Gen X Has the Largest Wealth Gap — What This Means for Generational Wealth
Written by
Cynthia Measom
Edited by
Gary Dudak
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Things aren’t looking good for Gen X, which is said to have the largest wealth gap of any generation.
Not having a pension plan, suffering multiple economic crises, and not seeing wage increases that keep up with inflation are all reasons that those ages 44-59 are struggling when it comes to building a nest egg.
According to Schroders’ 2023 US Retirement Survey, Gen Xers need at least $1.1 million to retire, but many of them have not saved anywhere near that amount. The National Institute on Retirement Security found that a typical Gen X household has just $40,000 earmarked for retirement.
What Does the Wealth Gap Mean for Generational Wealth?
Because many Gen Xers may be retiring in the next decade or so, that means they will struggle to make ends meet. They won’t be able to depend on Social Security to cover the gap, which means they’ll be looking for younger family members to help provide for their support. In other words, generational wealth will be nonexistent.
That doesn’t mean that all is lost, however. If you’re on the lower end of the wealth gap and you want to know how to build generational wealth, you still have time to turn things around.
How To Build Generational Wealth
“Building generational wealth requires strategic planning and disciplined financial habits,” said Harvard University-trained economist Keisha Blair, international bestselling author of the Holistic Wealth book series. “For Gen Xers … there are key steps they can take immediately to pave the way for lasting financial prosperity. Gen Xers should also take a holistic approach to building wealth, as many are also in the sandwich generation with care responsibilities for both teens and aging parents.”
Invest Wisely
Blair said that Gen Xers should prioritize smart investment strategies to grow their wealth over time. To mitigate risks, she said it’s important to diversify investments across different asset classes, including stocks, bonds and real estate. She also recommended regularly reviewing and adjusting your investment portfolio based on your financial goals and market conditions.
Prioritize Retirement Planning
Blair said it’s essential to prioritize retirement planning. She suggested maximizing contributions to retirement accounts like 401(k)s and IRAs. She also said to consider consulting a financial advisor to develop a tailored retirement plan that aligns with lifestyle goals.
“It’s crucial to start early and consistently contribute to ensure a comfortable retirement,” Blair said.
Acquire Real Estate
Blair said that owning real estate is a powerful wealth-building strategy.
“Gen Xers should explore opportunities to invest in property, whether it’s a primary residence, rental property, or real estate investment trusts (REITs),” she said. “Real estate has the potential for appreciation over time, providing a reliable source of wealth.”
Manage Your Debt
Another way to close the wealth gap and build generational wealth is to tackle your debt. “High-interest debts, such as credit cards, can erode wealth over time,” Blair said.
She recommended making it a top priority to pay off high-interest debts while responsibly managing mortgage and other lower-interest debts. “This will free up resources for more strategic wealth-building endeavors,” she said.
Invest in Education and Skills Development
Don’t stop learning. Blair is an advocate of investing in continuous education and skill development to allow you to stay competitive in the evolving job market.
“Acquiring new skills enhances career opportunities and income potential,” Blair said. “This, in turn, positively impacts your ability to generate wealth. Be adaptable to industry changes and embrace lifelong learning. Lifelong learning is a critical part of Holistic Wealth.”
The Takeaway
Blair said that Gen Xers have a pivotal role when it comes to building generational wealth. She said the key lies in strategic financial planning and disciplined execution.
“By investing wisely, prioritizing retirement planning, exploring real estate opportunities, managing debt effectively and continuously developing skills, Gen Xers can set the stage for a prosperous financial future that extends to the next generation,” Blair said. “Having a Holistic Wealth portfolio with all the critical elements included means that Gen Xers will have a solid roadmap they can execute.”
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