving their financial status from prior years, are behind financially relative to older generations. How this generation uses its remaining years of working will tell the tale of their financial success in retirement. Will they up their savings? Will they work longer? Will they reduce their debt? All these will be difficult for most to achieve, particularly for the low-income families.