Generation X refers to Americans who are currently between the ages of 44 and 59 in 2024. Some members of this generation are now in their prime earning years, while others are thinking about retirement, which is not too far away. This generation is in various life phases and has different financial situations. A recent report discovered that Generation X has the biggest difference in wealth compared to any other generation.
According to a recent survey by GOBankingRates, members of Generation X have a wide range of savings account balances. They are equally likely to have between $101 and $500 as they are to have over $10,000.
Generation X’s Savings Account Balances
A majority of Gen X individuals have less than $100 in their savings accounts. Specifically, 36% of Gen X individuals reported having a balance of $100 or less. According to the survey, 36% of all Americans say they have $100 or less in savings. This is similar to the overall results of the survey.
Here is a closer look at the percentage of people from the Gen X generation who have different amounts of money in their savings accounts:
- $100 or less: 36%
- $101 to $500: 15%
- $501 to $1,000: 9%
- $1,001 to $2,000: 10%
- $2,001 to $5,000: 7%
- $5,001 to $10,000: 7%
- $10,000 or more: 15%
What Gen X Can Do To Build Savings?
More than half of Generation X (51%) has $500 or less in their savings accounts. One reason why this generation might be having financial difficulties is because they often have to financially support both their children and their aging parents. Pam Krueger, the person who started Wealthramp, said that it’s important for people in this generation to prioritize their own finances now.
Also Read: NYC Income Tax Guide for 2024
Gen Xers’ Savings Need Work
According to Northwestern Mutual, the average amount of money saved for retirement by members of Generation X is $108,600. However, this poses a problem because a significant number of individuals from the Generation X cohort are already in their 50s.
Imagine you are currently 55 years old and you have $108,600 saved. Your goal is to retire when you turn 65. If you save $300 every month for the next 10 years and your investments make an average annual return of 8% (which might be a high estimate because it usually requires investing in stocks, which is less suitable as retirement approaches), you will have approximately $286,000 in total savings.
That’s not a large amount of money considering it may need to last for 20 years or more during retirement. If you were to use the 4% rule with a balance of that amount, you would have an annual retirement income of $11,440 from your savings. This amount may change over time due to adjustments for inflation. If Social Security benefits are reduced in the future and the average recipient currently receives only $23,000 per year, it is advisable to save more money for your retirement.
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