For decades, Baby Boomers have held the reigns of the U.S. economy. The generation has remained a dominating financial force with an estimated $30 trillion in wealth. However, as this generation ages, a massive wealth transfer is anticipated – a phenomenon known as the “Great Wealth Transfer.”

Financial experts speculate this enormous wealth transition will find its way into the hands of Millennials and Generation Z. But where does this leave Generation X?

Generation X, or those born between 1965 and 1980, is often overlooked in conversations about the great wealth transfer. Traditionally sandwiched between the Baby Boomers‘ economic might and the Millennials’ sheer population size, Gen Xers are frequently in the financial planning shadows. This generation is double responsible for supporting aging parents (Baby Boomers) and caring for their children (Millennials and Gen Z).

Furthermore, Generation X was hit hardest by the Great Recession of 2008, leaving many with depleted savings, job losses, and stagnating wages. Recovering from this setback while managing the financial needs of their families presents a substantial challenge. Will they miss out on this unprecedented transfer of wealth?

The rising lifespan is another factor that complicates wealth transfer. The current life expectancy for the U.S. in 2023 is 79.11 years, a 0.08% increase from 2022. As Baby Boomers live longer, they consume their wealth, often depleting what might have been passed onto the next generation. 

While this reflects positive developments in healthcare and quality of life, many Gen Xers will inherit later in life, often when they are already in their retirement years. This late wealth transfer may not provide the financial cushion during the income-earning years when it could have the most impact.

Despite the challenges faced by Generation X, there is still room for hope. By embracing the power of effective financial planning, this generation can proactively prepare for future uncertainties and optimize the wealth transfer process. Starting retirement planning early is key. Gen Xers should assess their retirement needs and build their savings as soon as possible. This involves maximizing contributions to retirement accounts such as 401(k)s and IRAs while diversifying investment portfolios.

As of 2023, the maximum contributions for 401(k) accounts have increased to $22,500, or $30,000 for individuals aged 50 or older. These amounts represent a modest rise from the 2022 limits of $20,500 and $27,000, respectively, for those in the same age bracket.

To effectively navigate the financial landscape, Generation X individuals should prioritize estate planning, especially if they have aging parents. It is crucial to understand their parent’s financial situation, including assets, liabilities, and preferences for inheritance distribution.

With increased longevity becoming a reality, Gen Xers must also develop a plan for their parent’s long-term care. By doing so, they can safeguard the inherited wealth and secure the financial future of their families. This proactive approach helps prevent the depletion of resources and ensures that their loved ones are well taken care of in the long run.

It’s essential to consider insurance coverage and emergency savings to establish a safety net for financial stability. Creating an emergency fund and obtaining sufficient insurance allows you to manage unforeseen expenses or income disruptions without depleting long-term savings or resorting to high-interest debt.

Furthermore, Gen Xers must prioritize financial education for themselves and their children. By fostering a culture of saving, investing, and wealth preservation, they can ensure that inherited wealth continues to flourish and grow for future generations. A financial advisor can assist you with the following.

At CKS Summit Group, we recognize the distinct financial obstacles that Generation X encounters. Our dedicated team of financial advisors is fully committed to assisting our clients in navigating their financial journey with expertise and care. We offer comprehensive services, including retirement planning, estate planning, and much more.

The great wealth transfer is a significant event that Gen Xers need to navigate effectively. Our advisors provide guidance and strategies to help them participate in this transfer smoothly, allowing them to pass on their wealth to future generations while also ensuring financial security for themselves. Our team is dedicated to empowering Gen X clients with the knowledge and tools they need to make informed financial decisions.

We provide educational resources, workshops, and personalized guidance to help clients enhance their financial literacy and confidently manage their wealth. Through careful planning, informed decisions, and our unwavering commitment to their success, we help them pave the way for a secure financial future for themselves and future generations.

Generation X is set to receive a smaller share of the $30 trillion wealth. However, being the first to benefit and with strategic financial planning, they can navigate their way to financial stability and prosperity. This monumental transfer of wealth represents not just challenges but also significant opportunities for Generation X.

With financial advice and planning, they won’t just witness the Great Wealth Transfer; they can actively participate in it. Contact CKS Summit Group today to begin your financial journey.