Dear Gen X: It's Not Your Fault You Suck at Saving

Generation X
Much ink has been spilled in recent weeks about the financial plight of "Generation X" -- and how the much-in-the-news millennials are eating our lunch, economically speaking.

But I'm here to tell you: Buck up, Generation X. Considering the wringer we've been put through these past few decades, we're actually doing all right.

According to survey data just published on financial website
  • 41 percent of Gen Xers have saved less than $100,000 for retirement.
  • 15 percent have begun borrowing from Peter to pay Paul, siphoning funds out of their 401(k) plans ahead of retirement.
  • 23 percent have stopped contributing to their retirement accounts altogether.
The bad news didn't stop there. According to GBR, Gen X has begun eating its young (figuratively speaking), no longer contributing to their kids' college funds, spending the money instead on such luxuries as milk, mortgages and electricity.

Here on DailyFinance, we've seen warnings of how all this has sent Gen Xers' average net worth down 45 percent since 2004 (worse than any other age group). Our debt levels continue to ride higher than those of our predecessors as well. And if we don't get our act together soon (is the implication), we're destined to spend our retirement years eating ramen.

Smells like Teen Spirit

In contrast, the pundits practically shower those young whipper-snappers of "Generation Z" -- the millennials -- with as-yet unearned praise. Though most of the generation hasn't yet entered the workforce, GBR effuses: "Gen Z has a high understanding of today's financial and economical realities ... they have witnessed firsthand not only the recession, but also their own parents struggling to save for and pay for retirement."

And good for them. As the saying goes, it's easier to learn from other people's mistakes than from your own.

If Gen Z can learn some lessons from Gen X's difficulties, without having to endure the pain firsthand -- great! Because Gen X has certainly had its difficulties, lo these past 40 years. Difficulties like...


Gen X is said to have entered upon the world stage in 1967 -- and our timing couldn't have been worse. Annual inflation from 1967 through 2013 averaged 4.3 percent, running more than 34 percent ahead of average rates over the past century.


The early 1990s, when the Gen X vanguard emerged from college and into the workforce, was not a particularly happy period to be looking for a job. And Gen Xers scared off by that first exposure to the real world, who headed to grad school to wait for better days, emerged in the mid-1990s to find things not much better.

Then came the Great Bubble Burst of 2000. And the Great Recession of 2007 and its ugly aftermath. For much of Gen X, it seemed that no sooner had one "economic crisis" gone dormant, and they began earning some bucks, than another slump arrived to either dry up the job market or wipe out their 401(k)s or raze their home equity. Or all of the above.

Considering how badly things have gone for Gen X, it's worth asking: When, exactly, were we supposed to have begun saving for retirement? It's hard to build up significant net worth -- or even pay off your student loans -- when every time you start to get set up, the economy knocks you back down again.


Speaking of student loans, Gen X came of age in a time of spiking costs for everything from health care to education. Gen X has been called the first generation to graduate from college with "significant" student loan debt. According to the Federal Reserve, about 20 percent of Gen Xers are still paying off student loans in their 30s. As for health care, freshman Sen. Elizabeth Warren (D-Mass.) notes that from 1970 through 2008, the cost of health insurance soared 74 percent -- after inflation.

Other People's Bills

If that weren't bad enough, Gen X somehow got saddled with paying for a lot of stuff of very little use to us. Wars in Afghanistan and Iraq come to mind. But a more long-standing issue is the rising cost of government entitlement programs.

Social Security is the most obvious example. We were supposed to be able to count on that one to help pay for our retirements ... but Social Security ran into a deficit three years ago when it began paying out more than it took in. It's looking a bit better now, but the writing's on the wall.

Medicare's another sore spot: In 1965, the Medicare system was set up to alleviate crushing health care costs in old age. Sounded like a good deal at the time, and with Gen X beginning to arrive in delivery rooms a couple years later, this might even have proved helpful to us, eventually.

Problem was, in 1967, a Congressional report estimated that the program would cost the U.S. taxpayers $12 billion annually by 1990. The actual cost that year was $110 billion.

Today, Medicare costs nearly $600 billion annually. At the rate these rates are rising, it's starting to look questionable whether either Social Security or Medicare will still be around by the time Gen X gets to thinking about retirement.

(But don't worry, boomers. We'll still pick up the tab for your Medicare, and your prescription drugs, too. You're welcome.)

Oh Well, Whatever, Never Mind

So when all's said and done, what lessons can the millennials draw from the trials and tribulations of Gen X?

"Don't get your hopes up" is probably the first lesson. Here in Gen X, we've been waiting for things to turn around for 20 years or so, but have finally come to the realization that life isn't always fair.
But also, remember that things could have been worse.

