The Forgotten Generation: Shining a Spotlight on Gen X’s Financial Health

Gen X is often called the Forgotten Generation given how often they're overlooked in favor of conversation around boomers, millennials or now even Gen Z. But not today.

On this episode, Gen X is the one in the spotlight as we sit down Gary Mottola, research director with the FINRA Foundation, Ritta McLaughlin, director of community outreach with FINRA's Investor Education team, and Jeremy Ko, the 2024 FINRA Foundation Ketchum Visiting Scholar, to dig into the financial health of those born between 1965 and 1980 and, importantly, their perception of their own financial well-being.

Resources mentioned in this episode:

How Gen X Compares Financially to Other Generations: Doing Alright but Feeling Bad

FINRA Foundation National Financial Capability Study

Episode 19: Debunked: 7 Myths about Millennials-the Underinvested Generation

Episode 22: Millennials and Money: How to Get Started on the Road to Investing

Episode 134: Gen Z Investors: A Look at the Attitudes and Behaviors of the Youngest Investors

Listen and subscribe to our podcast on Apple Podcasts, Google Podcasts, Spotify, YouTube or wherever you listen to your podcasts. Below is a transcript of the episode. Transcripts are generated using a combination of speech recognition software and human editors and may contain errors. Please check the corresponding audio before quoting in print.

FULL TRANSCRIPT

00:00 - 00:32

Kaitlyn Kiernan: Gen X is often called the Forgotten Generation given how often they're overlooked in favor of conversation around boomers, millennials or now even Gen Z. But not today. On this episode, Gen X is the one in the spotlight as we sit down with three individuals from the FINRA Foundation and FINRA Investor Education team-all Gen Xers, I might add-to dig into the financial health of those born between 1965 and 1980 and, importantly, their perception of their own financial well-being.

00:32 - 0:41

Intro Music

00:41 - 01:22

Kaitlyn Kiernan: Welcome to FINRA Unscripted. I'm your host, Kaitlyn Kiernan. I'm also a millennial and used to being in the demographic spotlight, at least until Gen Z usurped us. But today, I'm welcoming three guests, all from Gen X, the Forgotten Generation, to talk about a new study by the FINRA Foundation shining a light on the financial health of this cohort for the first time. Joining me are Gary Mottola, research director with the FINRA Foundation, Ritta McLaughlin, director of community outreach with FINRA's Investor Education team, and Jeremy Ko, the 2024 FINRA Foundation Ketchum Visiting Scholar. Jeremy, Ritta and Gary, thanks for joining me, and welcome to the show.

01:23 - 01:23

Jeremy Ko: Thanks for having us.

01:24 - 01:25

Ritta McLaughlin: Thank you, Kaitlyn.

01:25 - 01:45

Kaitlyn Kiernan: So, to kick us off, can you each introduce yourselves? Tell us a little bit about your background and I think on a scale of 1 to 10, how much you identify with the latchkey kid moniker-with one being not at all, your parents were like the original helicopter parents to ten being full on latchkey. Gary, do you want to start?

01:45 - 02:15

Gary Mottola: I am the research director at the FINRA Foundation. I've been here for 14 years. So, obviously the research that primarily looks at financial capability in America is one line of research, and that's what we're going to be talking about today. But we also do research on how to protect consumers from financial fraud. So, you think we do focus on research that helps people build wealth and protect their wealth. And yes, I was one of six kids and I was out there running around with not a whole lot of oversight. My mom is great. My dad's great. Family is great. But it was different back then. So, I completely identify with the latchkey moniker.

02:16 - 02:18

Kaitlyn Kiernan: Awesome. And Ritta, how about you?

02:19 - 03:18

Ritta McLaughlin: Hi, I'm Ritta McLaughlin, director in the FINRA Investor Education Foundation, and I lead the foundation's efforts to advance financial inclusion in the capital markets. And that, of course, includes collaborating with the foundation's researchers, Gary and Jeremy, on studies to advance understanding of financial capabilities, circumstances and well-being. And I also cultivate strategic partnerships with organizations that provide financial capability programming and engage communities to build and protect wealth so that individuals can fully and equitably participate in the financial mainstream. And as it relates to identifying as a latchkey kid, I'm actually going to say I'm more part of the MTV generation, which sometimes Gen X is referred to. I think about the first Duran Duran videos and watching the Michael Jackson videos on MTV in its early, early days. And so not so much a latchkey, but more of the MTV version of Gen X.

