Joe DiSanto, Wealth of Geeks
According to the Pew Research Center, as of April 2020, Gen X represents over 65 million people, or around 20% of the global population. As Generation X, those born between 1965 and 1980, inches closer to retirement, concerns over credit card debt and a lack of retirement savings become primary focuses, especially when compared to what younger generations worry about.
Debt.com surveyed Americans to determine the correlation between mental health and finances. As part of the survey, Gen X ranks at the top of one significant poor spending habit. 67% admit to taking on more debt as a stress response. Gen X is also the most likely to argue with a significant other over credit cards and spending. This creates what Debt.com chairman and CPA Howard Dvorkin calls “a vicious cycle.”
“You fall behind on your bills, so you distract yourself with dinner out or some shopping therapy. Of course, that adds to your debt, which adds to your stress, which depletes your mental health. And our research shows it’s getting worse every year,” Dvorkin explains.
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Credit cards: The biggest financial regret
In May, Debt.com also polled 1,000 Americans about their biggest financial regrets. 78% of respondents felt regret over their finances, though only about 19% of Gen X respondents claim they regret their credit card debt.
The extent of that credit card debt among respondents was higher than expected. More than one quarter (26%) report carrying a balance from $15,000 to $30,000, while 15% acknowledge a debt between $30,000 and $50,000.
Nearly half of respondents admit their credit card debt is a constant source of worry, and is “always on their mind.” What’s more, the passage of time seems to amplify this remorse. More than one third (35%) confess to feeling even worse about their credit card debt now than they did just a year ago.
Gen X does not, however, regret the student loan debt they’ve taken on.
35% of Gen X say they took out $200,000 or more in student loans.30% borrowed between $100,000 to $200,000.More than 30% say they still owe $200,000 or more.61% have been paying that debt for 7 to 10 years.17% say they’ve been making payments for around 11 to 15 years.
That’s not to say they still don’t wish they had made smarter moves. Heidi Bender is a Gen Xer and the owner of Tons of Thanks. “My biggest regret is not setting aside a large amount in cash savings before quitting my day job,” Bender explains. “I thought I was making a smart decision at the time, as I had a significant amount saved in 401(k)s. I didn’t account for the chance that my websites would eventually no longer provide a full-time income. Having easy-to-access cash would have helped smooth out the drop in income.”
Bender continues, “Also, I regret not investing more when I was younger. I would have saved so much more in my investment accounts if I had. Back when I first started working, I didn’t know much about investing. My parents taught me to save but not to invest, other than signing up for the 401(k) offered at work. The younger generations have an advantage with so much financial information that is easily available online.”
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Gen X isn’t saving enough for retirement
Though elder Gen Xers near retirement age, studies show that they’re not saving enough money to actually do so, According to a 2023 report by the National Institute on Retirement Security (NIRS), the bottom half of Gen X earners have only a few thousand dollars saved for retirement, and the typical household has only $40,000 in retirement savings. Retirement savings for Generation X are highly concentrated among the highest earners, while Blacks and Hispanics have substantially lower savings and access to retirement plans as compared to Whites.
“Gen Xers are fast approaching retirement age, but the data indicates that the vast majority are not even close to having enough savings to retire,” says Dan Doonan, NIRS executive director. “This really isn’t surprising given the terrible retirement hand that has been dealt to the latchkey generation. Most Gen Xers don’t have a pension plan, they’ve lived through multiple economic crises, wages aren’t keeping up with inflation, and costs are rising. The American Dream of retirement is going to be a nightmare for too many Gen Xers.”
“The smartest financial decision my wife and I made was to live off one income when we had higher salaries,” says Gen Xer Jon Dulin, with Money Smart Guides. “Her income easily covered all our bills, so we put my entire paycheck into a 401(k) and our Roth IRAs. We did this for three-to-four years until our first child was born. It definitely helped that we were younger when we did this as it allowed more time for the money to compound. Because of this, we are on track to retire early.”
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Gen X doesn’t trust AI to manage money
According to Northwestern Mutual’s 2024 Planning & Progress Study, younger Americans turn to an outlet that Gen X has strayed from. Millennials and Gen Z are far more optimistic about AI’s potential to help them reach their financial goals. More than half of Gen Zers (57%) and millennials (55%) say they are excited about the impact AI tools could have on their financial lives. Meanwhile, older Americans are more skeptical — only 38% of Gen Xers and 23% of Boomers say they are excited about implementing AI in their financial planning.
