When presenting research on the generations, I'm often asked why so much attention is given to Gen Y and so little to Gen X. LIMRA and other organizations certainly study Gen X (ages 33-50) but it's fair to say they receive less attention than Gen Y (ages 25-32) and Baby Boomers (Ages 51-65).
Some argue Gen X gets less attention because it's the smallest of the three generations. But when you consider where Gen X is in their lives, their needs represent a huge opportunity for the financial services industry right now.
Gen Y is larger in total, but there are far more Gen Xers (67 million) in the family formation ages than there are Gen Yers (35 million). Right now Gen Xers are moving through the various life stages that all generations do. Among U.S. households with children under age 18, almost 60% are headed by a member of Gen X, while about 20% are headed by a member of Gen Y. This makes Gen X a much larger potential market than Gen Y for life insurance, accumulation products, and financial planning.
LIMRA data indicate that while Gen Xers are more likely than Gen Yers to own life insurance, insured Gen Xers are the most likely to indicate that they do not have enough life insurance coverage. Further, among those that do not have any life insurance coverage, Gen Xers are the most likely to say they need to be protected. Gen X presents the greatest demand for life insurance for “traditional” reasons, such as marriage, buying a home and having children.
Gen Xers will have to save for their children’s college education, as well as for their own retirement. In addition, their parents are getting older, so Gen Xers are faced with the very real possibility that they will have to support them financially. Gen X is the ultimate "sandwich generation." It’s no wonder they're financially stressed!
The latest LIMRA data show that this generation is struggling the most: 4 in 10 Gen Xers say they are saving regularly, compared with half of Gen Yers and Boomers. Therefore, it is not surprising that Gen X expresses the most concern around various financial issues like saving enough for retirement, carrying debt into retirement, and paying their children’s education costs.
Gen X needs our products, services, and support the most. They started their adult lives at a disadvantage, compared to the Boomers, and many were adversely affected by the “Great Recession.” Their recovery has started, but they have fewer years ahead of them than Gen Y to plan for their future and save enough. For the financial services industry, now is the time to pay attention to Gen X.
• Editor’s note: This article originally appeared as a post on LIMRA’s Industry Trends blog.
Nilufer R. Ahmed, Ph.D. is Senior Research Director at LIMRA.
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