This is the basic finding the Pew Charitable Trusts’ report on the financial situation of “Generation X” (“Gen X”), which it defines as all Americans born between 1965 and 1980. Generational designations are really kind of arbitrary—why does Gen X only get 15 years?—and mobility studies often ask their readers to accept silly assumptions. One example is expressing surprise that people who are born to high-income households don’t have the same probability of falling to the bottom of the income ladder as they grow up as people born at the bottom have of making it to the top. However, these studies can illuminate the kinds of debts people have and whether and why they might need to file bankruptcy in the future.
(It’s also a big relief to have a break from then incessant analyses of the Millenials, Gen X’s successors.)
As for specifics, the Pew study alarmedly reports that Gen X is “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.” Gen X families (not individuals or households, which are different units to measure) tend to earn more than their parents did at the same age, but only a third have more wealth.
In fact, the “typical” (probably the median) Gen X family has $5,000 less wealth than their parents did at the same age and $7,000 of debt versus only $1,000. Apparently, wealth levels are polarized, so Gen X families with more net assets than their parents’ generation also have three times as much as people their own age. Naturally, one of the biggest causes of Gen X’s lack of wealth is the collapse of the real estate bubble in the last decade.
As you probably saw coming, student loan debt is a major factor holding back college-educated Gen Xers’ wealth accumulation. Four in ten have student loan debt, and the median amount owed is $25,000, which is surprising because that’s typically the average amount of debt college graduates have today. Fifty percent of them also had credit card debt. The report warns that highly indebted Gen Xers won’t be able to save to send their own children to college, which sounds a little strange given that there are probably more useful things for them to save for, like retirement.
The full text of the Pew Charitable Trusts’ report can be found here.
Frankly, this is pretty bad news for Gen X, particularly the fact that wealth levels are so polarized. Its high indebtedness could lead to problems in the future. Irrespective of which generation you belong to, if you have significant debt problems, be they student loans, credit cards, medical debt, or mortgage debt, talking to a New York bankruptcy lawyer can help you decide whether bankruptcy is a good option for you.
For answers to more questions about bankruptcy, the automatic stay, effective strategies for dealing with foreclosure, and protecting your assets in bankruptcy please feel free to contact experienced Brooklyn bankruptcy attorney Bruce Weiner for a free initial consultation.
