2 Habits Keeping Gen X Middle-Class Families From Growing Wealth
Written by
Cindy Lamothe
Edited by
Jenna Klaverweiden
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If you’re a Gen Xer, chances are you’ve checked off some traditional boxes of financial adulthood: steady job, homeownership (maybe), kids (definitely expensive) and a retirement account somewhere.
However, many Gen X middle-class families are finding themselves stuck. The wealth just isn’t growing the way they hoped. So what gives?
Turns out, some everyday habits — harmless as they seem — might be quietly holding them back. Here’s a look at what they might be.
Also see eight ways Gen X can build generational wealth.
The ‘Everyone Else First’ Mentality
According to Josh Katz, wealth strategist and founder of Josh Katz CPA, many people are financially strained by supporting both aging parents and their children’s education, often putting their own retirement savings last.
“I have seen clients delay retirement contributions for a decade to cover costs like assisted living or private college,” he said.
This can lead to a significant retirement gap later in life. Instead, Katz recommended rebalancing caregiving costs through smart tax strategies. “You can fund parental medical expenses using a health savings account (HSA), which offers triple tax advantages,” he said.
For college funding, he stated that 529 plans allow growth to compound state tax-free. Most importantly, he advised automating your retirement contributions before allocating funds for caregiving.
“Even small annual increases to your 401(k) can add substantial amounts over 20 years without straining your lifestyle,” he explained.
The Classic ‘Debt Treadmill’
According to a LendingTree study, Gen Xers in the 100 largest metros in the U.S. have the highest median debt across generations. That can be due to credit cards with high interest rates, lingering student loans and more. Additionally, LendingTree reported that the country’s collective credit card balance is $1.2 trillion as of the second quarter of 2025.
Katz said this creates a cycle where money that could be invested for retirement is instead used to service debt. “I recently worked with a client who was paying a significant amount each year just in interest,” he said.
To fix this, he suggested an “Avalanche Plus” strategy.
First, consolidate credit card debt onto a 0% APR balance transfer card for an interest-free period. Then, focus on paying down the debt with the highest interest rate while making minimum payments on others.
“If you are over 55, you can also explore using IRS Rule 72(t) to access retirement funds without penalty to pay off high-interest debt,” Katz said.
That said, you can still break free by automating catch-up mechanisms. Those over 50 can maximize 401(k) catch-up contributions and take advantage of new “super catch-up” options for those between 60 and 63.
“Building wealth requires prioritizing your financial future. Protect yourself first, or you risk becoming a financial burden later on,” Katz said.
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