03:19 - 03:22

Kaitlyn Kiernan: Awesome. Thanks, Ritta. And, Jeremy, how about you?

03:22 - 04:15

Jeremy Ko: Yeah, I'm Jeremy Ko. I'm the Ketchum visiting scholar for FINRA Foundation. I've got a 20 plus year background in consumer and behavioral finance research. I was an academic at one point at a Big Ten University business school, and I proceeded then to work for the federal government as a senior economist at the Securities and Exchange Commission. And my last sojourn before coming here was in the fintech industry at an AI-based consumer lender and a robo advisory firm, and I'm really glad to have landed here in the Foundation and working with FINRA and working with great people and fantastic data.

And as far as the latchkey kid question is concerned, I'd give myself a three out of ten. So, we always had a grandparent at home taking care of business. So, I would always come home and she would be there, and I could go on about that for another ten minutes or so about how much easier my parents had it, because they had a grandparent helping them, and we have nobody. So more to say about that later.

04:15 - 04:17

Kaitlyn Kiernan: I bet you came home to the best snacks.

04:17 - 04:19

Jeremy Ko: Absolutely. And a very clean house.

04:19 - 04:30

Kaitlyn Kiernan: Yes, that does sound great for your parents and for you as well. And, Jeremy, can you tell us a little bit more about what it means to be a FINRA Foundation visiting scholar?

04:30 - 05:05

Jeremy Ko: So, it's a huge honor. The program has been in existence since January 2021, and this position has been inhabited by such academic luminaries as Carly Urban from the University of Montana, Angela Fontes from the Financial Health Network, and a few others-Nilton Porto, Michael Guillemette. And it's a fantastic opportunity to work with amazing people at FINRA and the foundation, including my three co-authors Gary, Ritta and Olivia Valdez, who was on this podcast. And the data sources are incredible and it's a great opportunity.

05:06 - 05:16

Kaitlyn Kiernan: Great. Thanks, Jeremy. And, Jeremy, can you tell us more about the background of this issue brief and what prompted it?

05:16 - 06:27

Jeremy Ko: As we all know, Gen X has become known as the Forgotten Generation, so it sits between the much larger boomers and millennials. Boomers have a lot of issues because there's this huge hump in the demographic distribution. They're proceeding into retirement and into old age, and there's all sorts of questions about what's going to happen to the boomers when our population demographics shift like this, and the fact that they're living such a long time and they're going to inhabit that right tail of distribution for so long. And then, of course, millennials and Gen Z have all sorts of issues with housing and educational debt that have become apparent in the past decade or so, and Gen X sits in the middle and no one gives them a lot of attention.

So, we thought we'd give them some love in this issue brief and put a spotlight as to what's happening with them, particularly with regard to lots of different shocks that they've endured during their working lives, all the way from 9/11, the dotcom bubble up to the COVID pandemic and this recent inflationary period. And in addition, they're also known as the 401(k)-experiment generation, in the sense that they're the first generation that needs to rely on their own assets, rather than defined income streams from pension plans to fund their retirement.

06:27 - 09:06

Ritta McLaughlin: To build on what Jeremy just shared and to add some additional context, older members of this generation are now in their late 50s and approaching retirement. And for many of them, this could be the end of their careers, or they are engaging in a career ending transition at this moment. And thinking about the youngest are in their early 40s and entering their peak earning years. So, what makes Gen X unique is that their average age makes them both young enough to be financially responsible for elderly parents, yet young enough to still be supporting, in some instances, young and minor children.

So, for many Gen Xers, this has created a bit of a unique set of challenges. When we think about Gen X, they are carrying most debt of any generation, and as Jeremy mentioned, we've had to deal with many defining events from the dotcom bubble, 9/11, the Great Recession of 2007 to 2010, and then, of course, most recently the COVID-19 pandemic. It feels like there's been many events in the world that have transpired against Gen X.

When we think about coming into 2025, the oldest of Gen X will be turning 60, and that brings the second wave of what's often been termed as the silver tsunami. And Gen X may have additional caretaking responsibilities for their Baby Boomer or Silent Generation parents, and that's going to affect their financial lives and the financial lives of their parents as well. And so, the confluence of all these events is a somewhat unique conundrum when we take a step back to think about their financial capability, household income, retirement savings, and their ongoing ability to grow wealth as a generation.

