ALL IN ALL IS ALL WE ARE: Gen X Experiences Middle Age

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Rebecca Brooks, founder of shopper intelligence firm Alter Agents, sees a similar situation. "[Gen X] is the most economically squeezed generation in terms of money that they have to put out and money that they’re bringing in," Brooks says. "Gen X hasn't seen the income growth in proportion to inflation the way that the previous generations have seen, so their dollar is worth less than it was in their parents' time. They also are the generation that’s more squeezed between Boomers who are sticking around for a lot longer, and then also having children at home. There are a lot of Gen X people out there that are actually supporting three generations on that paycheck."

Miller also observes a threefold responsibility for Gen Xers. "At the very time that people should be putting away money for their own retirement, they are now being pressured, in some cases, to educate their children, and to care for their parents at the same time," Miller says. "You could have people who are faced with all three things, where they’re trying to build their own long-term security, they’re trying to pay for a good education for their children, and they’re trying to help between one and four parents."

Nevertheless, Miller notes that it is important to remember that the financial concerns of Gen Xers can differ, due to socioeconomic status. "It's a question of disparity: At the top of the range, those families that have been most prosperous—which usually means better educated—may have parents who can not only take care of themselves but help you with college expenses," Miller says. "But the least prosperous [of Gen Xers] will probably incur both children's college expenses and parents’ end-of-life expenses. At the same time, it’s increasingly clear that social security provides only a fraction of what you need to live very well in retirement, and so people are increasingly trying to build up their personal retirement accounts."

Brooks cites the decrease in pension plans and increase in 401(k) plans as part of the reason for Gen X's tight financial situation as they approach middle age. Xers, she states, served as "the guinea pig for the 401(k) experiment," which she claims "isn't as profitable as we'd hoped it would be."

"The natural human failing of saving for retirement when it's in your hands, versus in the company's hands, is really evident with the 401(k) problem, and then also the fact that the 401(k) is really great for businesses and the stock market but it’s really not that good for the individual in terms of long-term savings," Brooks says.

In an email to CRM magazine, Brooks wrote, "401(k)s only work when two things happen: (1) companies absorb most of the fees and costs (very rare) and (2) employees diligently contribute large amounts (also rare). Even under those two exceptional circumstances, 401(k)s are still at the whim of the market, underperform over the long term compared to other savings plans, and tie up consumer money in a way that is counterproductive to investment strategies. This is exacerbated by our new culture of changing jobs every few years. If you aren't even eligible for the 401(k) for the first year and maybe have a vetting time period after that, the lure of sticking around for a 401(k) becomes negligible."

Given their financial situation, it follows that Gen Xers are going to be wary when it comes to parting with their money. "Gen X really places an emphasis on price and value, and value specifically because their dollar has to go further than the other generations' [dollars]," Brooks says. For this reason, businesses need to provide Gen Xers with high-quality yet affordable products that, perhaps above all, fulfill an important function.

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