The oldest Gen Xers are turning 60 this year — hard to believe if you are one. They should be able to retire in a few years, but the financial reality bites for many of them.
Theresa Nickolich was about the same age as those students from Shermer High School when they served detention that fateful Saturday morning in the classic Gen X movie "The Breakfast Club."
“Like when we were growing up, we all ran around in the streets. We went pool hopping. We played the little Pong game,” she explains.
The proverbial good old days, when the American dream seemed real: that with enough hard work, success and a good life were totally within reach.
“Gen Xers, they're reporting higher levels of depressive symptoms, loneliness, poor physical health."Frank Infurna
And then reality breaks down the door.
“I've never been able to put any money away because I've had to live paycheck to paycheck," Nickolich said.
And that paycheck is in the low six figures, which sounds solid. But is in fact, a middle class wage according to the Pew Research Center.
Nickolich is the principal at a Phoenix elementary school, a single mom to twin daughters who started college in the fall, and like a lot of Americans, she was, until recently, in a lot of debt. She sold her central Phoenix condo to settle most of it.
“Believe it or not, I still owe $13,000 in student loans from my second master's,” Nickolich said.
She now rents a ranch-style home with her 88-year-old mom for just over $4,000 a month.
At 56, Nickolich is still a few years away from retirement. But she’s at a crossroads.
“It's time for me to look in a different direction. But you're tied to the state retirement system," she said.
The Arizona State Retirement System is a pension plan. And her only source of retirement savings outside of Social Security. This May, Nickolich could make an early exit, “so if I was to take early retirement, I would get $2,200 a month.”
The plan would be to invest those funds and pursue other opportunities to fluff her nest egg.
But when it comes to retiring the way most of us envision at 65, well, for Nickolich, the math is, “not mathing. Yeah,” she said.
A financially-strapped generation
Tyler Bond is the research director at the National Institute on Retirement Security in Washington, D.C.
He co-authored a report called The Forgotten Generation, which looked at retirement outlook for Gen Xers. What he found is: It kind of sucks. The typical GenX worker only has $10,000 in retirement savings.
“Even if we look at the household level, the median amount is $40,000," Bond said.
One reason is that when Gen Xers entered the workforce, pensions were mostly out and replaced with the 401(K). And in those days, you had to have some understanding of the financial markets. If you did, a 401(K) could work well because there were options and flexibility.
“But a lot of workers don't have the financial knowledge to think about making those choices," Bond said.
According to the study, slightly more than half of the roughly 64 million Gen Xers in America participate in an employer-sponsored plan.
One hit after another
Dennis Hoffman is professor of economics at the W.P. Carey School of Business at Arizona State University. He says Gen Xers have also had to weather more economic shocks than baby boomers.
“I've never been able to put any money away because I've had to live paycheck to paycheck.”Theresa Nickolich
“And I'm talking about the major dot com bubble of 2000, where some of them might have been acquiring wealth in their 401Ks and then it vanished overnight. Then they just found their legs and then we had the Great Recession of 2008 and 2009,” he explained.
And then the biggest shock of all, he said, the pandemic.
There’s also the elephant in the room: the aging baby boomers who may need their Gen X children to take care of them, or, he says, “we became a block to them because many of us chose not to retire early. So therefore, the ability for the Gen Xers to move up into some of those senior positions later in their careers has been blocked by us geezers," Hoffman said.
To quote that classic Gen X movie "Reality Bites," "don’t bogart that can, man."
Frank Infurna is a psychologist at ASU. He said he’s worried about middle-aged Americans.
“Gen Xers, they're reporting higher levels of depressive symptoms, loneliness, poor physical health. And exhibiting poor episodic memory or cognitive functioning.”
Infurna, a millennial, said his own research bums him out.
“My wife is not an academic, and every time I talk to her about some of the research, she's just like, ‘Can't you study something that's, like, positive and not so depressing?’ ... It's just that's what the data is showing us. And I think part of it is, yeah, the stress, I mean, being financially fragile and living paycheck to paycheck," Infurna said.
Like Nickolich. Still she is one of the luckier Gen Xers. Nickolich has family, including siblings, who won’t let her fall through the cracks. Though it might mean moving to Italy to live with her sister, who retired there because she couldn't afford to retire in the U.S.