“Younger generations are more willing to accept having their financial services partners leverage GenAI to manage their money,” says Christian Mitchell, executive vice president and chief customer officer at Northwestern Mutual. “The bottom line is this: artificial intelligence can help organizations find human capacity, not replace it.”
Debt.com surveyed Americans to determine the correlation between mental health and finances. As part of the survey, Gen X ranks at the top of one significant poor spending habit. 67% admit to taking on more debt as a stress response. Gen X is also the most likely to argue with a significant other over credit cards and spending. This creates what Debt.com chairman and CPA Howard Dvorkin calls “a vicious cycle.”
“You fall behind on your bills, so you distract yourself with dinner out or some shopping therapy. Of course, that adds to your debt, which adds to your stress, which depletes your mental health. And our research shows it’s getting worse every year,” Dvorkin explains.
—————
Credit cards: The biggest financial regret
In May, Debt.com also polled 1,000 Americans about their biggest financial regrets. 78% of respondents felt regret over their finances, though only about 19% of Gen X respondents claim they regret their credit card debt.
The extent of that credit card debt among respondents was higher than expected. More than one quarter (26%) report carrying a balance from $15,000 to $30,000, while 15% acknowledge a debt between $30,000 and $50,000.
Nearly half of respondents admit their credit card debt is a constant source of worry, and is “always on their mind.” What’s more, the passage of time seems to amplify this remorse. More than one third (35%) confess to feeling even worse about their credit card debt now than they did just a year ago.
Gen X does not, however, regret the student loan debt they’ve taken on.
35% of Gen X say they took out $200,000 or more in student loans.30% borrowed between $100,000 to $200,000.More than 30% say they still owe $200,000 or more.61% have been paying that debt for 7 to 10 years.17% say they’ve been making payments for around 11 to 15 years.
That’s not to say they still don’t wish they had made smarter moves. Heidi Bender is a Gen Xer and the owner of Tons of Thanks. “My biggest regret is not setting aside a large amount in cash savings before quitting my day job,” Bender explains. “I thought I was making a smart decision at the time, as I had a significant amount saved in 401(k)s. I didn’t account for the chance that my websites would eventually no longer provide a full-time income. Having easy-to-access cash would have helped smooth out the drop in income.”
Bender continues, “Also, I regret not investing more when I was younger. I would have saved so much more in my investment accounts if I had. Back when I first started working, I didn’t know much about investing. My parents taught me to save but not to invest, other than signing up for the 401(k) offered at work. The younger generations have an advantage with so much financial information that is easily available online.”
—————
Gen X isn’t saving enough for retirement
Though elder Gen Xers near retirement age, studies show that they’re not saving enough money to actually do so, According to a 2023 report by the National Institute on Retirement Security (NIRS), the bottom half of Gen X earners have only a few thousand dollars saved for retirement, and the typical household has only $40,000 in retirement savings. Retirement savings for Generation X are highly concentrated among the highest earners, while Blacks and Hispanics have substantially lower savings and access to retirement plans as compared to Whites.
“Gen Xers are fast approaching retirement age, but the data indicates that the vast majority are not even close to having enough savings to retire,” says Dan Doonan, NIRS executive director. “This really isn’t surprising given the terrible retirement hand that has been dealt to the latchkey generation. Most Gen Xers don’t have a pension plan, they’ve lived through multiple economic crises, wages aren’t keeping up with inflation, and costs are rising. The American Dream of retirement is going to be a nightmare for too many Gen Xers.”
“The smartest financial decision my wife and I made was to live off one income when we had higher salaries,” says Gen Xer Jon Dulin, with Money Smart Guides. “Her income easily covered all our bills, so we put my entire paycheck into a 401(k) and our Roth IRAs. We did this for three-to-four years until our first child was born. It definitely helped that we were younger when we did this as it allowed more time for the money to compound. Because of this, we are on track to retire early.”
—————
Gen X doesn’t trust AI to manage money
According to Northwestern Mutual’s 2024 Planning & Progress Study, younger Americans turn to an outlet that Gen X has strayed from. Millennials and Gen Z are far more optimistic about AI’s potential to help them reach their financial goals. More than half of Gen Zers (57%) and millennials (55%) say they are excited about the impact AI tools could have on their financial lives. Meanwhile, older Americans are more skeptical — only 38% of Gen Xers and 23% of Boomers say they are excited about implementing AI in their financial planning.
“Younger generations are more willing to accept having their financial services partners leverage GenAI to manage their money,” says Christian Mitchell, executive vice president and chief customer officer at Northwestern Mutual. “The bottom line is this: artificial intelligence can help organizations find human capacity, not replace it.”