The research studying the financial challenges of Gen X, it's been relatively scarce, with few studies really examining how these unique circumstances Gen X are facing, particularly those associated with their retirement preparedness or their financial wellness. And as we've talked about previously, the Foundation, we've looked at Millennials, we've looked at Gen Z, but there was this research gap in talking about or thinking about Gen X. How did Gen X get its name? We've been called the Generation Not to be Defined, the MTV Generation, which I like to call us, the Latchkey Kid Generation, the Forgotten Generation. And if you think about what's an X, that symbolizes as the unknown variable. So given the extensive data that we have through the NFCS, we thought this brief could fill some of those research gaps. And so here we are.

09:06 - 09:34

Kaitlyn Kiernan: Well, I am happy to turn over the spotlight from the millennials. But one interesting fact about this report is that it takes a relational approach. So, it's not looking at Gen X in absolute terms, but relating it to where the other generations are-the Boomer Generation, Millennials, Gen Z. Why did you take this approach?

09:34 - 10:43

Gary Mottola: We're using data from the Foundation's National Financial Capability Study, and it's a really rich data source. The National Financial Capability Study dates back to 2009. Every three years since 2009, we've gone out and we've surveyed over 25,000 U.S. adults. So, we have a lot of data spanning…it's going to be 15 years soon. And all data sources have their limitations. The NFCS-that's what we call it, the NFCS-has its and one is that we know about the behaviors, and we know what people own and what they don't own and what debts they have. We don't know the actual value.

So, we don't know their wealth. We know they have savings accounts. We know they have a 401(k) or don't, but we don't know how much money they have in it. We know they may own a home, but we don't know how much that real estate is worth. So, we don't necessarily have the data to do a full-blown net worth analysis. But the data, given its large sample size, is perfect for allowing us to compare different generations and different demographic groups so we can say things like, Gen Xers are more likely to have a retirement account than Millennials. And we could say things like, Gen Xers are more financially anxious than Baby Boomers. So, we could do these comparisons, and that's why we took the relative approach.

10:44 - 11:16

Kaitlyn Kiernan: Great. And just to give people something to look forward to, the next National Financial Capability Study is coming out next year in 2025. So, I am sure Gary will be back on the podcast to talk about that. So, it'll be exciting to have a new wave of data. But Gary, first, Ritta did mention that the oldest Gen Xers are nearing 60. But can you tell us how big is this generation and what's the years that it covers?

11:16 - 11:27

Gary Mottola: It's small as far as generations go. We use Pew Research Center's definition of generations. We're defining Xers as people born between 1965 and 1980.

11:28 - 11:36

Jeremy Ko: So, at the time of this survey, which is 2021, that means that they were anywhere from 41 to 56 years old. We're getting older by the day.

11:37 - 11:48

Kaitlyn Kiernan: Great. Yes. That is one inevitable thing in life. We are all getting older by the day. But Gary, how is Gen X looking in regard to their overall financial health?

11:48 - 12:34

Gary Mottola: So, for the most part they're looking good. And again, this is given their age and essentially their life stage. Let's just take an example, mortgages, owning homes. We see this kind of linear trend. So, we see that about 60 percent of Gen Xers report owning their home and having a mortgage. Now that's significantly more than Gen Zers, significantly more than Millennials, but less than Boomers. So, we kind of see this linear trend across a lot of variables, where the Gen Xers are doing better than the younger generations, but worse than the older generations. And there are some really, really important exceptions to that that I think actually make the brief quite interesting. But overall, we're seeing that the Gen Xers are pretty much where they should be, given their age and their life stage.

12:35 - 12:39

Kaitlyn Kiernan: And is there anything that really stood out or surprised you?

12:40 - 13:06

Gary Mottola: There are a couple things. One of the things that really kind of surprised us is that-I just talked about this linear trend that we see that Millennials are doing better than Gen Z or Gen Xers doing better than Millennials, Boomers doing better than Gen X, etc.-but we don't see that when we ask the respondents in these generations, how do you feel about your finances? We don't see that, and we see a big disconnect and we'll need to unpack that. Student loan debt was something that caught us a little bit by surprise as well.

