Meet the ‘sandwich generation’: Gen Xers are burnt out and stressed about money

Eric Broussard-Bueno, a 47-year-old property manager in Lake Charles, Louisiana, knows financial anxiety all too well.

In 2007, Broussard-Bueno left his 9 to 5 government job to become a part-time caregiver for his mom, who was on a double lung transplant list. He said he walked away from a stable job with a “great salary and retirement benefits” because he believed that America’s economic strength was “infallible and exponentially growing.” By 2008, the economy was in a full-blown recession.

“I initially felt a tremendous amount of regret and extreme stress and anxiety after walking away from a fantastic and secure government job,” he said. “In 2009, I must have applied to and reached out to hundreds of positions. In some cases, I was informed that I was one of 3,000+ applicants. It was definitely, initially a huge shock to the system.”

Like Broussard-Bueno, so many Americans in their 40s and 50s are sandwiched between competing financial responsibilities — whether it’s caring for their aging parents, supporting their children, juggling work and household budgets, saving for retirement or all the above.

The majority of Gen X is feeling the weight of it all: 60 percent of Gen Xers (ages 43-58) say money has a negative impact on their mental health, more than any other generation, according to a May Bankrate survey. That’s significantly up from 46 percent the year prior.

“At different times in my life, I have fluctuated between feeling infinitely financially secure to feeling as if I were in absolute financial free-fall,” he said.

Key insights on Gen X’s personal finances

Why Gen X is experiencing heightened financial stress

Caregiving challenges, lagging retirement savings and elevated inflation account for much of why Gen X is stressed about their finances, experts say.

“These are folks who are in between boomers and millennials. And when it comes to financial anxiety, they have a lot of competing demands,” said Lindsay Bryan-Podvin, a Michigan-based financial therapist and coach. “Many of them have children and aging parents, so they’re sandwiched between caregiving for younger and older people.”

But to fully understand the root of Gen Xers’ financial anxiety, Bryan-Podvin says you have to look at the whole picture. If you consider the economics of Gen Xers, they came of age and were in the workforce for a handful of years when the dot-com bubble burst in the late 1990s. Less than a decade later, they were hit with the Great Recession and, more recently, the coronavirus recession.

“They got hit three times in 25 years, which caused some big financial setbacks,” she said.

For many Gen Xers, the bulk of their wealth relies on their home, their biggest asset. Though Gen Xers were hit particularly hard by the broad housing collapse a decade ago, Pew Research Center found they were the only generation to recover the wealth they lost during the Great Recession. Over the last decade, the median net worth of Gen X households has risen 115 percent as many have been fortunate enough to hold on to assets and continue working. Additionally, they are the only generation to have recovered the home equity they lost in the downturn. Analysis from the Pew Research Center shows the typical home equity level of Gen X homeowners has doubled since 2010.

Despite recovering their wealth since the Great Recession, Gen X is the least likely to feel financially secure compared to other generations, and less hopeful than younger generations about someday achieving that security, a Bankrate survey found. Bryan-Podvin attributes those feelings not only to financial factors at play but also psychological and cultural factors that make it difficult for Gen Xers to feel supported financially, particularly women.

“Personal finance books in the nineties were all about real estate, spending less than you earn and the importance of rugged individualism,” she said. “Women were also raised with a style of feminism that was popularized, and it was all about being tough and not complaining. Gen Xers have this unique set of stressors.”

Caring for children and aging parents

Midlife has its hurdles, and America’s “sandwich generation” is stuck in between being financially responsible for their parents and supporting their children. As a result, they face unique challenges while attempting to build and maintain their wealth.

The average Gen X household earns significantly more — approximately $117,577 before taxes — than other generations. Having more time in the workforce than younger generations means they’re hitting their peak earnings, but those peak-earning years are also when Gen Xers spend the most money. With larger households, Gen X spends the most on consumer goods and services and has significantly more debt than other generations.

A Bankrate survey in April found that Gen X parents, in particular, say they have sacrificed retirement savings (50 percent), emergency savings (58 percent), paying down their debt (55 percent) or reaching some other financial milestone (60 percent) to help their adult children financially.

“You have this generation that is dealing with saving for their retirement, but also trying to care for their aging parent and save for their kids’ college,” said Megan McCoy, an assistant professor in the department of personal financial planning at Kansas State University. “And it’s too much to ask for one person.”

Behind on saving for retirement

Age seems strongly correlated with whether Americans feel behind on retirement savings, and Gen X report being significantly behind. Forty-five percent of working Gen Xers say they feel significantly behind where they should be with their retirement savings, according to an October Bankrate survey. More than half (51 percent) say inflation has held them back from saving more for retirement.

Over the last two years, Americans experienced inflation unseen in decades and saw the price of everyday goods and services skyrocket. And while prices are no longer rising at the fastest pace in four decades, Americans could still be paying the price in the long run as it has weighed on their ability to save, invest and pay down debt.

Among Gen Xers who say money has a negative impact on their mental health, sixty-eight percent say inflation has caused feelings of stress, anxiety, worrisome thoughts, loss of sleep and depression. Forty-eight percent say being unprepared for retirement is a significant trigger of financial stress, and 60 percent say not having enough emergency savings is, too.