If you recall the single theme woven throughout Douglas Coupland's "Generation X: Tales for an Accelerated Culture" -- the book that gave our generation its name -- it was an abiding, omnipresent fear that we would all die in a Soviet nuclear attack. And, well, at least we dodged that bullet.
So no matter how bad things get with the economy, really, it's all downhill from here.

Motley Fool contributor and Gen X member Rich Smith isn't too worried about retirement. Anyway, he likes ramen.

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Get use to it, this unstable pattern is our future. The "good old days" of this county's growth and financial dominance is behind us.

June 06 2013 at 5:37 PM Report abuse rate up rate down Reply

The bad news, we spend like there is no tomorrow, the good news with Iran and North Korea developing long range nukes, we may be right.

June 05 2013 at 8:00 PM Report abuse rate up rate down Reply

The beehive will die when the drones outnumber the worker bees. We're almost there.

June 05 2013 at 4:02 PM Report abuse +1 rate up rate down Reply

What would be left to save after taxes and inflation? And if we're going to mention "government entitlements", let's indeed address govt know, the pension system, benefits, and retirements that GOVERNMENT employees get? In case you didn't know, these entitlements cost multiple times more than anyone ever got from social security and many of them are able to draw their pensions after 10 to 30 years of employment never mind how old they are at that point.

June 05 2013 at 10:42 AM Report abuse +1 rate up rate down Reply
1 reply to jcagle9595's comment

You whine about one or two percent inflation. Obviously you weren't around in the Carter years when it was 15 percent.

June 05 2013 at 4:03 PM Report abuse rate up rate down Reply

Is that how the parents RAISED them??? No way. Never that one

June 05 2013 at 12:16 AM Report abuse +2 rate up rate down Reply

As usual, blame everyone but yourself. Take no responsibility fo your actions. Remember when you point a finger at someone or something, 3 are pointing back at you.

June 04 2013 at 11:00 PM Report abuse +8 rate up rate down Reply

Hey think about the international welfare the united states hands out, I am pretty sure it exceeds the cost to operate this country,social security,medicare is just a drop in the bucket compared to the money the government borrows and hands out to country's who dislike us, A saying comes to mind it go's like this ,you have to put food on your table first and feed your family and then you may help others, simple concept,why can't the wiz brains in washington figure that out?,the words common sense comes to mind,as for all you generation whatevers out there maybe you should go scratch like we did, maybe accept jobs below what you believe your to good for and as many as you can to get ahead,maybe its are fault we did'nt make you work get your hands dirty ,we payed for your needs, allowed you the knowledge of responsibility,expanded education,better heath care you name it, maybe you should have delivered newspapers, cut lawns ,shoveled snow ,did odd jobs when you were young like most of us did I don't know,maybe you should know that you should be called the smart generation since you are probably smarter then we were,the problems in this world are huge and many are not your fault,so use your great smarts mix it with common sense,avoid making the same mistakes over and over as we did,work hard ,play hard,love hard ,have pride in what you do and you will figure it out remember your the smarter generation use it.

June 04 2013 at 10:39 PM Report abuse +1 rate up rate down Reply

Gen X'ers don't have any money because they waste it on electronic gadgets and new cars.

June 04 2013 at 9:52 PM Report abuse +4 rate up rate down Reply

We really have had one fin crises after another...
And it does SUCK!!!

June 04 2013 at 8:23 PM Report abuse rate up rate down Reply

Of course Social Security is an entitlement. We paid into it and retired at norml retirement, unlike those on SSI. Many on disability are NOT disabled, and needs to be investigated. What is NOT an entitlement program is WELFARE. How many more generations are the taxpayers going to have to pay for virtual deadbeats? Why work when you can live better than those that worked? Section Eight Husing, LIHEAP, aid fo your heating and air conditioning bills. WIC, Cell Phones etc. So please get off my back about those that retired at normal retirement and worked and pain in all those years. You bet we're entitled.

June 04 2013 at 7:19 PM Report abuse +8 rate up rate down Reply
1 reply to AL1PA's comment

Section 8 housing gave my sister and I a shot at being successful in society and it worked out well for us.

June 05 2013 at 12:11 AM Report abuse -2 rate up rate down Reply
1 reply to sigmastef's comment

If by saying "worked out well for us" you mean you got on your feet and off public assistance then bully for you. We've had soooo many well intentioned govt programs that were total failures from abuse, fraud, and incompetent management it isn't even imaginable.

June 05 2013 at 10:46 AM Report abuse rate up rate down