13:07 - 13:18

Kaitlyn Kiernan: Got it. And where is Gen X looking the strongest relative to other generations. And on the flip side, where are they looking kind of the weakest, comparatively?

13:18 - 13:47

Gary Mottola: Strongest, I mentioned home ownership. They're doing quite well from a home ownership standpoint. They're also doing pretty well from a retirement standpoint. Jeremy mentioned that, hey, this is the first full 401(k) generation. And we're seeing that they are, for the most part, contributing to either employer sponsored retirement accounts, IRAs, and they're less likely to pull out money, which is good in terms of hardship withdrawals and 401(k) loans. So, they're doing pretty well there. Where they're not doing as well? The student loan thing is giving a lot of Gen Xers some angst.

13:48 - 14:09

Kaitlyn Kiernan: That is interesting. I do want to dig into more about this retirement savings generation. It's the first generation that doesn't have the benefit of pensions and is now saving through these 401(k), 403(b) type accounts. Jeremy, is there anything interesting in the data as far as the retirement savings are concerned that you can spotlight?

14:10 - 15:05

Jeremy Ko: In terms of the proportion of people that have accounts and that are contributing to accounts, and those who have accounts who may be leaking money from them in terms of hardship withdrawals and loans, they seem to be doing pretty well. So, something like 60 percent of Gen X has a retirement account of some kind. And of those that own retirement accounts, about 82 percent are contributing to them. So that's pretty high relative to other generations. But then if you take into account the fact that there's such high proportion of ownership, they have the highest rate of contribution across all generations.

That doesn't account for things like retirement savings and non-retirement accounts, like people could be socking away money in a brokerage account or a bank account that's earmarked for retirement. It doesn't account for that perfectly, and they're not really leaking very much from it. So only about 10 or 9 percent are leaking in terms of hardship withdrawals and loans. And that's pretty good relative to other generations.

15:05 - 15:20

Kaitlyn Kiernan: That is good to hear. So, another thing I do want to dig into, Gary, you mentioned a couple times the student loan debt. Can you talk a little bit more about this debt strain and what's going on here with the student loan debt piece?

15:20 - 16:35

Gary Mottola: We see that about 25 percent of Gen Xers report having student loans out. So that caught us by surprise a bit given the age range that we were talking about. Now, it's important to note that of the Gen Xers who say, hey, yeah, I have a student loan, about 1 in 5 took that loan out for somebody else. We're a very generous generation. So, we're taking loans out for our kids, for our spouses, for our grandkids, potentially. But at the same time, we also asked the respondents in the survey, you worried about paying off your student loan?

And of all the generations, Gen Xers have the highest level of worry about being able to pay off the student loans. So, 56 percent of Gen Xers are worried that they won't be able to pay back their student loans. That's a strikingly high number. Now, it's a little higher than Gen Zers, who have student loans and Millennials who have student loans. But if you think about it, it's kind of interesting because we do know that college costs went up. So, Gen Zers and Millennials paid more for college. We do know that Gen Xers have higher income than a Gen Z using millennials. So, you put this all together and you're kind of saying, why are Gen Xers so worried about student loans? And why are so many still reporting that they have student loans?

16:36 - 17:05

Kaitlyn Kiernan: Often when we hear about student loans, we think about the student. But it seems like here it's actually the burden of the increase in college costs is in some cases, falling on the parents of those students. And it makes sense they might be more worried about paying it off, because if you're in your 50s, you don't have as many years of work ahead of you as a 22-year-old who is graduating with student loan debt and has their entire career ahead of them to pay that off. So that is an interesting little data point.

17:05 - 18:08

Ritta McLaughlin: And I think one of the other things you alluded to is this whole conversation about debt strain. There are essentially three indicators of debt strain. The first being whether the respondent had been contacted by a debt collection agency in the past year. The second indicator being the total number of costly credit card behaviors that they've engaged in over the past year. And that's out of four behaviors. And those behaviors are categorized as carrying a balance on their credit card, making only the minimum payment, paying late or over limit fees, or taking out a cash advance. So, respondents could have a value between 0 and 4 on this measurement in terms of their debt strain.

And also, the subjective rating as Gary alluded to of whether or not they believe they have too much debt. And so, thinking about student loans and those other two main indicators of debt strain led us to consider what many of the Gen Z are actually feeling about their overall financial capability.

