Generation X: understanding a new generation of clients

The retirement industry has long focused on the financial needs of baby boomers, and for good reason: over 11,000 Americans will turn 65 each day through 2027¹.  But if you’re only focused on clients in this age group, you’re missing out on the market segment that could well be your next big business opportunity.

Generation X (Gen X), the next generation in line for retirement, represents Americans born between the mid 1960s and the late 1970s. As retirement gets closer for the oldest Gen Xers who turned 59 in 2024, they may be thinking more about generating income after they stop working. At the same time, a projected $72.6 trillion is expected to change hands by 2045². Some Gen Xers may receive substantial inheritances from this transition, and they may want professional guidance managing it. Highlighting your wealth management and retirement planning expertise could help you attract Gen X clients and build long-term relationships that may help sustain your business for years to come. Understanding Gen X’s characteristics, their history and financial needs could help you connect with them.

Swimming against the current

Higher-paying jobs Gen Xers expected to land after graduating from college may not have materialized. In addition to a harsh job market after college, Gen X has carried high levels of student loan debt, faced high housing costs and experienced periods of unemployment. The “Great Recession” struck many Gen Xers mid-career. While lasting only 18 months, the economic effects took a toll on many people. One of the long-term effects — only 40% of Gen X workers feel confident they’ll have enough money saved for a comfortable retirement³, leaving 60% unsure.

Further complicating retirement for Gen X:

• Longer lifespans mean retirement savings will have to last longer
• Inflation’s impact on spending in retirement
• Financial support for three generations — parents, children and themselves — the sandwich generation impacting many Gen Xers 

Helping shape retirement

Downsizing, mergers and layoffs, along with Social Security uncertainty and the decline of traditional company pensions, have been the generation’s adulthood reality. This marks a difference from their parents, many of whom remained with one company throughout their careers, potentially feeling more financially secure retiring with a pension and more predictable Social Security benefits. 

Gen Xers contended with limited information, education, and investment options for retirement savings as they started their careers as many pension plans were being replaced by IRAs and 401(k) plans that put the onus on individuals to save. Your guidance can help Gen X clients reevaluate their spending, saving and retirement income plan that could allow them to retire with confidence.

Factors out of their control have left some Gen Xers with financial catching up to do and may not know where to begin. On average, Gen Xers expect it will take over $1,069,746 in savings to maintain their lifestyle in retirement, but they only expect to have $602,944 saved when they stop working. That’s a savings gap of  $466,802⁴ many will need help to close. 

Knowing who Gen X is and what drives their retirement concerns could give you a competitive advantage. Showing Gen Xers how working with a financial professional can help deepen their financial knowledge and reach their retirement goals may give you the opportunity to gain their confidence and build loyal relationships with a new base of clients.

Today’s client may lead to tomorrow’s annuity opportunity

Like baby boomer clients, Gen Xers are also concerned about outliving their retirement savings. Even though they may be behind when it comes to saving for retirement, it’s on their minds. The good news is there’s still time for Gen Xers to find financial education and options to help them catch up.

By providing personalized retirement planning some Gen Xers may be missing or lack confidence in,  you can help them overcome potential savings shortfalls . Here are a few actionable strategies to help Gen X clients attain their long-term financial goals.

• Learn about their values, lifestyle and risk tolerance to help you develop retirement plans personalized to their needs.
• Discuss traditional and creative strategies to help address the savings gap, such as employer match programs, catch-up contributions for clients 50+, tax advantaged savings options and others.
• Introduce solutions that can help provide guaranteed income and support peace of mind for a longer retirement.
• Share strategies that can help Gen Xers reduce debt and maximize retirement plan contributions.
• Talk about diversification strategies that can help clients achieve their retirement goals.

You may wonder if Gen Xers are less likely than older clients to have enough money to fund an annuity, making it too soon to talk about one. Keeping up with their life events can help you identify key opportunities to provide guidance. For example, Gen Xers that have changed jobs most likely have a 401(k) plan to rollover, which can be a perfect way to fund an annuity. Inheritances are another source. Both are good entry points for a conversation about annuities.

Many in Gen X have faced financial challenges, yet they still have some years until retirement. With the variety of annuities in the marketplace, there are solutions that could help clients grow their retirement savings, manage market volatility and generate income in retirement. Talking with Gen Xers about ways annuities are attractive options to help meet their growth, protection and income needs could help address any stress they feel about retirement.

Insights on Athene Connect. Tips, tools and resources to help grow your business by helping clients retire with confidence.

¹ U.S. Census Bureau
² Cerulli (2022). The Cerulli Report — Cerulli anticipates $84 trillion in wealth transfers through 2025.
³ The Bankrate 2023 survey on Generation X confidence in retirement funds.
⁴ Schroders study on the generation’s savings shortfalls.