Gen Xers are poorer than their parents

Written By limadu on Senin, 22 September 2014 | 05.32

generation x wealth income 2

NEW YORK (CNNMoney)

The typical Gen Xer has only $29,100 in wealth, compared to the $65,200 that their parents had socked away at the same age, according to a new report from the Pew Economic Mobility Project. Wealth includes savings, retirement funds, homes and other investments.

"They are on track to be the first in recent history to fall behind previous generations in terms of wealth accumulation, a key indicator of economic security and particularly retirement preparedness," Diana Elliott, research manager, financial security and mobility, at Pew, said of this generation, born between 1965 and 1980. Researchers compared Gen Xers with their own parents.

Only 36% of Gen Xers have exceeded their parents' net worth. That's especially telling since three-quarters of Gen Xers are taking home bigger paychecks than their parents did.

Why are Gen Xers so much poorer? Debt, particularly student loans.

The Molly Ringwald/Kurt Cobain generation have nearly six times the debt levels of their parents, primarily from college. And this debt hampered Gen X's ability to accumulate wealth even two decades after they graduated.

debt generation x

That's not to say college isn't worth it. Degree-holding Gen Xers make $25,000 a year more than their non-educated peers. They also have $26,000 more in home equity and $9,000 more in other wealth, Pew found.

Related: Enough with Millennials. Here's what Gen X thinks

When it comes to mobility, Gen Xers are also a lot less likely to move up the economic ladder ... or fall from their perch. Nearly three-quarters of those raised at the bottom of the income ladder never reach the middle, while nearly 70% of those raised at the top never fall to the middle. That's linked to sharp demographic differences between the ends of income spectrum: Those at the bottom are often single and not college-educated, while those at the top are married with a degree.

Interactive: Are you really middle class?

Gen Xers are also less prepared for retirement, according to an earlier Pew study. They lost 45% of their savings between 2007 and 2010, and only have enough to replace about half of their pre-retirement income.

This lack of savings and wealth have the Pew researchers concerned.

"The findings show that Gen X has bigger hurdles to overcome than previous generations did to achieve financial security," Elliott said.

First Published: September 22, 2014: 7:05 AM ET


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