18:09 - 19:43

Jeremy Ko: To take it back to the student loan issue, as far as why they may be worried. So, I'll get to the other sources of strain in a moment. First of all, about 77 percent of these Gen Xers who have student loan debt are paying back student loans for themselves. So, there are 41 to 56 at the time of this survey, and they're still paying back their own student loans. Eighteen percent, as Gary mentioned, are paying back loans for dependents, children and others. So, they're kind of in this very typical sandwich situation where they're paying back their own debt and they're responsible for other people's debt.

But in addition, I think one reason that they feel more strain by this debt than, let's say, younger generations, is that they have less access to things like deferments and relief and help for this kind of debt. So, if you're a younger generation, you may be getting help from your parents in paying back the debt. Gen X maybe doesn't have that luxury and in addition, doesn't have access to things like deferments, income-based repayment, debt relief for public service, various sources of debt relief and for that reason, maybe feel burdened by it. Now, as far as these other sources of strain go, Gen X isn't doing so hot in these areas as well.

In terms of, let's say, debt collection, they're the second worst in terms of having medical debt. They're the second worst. But then in other areas, they're doing okay, like late payments for mortgages. They're doing fine relative to younger generations. They're substantially lower in terms of poor credit card behaviors, like maintaining a balance or paying only your minimum payment, incurring penalty fees, etc. they're doing quite a bit better than younger generations, so it's kind of a mixed picture as far as their debt situation goes. For Gen X, they're doing poorly in some ways, and they're doing okay and they're doing well in others.

19:44 - 20:02

Kaitlyn Kiernan: That is interesting. I wonder what role interest rates might have in this. The interest rates on their student loan debt may have been harder to refinance, whereas mortgages fully a lot of these people were able to take advantage of refinancing at lower rates during the pandemic years. So that's also kind of an interesting element.

20:03 - 20:24

Jeremy Ko: One of the interesting things that we found that wasn't reported in the issue brief was the fact that Gen X had pretty low rates of debt free home ownership that was comparable to Gen Z and Millennials. So, they're still saddled by their mortgage and similar proportions to younger generations. And one of the reasons why we think that's true is because they possibly refinance when mortgage rates were low.

20:25 - 20:37

Kaitlyn Kiernan: So, I want to shift gears a little bit. We've been talking about Gen X as a whole. But Ritta, did you also look at the gender and racial or ethnic differences between the generation?

20:38 - 24:16

Ritta McLaughlin: We did. We did some different cuts and noted that some of the generational differences in respondents' financial behavior, in fact, align with what we would expect given their age. Generally, when we think about Gen X, they're likely to report healthy financial behaviors and are less likely to report unhealthy ones relative to Gen Z or to Millennials. And generally, Gen X has perceived their financial situation similar to Gen Z, but worse than the Baby Boomers. And so, when we examine the financial perceptions and the financial behaviors by gender, Gen Xers perceptions and behavior in fact differ. And that's to some degree no surprise.

Women reported having a somewhat more pessimistic outlook or view of their financial situation, although the differences aren't particularly large. Forty percent of women respondents reported to having too much debt, compared to only 37 percent of the male respondents. When we think about owning retirement accounts, 55 percent of women respondents reported to owning retirement accounts, compared to 64 percent of male respondents. When female Gen Xers reported feeling anxious more often about their finances compared to their male respondents, that was like 62 percent and 56 percent, respectively.

When we think about that, women had slightly lower financial well-being scores than men, and with an average financial well-being score of about 48 relative to 50.8 for men. So that's in terms of doing a gender analysis. But then when we actually drill down a bit more and look at the financial perceptions and financial behaviors based on race and ethnicity, the differences in several measures, in fact, are muted. But there are some notable examples that we point out.

Fewer than half of African American or Black respondents, approximately 47 percent, reported to owning retirement accounts, compared to 58 percent of Hispanic and Latinos, 61 percent of white and 76 percent of Asian American Pacific Islander respondents. Comparatively, 60 percent of adults reported to owning retirement accounts and the overall Gen X population. So, when we think about that, that's a relatively wide gap. But when we actually look at that, the number of respondents, particularly who are African American and Black with retirement accounts, we were in fact surprised to see that 84 percent reported actively contributing to their retirement accounts, and that was 2 percent higher than the overall Gen X population.