“We’ve made some great advances in healthcare, but it also means you’re much more likely planning for a 20-, 30- or 35-year retirement,” Bryan-Podvin said. “Gen Xers’ parents, the baby boomers, had pensions at work and didn’t necessarily financially educate them on the importance of putting away money for retirement on their own.”

Uncomfortable with their level of emergency savings

Emergency savings typically rise with age, but more than half (62 percent) of Gen Xers are uncomfortable with their level of emergency savings, according to Bankrate’s yearly emergency savings report. Twenty-two percent of Gen Xers don’t have any emergency savings, and 35 percent of Gen Xers have some savings but less than three months’ worth of expenses.

Experts say three months’ worth of expenses is a good step in the right direction, but savers should aim for six months. Having a well-stocked emergency fund that covers at least six months’ worth of expenses can help cushion the blow of an unexpected expense from taking care of a loved one or a pricey home repair.

Savers should set aside their emergency savings in a liquid bank account they can easily pull from, such as a high-yield savings account. To make saving more seamless, Bankrate Chief Financial Analyst Greg McBride recommends automating your contributions to your savings account as much as possible. Automatic contributions on a consistent basis will lead to “a higher level of emergency savings and a greater comfort level with your emergency savings,” he says.

3 money management tips for Gen X

Gen Xers require a great deal of financial strength and resolve to handle being “sandwiched” between the two largest generations. Here’s what financial experts say people in their 40s and 50s should focus on:

1. Turbocharge your retirement savings: Experts at Fidelity Investments suggest having roughly three times your annual salary saved in a retirement account by 40. By age 50, the recommendation jumps to six times your salary. With the extinction of pensions and longer life expectancy, it’s never been more critical to save for your future. If you have access to a workplace retirement account like a 401(k) and have reached age 50, know you can play catch-up. For 2023, the 401(k) limit for employee salary deferrals is $22,500, and workers aged 50 and older can add up to $7,500 more annually as a catch-up contribution in 2023 — up from $6,500 in 2022. Keep in mind that employer matches don’t count toward this limit. IRA savers 50 and older can invest $7,500 in 2023, representing $1,000 in additional catch-up contributions.
2. Seek professional help: If your financial situation feels too overwhelming or you’re constantly stressed about money, consider turning to a financial therapist for support. Financial therapists can break down financial stressors that may affect you, help unpack financial trauma and provide other therapeutic guidance. If therapy fees aren’t in your budget, consider enrolling in credit counseling through a non-profit organization. Credit counseling programs offer free workshops, education and advice to help manage money and debt.
3. Talk to your family about money: Navigating conversations about money with your loved ones can be awkward and uncomfortable, but it can benefit all parties. Consider leaning on your parents as a resource during economic uncertainty. They’ve experienced many economic cycles and can offer some perspective that could be helpful to your current financial situation. It’s also important to discuss estate planning with your parents, from understanding your parents’ will or living trust to figuring out whether they have named a power of attorney. When discussing money with your children, sharing positive money stories is an easy strategy to help your children normalize thinking about and discussing finances. The more you openly discuss money with your family, the easier it’ll get.

• Methodology

  Bankrate commissioned YouGov Plc to conduct the survey on money and mental health. All figures, unless otherwise stated, are from YouGov Plc. Total sample size was 2,365 U.S. adults, among whom 1,232 say concerns about money have a negative impact on their mental health. Fieldwork was undertaken on April 12-14, 2023. The survey was carried out online and meets rigorous quality standards. It employed a non-probability-based sample using both quotas upfront during collection and then a weighting scheme on the back end designed and proven to provide nationally representative results.
  
  Bankrate commissioned YouGov Plc to conduct the survey on Americans’ retirement savings. Interviews were conducted from September 21-23, 2022, among a sample of 2,312 American adults. Data are weighted and are intended to be representative of all U.S. adults, and therefore are subject to statistical errors typically associated with sample-based information.
  
  Bankrate.com commissioned YouGov Plc to conduct the survey on financial independence. All figures, unless otherwise stated, are from YouGov Plc. Total sample size was 2,346 U.S. adults, among whom 773 are parents with children age 18 or older. Fieldwork was undertaken on March 14-16, 2023. The survey was carried out online and meets rigorous quality standards. It employed a nonprobability-based sample using both quotas upfront during collection and then a weighting scheme on the back end designed and proven to provide nationally representative results.
  
  The emergency savings report (that was conducted in May 2023) was conducted by SSRS on its Opinion Panel Omnibus platform. The SSRS Opinion Panel Omnibus is a national, twice-per-month, probability-based survey. Data collection was conducted from May 19 – May 22, 2023 among a sample of 1025 respondents. The survey was conducted via web (n=995) and telephone (n=30) and administered in English (n=1000) and Spanish (n=25). The margin of error for total respondents is +/- 3.4 percentage points at the 95% confidence level. All SSRS Opinion Panel Omnibus data are weighted to represent the target population of U.S. adults ages 18 or older.