Recession Means More Work for Gen-Xers
NEW YORK (MainStreet)--Not just did Generation X have to live through new Coke and mullets, but those in the demographic also may have to work longer than previous generations to make up for losses from last decade's recession.
According to new analysis by the nonprofit Pew Charitable Trust, members of Generation X -- those born between 1966 and 1975 -- suffered losses amounting to 45% of their median net worth between 2007 and 2010, significantly more than those from the Baby Boomer generations.
"Late Boomers and Generation Xers lost significant amounts of wealth during the Great Recession, eroding their already low levels of assets," said Erin Currier, director of Pew's economic mobility project.
The Pew study looked at the savings behavior of the five most recent generations -- Depression Babies, War Babies, Early Boomers, Late Boomers and Gen-Xers -- before the 2007 recession and how wealth losses during the recession affected each group's retirement. It found Early Boomers -- born between 1946 and 1955 -- may be the last generation on track to retire with enough savings to be financially secure through their golden years. Early Boomers had acquired enough savings and wealth to replace 70 to 80% of their pre-retirement income, while Gen-Xers likely will have enough assets to replace only about half of their pre-retirement income.
Both early and late boomers -- those between 1956 and 1965 -- suffered significant losses due to the recession during key earning years of their lives, losing 25 and 28% of their median net worth, respectively. Gen-Xers, however, lost nearly half of their wealth totals -- an average of about $33,000 -- between 2007 and 2010 and reducing their already low levels of retirement savings.
"As policymakers focus on Americans' retirement security, particular consideration should be paid to how younger generations of workers can make up for these losses and prepare for the future," Currier said.
Due to the downturn, neither Gen-Xers nor late boomers are on track to be better off financially than the generations preceding them. In their 30s and 40s, Gen Xers lag behind Late Boomers by about $6,000, and in their 40s and 50s, late boomers lag behind Early Boomers by more than $5,000.