Also, interestingly, drilling down a bit more in looking across race and ethnicity, 87 percent of Asian American and Pacific Islander respondents with retirement accounts reported to actively contributing to them, and that was 5 percent higher than the overall Gen X population. So those were some really interesting findings in terms of looking at from a race and ethnicity standpoint. And for the most part, when we think about the debt perception, are similar across race and ethnicity groups in comparison to the overall Gen X population.

Thirty-six percent of Hispanic and Latino respondents, 42 percent of Black and African American respondents and 40 percent of white respondents reported to having too much debt. And this, of course, goes back to our analysis and thinking about debt strain. And those numbers drop, however, for Asian American Pacific Islander respondents to 23 percent. So, these were some of the analysis when we took a cut of looking at between race, ethnicity and gender.

24:17 - 24:35

Kaitlyn Kiernan: Thanks, Ritta. That is interesting. So, Gary, one of the things you mentioned that surprised you, of course, and we've mentioned it a couple times, is the disconnect between actual financial well-being and perception of financial well-being. Can you tell us a little bit more about what the data show here?

24:35 - 26:02

Gary Mottola: Sure. And at least to me, this was the most interesting finding. So, we talked about for the most part, Gen X is where they should be from a financial situation. Again, better than the younger generations, but a little worse than the boomers. A nice linear trend there. But that is not the case when we ask these people how they feel. So, for example, we assess their financial well-being using a scale that's widely used. It's five questions. And what we see is that basically Gen Xers, millennials and Gen Zers have average to below average financial well-being the way they rate their financial situation.

And then we see a big jump up for the Boomers. So, we're not seeing that linear pattern when we ask about how do you feel about your finances? We're seeing the younger generations, these generations younger than the Boomers, all kind of hanging together at a lower level, and then a big bump up for the Boomers. Just another quick example of financial anxiety. We have a question, does thinking about your finances essentially make you anxious. And we see that same thing. So instead of seeing that linear trend, we're seeing the flatline for the Gen Zers, the Millennials and Gen Xers. They're pretty anxious. They all have that same anxiety level.

And then it drops down very significantly for the Boomers. So, this disconnect between the nice linear trend we see for financial behaviors, we don't see it for attitudes about their finances. We see Boomers hanging with the Millennials and Gen Zers, even though they have more wealth and higher incomes.

26:03 - 26:22

Kaitlyn Kiernan: That is interesting. And of course, the data can't tell us why this disconnect exists, but being as familiar with the data as all of you are, and that you are all also Gen X, so members of this cohort, what do you think is driving this?

26:23 - 26:59

Gary Mottola: To me, it kind of comes down to the money. There was a study came out recently that showed that of all the investable assets in the United States, the Boomer generation owns 60 percent of those assets. That means the remaining 40 percent are split between the other generations. So, we do know in terms of investable wealth, Gen Xers own about 25 percent of the investable wealth way, way south of 60 percent. But bottom line is, it's the money. And I think that that helps the Boomers in a lot of ways and potentially makes it a little more difficult for the other generations.

27:00 - 27:29

Ritta McLaughlin: As we mentioned during the beginning of the podcast, for the most part of Gen Xers existence, they have been a series of world events that have produced anxiety. And, so, it would follow that thinking about overall, as Gary mentioned, of only having 25 percent of the wealth. In addition to thinking about the various interruptions for being able to acquire additional assets that Gen X, in fact, would have, that level of anxiety or the perception of that they're not doing so well.

27:30 - 27:34

Kaitlyn Kiernan: So maybe Gen X could also be the Xanax generation for that anxiety.

27:35 - 28:58

Jeremy Ko: To build on Ritta's point, there's really good academic research out there that suggests that life experiences affect people's investment behaviors. So, for example, people who experience the Great Depression in their lifetime tend to invest less in the stock market. So, there's good academic research to back that idea that if you experience a lot of bad stuff in your life, you might suffer from a little financial PTSD. The other thing that I wanted to add to Gary's points were that there's data from the Federal Reserve Board's Survey of Consumer Finances, which suggests that Gen X actually has lower net worth than equivalently aged households did in the past.

So, for example, in 2022, which I believe was the last wave of the SCF, they had lower median net worth than equivalently aged boomers back in 2007. So, their wealth level is lower. Now, they're contributing to their retirement accounts, so therefore they might catch up at some point, but as of right now, they're not doing as well as their parents or previous generations did in the past. And in addition, every single data source is limited, but there is another somewhat limited data source in Vanguard, which suggests that Gen X on average has about $60,000 in their retirement account.

Now, that's not an exactly representative sample. So, you're talking only about Vanguard clients, but it's indicative of the fact that people don't have enough money currently to afford a sound retirement.

28:59 - 29:10

Kaitlyn Kiernan: Yeah, $60,000. Not enough to retire on these days. At the end of the day, what are your overall thoughts on this study? Do you think there's any key takeaways for our listeners? Some of the firms or regulators or others who might have a vested interest in investor behavior and knowledge.

29:20 - 29:58

Gary Mottola: I think this study can really inform financial professionals' understanding of Gen X in terms of their behaviors and in terms of kind of their perceptions, and that can help from two perspectives. One for their clients, they could essentially use that information to maybe help inform the planning that they do for their clients. But also from a client acquisition standpoint, I think it can be helpful too. And maybe we're going a little beyond Gen-xers here, but understanding again the behaviors, the challenges and the views that say, Gen Zers have and Millennials have can certainly put financial professionals in a better position to essentially meet their needs.

29:59 - 31:08

Ritta McLaughlin: I think one of the key findings, too, is looking at risk tolerance, both relative and absolute, given the perceptions associated with financial anxiety that Jeremy talked about and that we mentioned in the study, that also translates into also our thinking about retirement behaviors. I mean, that remains important. Note that we found that for respondents that roughly 35 percent of Gen X doesn't have an investing account.

So, when we think about that 35 percent without any form of investment accounts, thinking about from financial professionals' standpoint that that's a whole group of individuals that are needing to think about retirement or to actively engage in making contributions to retirement. And there's still time. I would also say that there's a lot for us to unpack about the differing behaviors and perceptions about debt and retirement, and understanding what the sum of those drivers are, particularly when we start thinking about retirement linkage and debt and the relationships of financial anxiety.

There's still more for us to understand. And also, in that context of the intersectionality of individuals, as well as those various relationships and indicators.

31:09 - 31:47

Jeremy Ko: Building on the point that we were talking about earlier, the fact that Gen X is contributing to their retirement accounts robustly in terms of the proportion of people that are contributing, but that their account balances don't appear to be very high, I think that it would behoove 401(k) account record keepers, advisors and the government to create incentives for people to contribute more. So, we do have catch up savings rates, but perhaps those could go up. Perhaps default rates could go up because they are contributing and they are following the advice to contribute to their retirement accounts, but perhaps not saving enough. And to the extent that they could save more, I think that would be better off when they eventually retire.

31:48 - 32:23

Gary Mottola: As we look at our discussion as a whole, there's two stories going on here. Going back to that relative perspective, from a relative perspective, Gen X is where they should be roughly from a life stage perspective. But again, their attitudes maybe not, but a lot of what we're talking about is kind of more from an absolute perspective. Maybe they are not saving enough for a time. They have too much debt. So just understanding the difference between a relational and the more absolute approach, I think is important because across the generations, all generations, they have some challenges in terms of retirement savings, in terms of debt. So, I think it's important to keep that larger picture in mind.

32:25 - 32:30

Kaitlyn Kiernan: And final question is where would you like to go with this research moving forward?

32:31 - 33:00

Gary Mottola: We're currently collecting data for the latest wave of the National Financial Capability Study. Every wave we add some new questions and we pull out some as well. But yeah, we have one question in there that I really kind of want to look at in terms of Gen Xers. And that's basically we have a question that says, hey, are you financially supporting any adults in your life? We've always asked you financially dependent children. Now we had an added question, hey, are you supporting adults? And I think that's going to shed some light on some of the findings we've seen and potentially some of the challenges that Gen Xers face.

33:01 - 33:34

Kaitlyn Kiernan: Well, I am looking forward to seeing future research from the Foundation on Gen X and other topics. But that's it for today's episode. Ritta, Jeremy and Gary, thank you so much for joining me to shine a much-needed spotlight on Gen X for a change. Listeners, check out the show notes for a link to the full report, and if you have any questions or thoughts on today's episode, you can email us at [email protected]. Today's episode was produced by me, Kaitlyn Kiernan, and edited and engineered by John Williams. Until next time.

33:35 - 34:40

Outro Music

33:40 - 34:14

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