Generation X (Gen X) – Definition

Cite this article as:"Generation X (Gen X) – Definition," in The Business Professor, updated May 22, 2019, last accessed November 26, 2020,

Back to: Management & Organizational Behavior

Generation X (Gen X) Definition

Generation X refers to the generation born before the millennial generation (often called generation Y) . Americans who fall between the age group of mid-1960s and early 1980s are called Gen X.

The category of people born after the baby boomers are named Gen X. William Straus and Neil Howe are researchers who specified the year of birth of Gen X (1961 to 1981). Birth years are however not the only distinguishing factors for different generations, there are traits and characteristics that set them apart.

A Little More on What is Generation X (Gen X)

There is always a history to the name of each generation, Generation X is not an exception. Also, individuals born within the same time frame tend to exhibit common traits that results in their generation being named after a specific trait. Examples are the Greatest Generation (1901 to 1924), the Silent Generation (1925 to 1945), the Baby Boomers (1946 to 1964), among others.

A novel by Douglas Coupland that was published in 1991, birthed the name “Generation X”. Generation X is often regarded as the ‘in-between’. generation because it overlaps with the Sandwich Generation. Gen X has a population of about 50 million in the United States.

Baby Boomers

The Baby Boomers is the generation of people born between 1944 and 1964, while Gen X refers to the set of people born between the mid 1960s and early 1980s. According to a recent survey by Salesforce in investment preferences and financial habits of both generations, these are the findings;

  • Gen X exhibit a higher level of self-direction when compared to Baby Boomers.
  • Gen X clients have little time for financial advice, they prefer technological tools that monitor their finance.
  • 72% of Baby Boomers trust their financial advisors while only half of Gen Xers feel this way.
  • Gen X clients are busier and love performing tasks online.
  • 73% of Gen X clients select an advisor based on peer review compared to 57% of Baby Boomers.
  • Gen X avoid investment risks unlike baby boomers.

According to data and statistics, Gen X individuals are approaching their peak-earning years and in 30 years time, Gen X will take over wealth from Baby Boomers. A Deloitte report in 2015 also states that by 2030, the wealth of Gen X will triple from $11 trillion to $37.

Also, a survey by the Nielsen Company in 2015 states that Gen Xers are confident about their future finance as only 23% of them save money monthly. The survey also reveal that 58% were in debt while 24% to live Social Security after they retire. Furthermore, a Harris poll reveal that 47% of Gen Xers maintain that saving enough for retirement was important.

In relations to the investment habits of Gen X group, a recent research that was conducted by Goldman Sachs which incorporated the Investment Company Institute data reveal the following;


An average of $194,000 was invested in mutual funds by Gen Xers. This average shows that 17% of Gen Xers have less than $50,000 invested, 46% have less than $100,000, and 29% have under $250,000.

Baby boomers on the other hand have an average of $300,000 invested in mutual funds with 18% of them having less than $50,000, 29% under $250,000, while $150,000 amount to median holdings. This shows that Baby Boomers have been investing and dabbing for more years than Gen Xers.

Market thinking is said to have significant effects on the investment and saving culture of Gen Xers as compared to Baby Boomers. For instance, Gen Xers began investing at a period when there was low return in investment as against Baby Boomers who have been investing as far back as 1991. Baby Boomers are then at the advantage of higher returns, about three times greater than that of Gen Xers.

High market valuations such as technology bubble and dotcom bubble in the late 1990s were prevalent when Gen Xers started saving. Also, bear market and the financial crisis of 2008 had great impacts on their investment portfolios. Gen X investors generally have experiences with major market declines which has affected them negatively.

Aside from the adverse effects of market timing that Gen Xers were faced with, there were other challenges. According to a report by Goldman, quite a number of Gen Xers enjoy a relatively lower wealth than that of their parents and this made it difficult for them to maintain the same life and spending patterns that their parents maintained.

In addition to their lower wealth was spike in the cost of education, health care, transportation, feeding, among others which made it a bit difficult for Gen Xers to spare some money as savings. The real incomes of Gen Xers was at an average annual rate of 1.8% when compared to Baby Boomers who had a rate of 3.0% when at their age.

An Ameriprise Financial study that was conducted in 2015 with about 1,500 as survey subjects reveal that a higher percentage of Gen Xers do not rely on Social security or pension as their retirement plan. Rather, the have other plans towards funding their retirement. According to the study, ¾ of respondents have plans to work after retiring from their careers.

This data corroborates existing survey and retort by IRI that only 33% of Gen X “lacked full confidence that they will have enough money to cover their retirement needs,” unlike 63% who have no hints of how their retirement needs will be settled. Hence, instead of Gen Xers moving to a downside country after retirement, they have plans to engage themselves Liguria and intellectually and also make a living for themselves after they retire.

Financial planning is of importance to Gen X, this helps them alleviate financial stress that they might encounter in the future. Here are some recommendations of how Gen Xers can plan financially and also avert dangers associated to an unplanned financial life;

  1. Have a detailed and realistic financial plan

As a Gen Xer, it is vital that you make budgeting and saving a permanent habit, this will in turn help you later in life. Having a comprehensive financial plan entails a financial plan for all aspects of your life; business, family, personal needs, future expenses, investments, savings and others. You might need to hire a professional financial advisor in this regard. An adequate financial planning would also help you know your present financial status and efforts needed to achieve your intended financial goals.

  1. Plan for estate settlement

This entails that as a Gen Xen, all processes relating to transfer of possessions and properties are well planned. This include having a will for an estate, and facilitating an easy transfer of estate to your heirs logically and with due process.

  1. Proper Debt Management

As a Gen Xer, it is important that you manage your debt so that your debt situations will not turn awry. If you need the help of a financial planner or a debt manager, do not hesitate.

  1. College Planning

This is a financial plan for college expenses of your children. It is however advisable that retirement savings should be separated from and not be diverted into college funds. Instead, a Davina account can be opened for the purpose of your kid’s college fee. Children can also make contributions into this account.

  1. Have conversations with your parents

As a Gen Xer, it is high time you discussed with your parents about their finances and health of you have not done so. This is another way to plan financially and avert the effects of an unplanned life. For instance, if your parents are not in good health conditions and they have no estate plan, you can get this done with their approval. This may entail that you involve an elder care attorney. Also, purchase long-term care insurance and supplemental insurance policies to cover their medical expenses.

  1. Train your children to contribute

Ensure that your grown children are coached in financial responsibilities. Have retiring children who help you in settling household expenses so that this can lessen the weight of pressure that you as an individual carry.

Reference for “Generation X”

Research articles for “Generation X”

Generation X and the public employee, Jurkiewicz, C. L. (2000). Public Personnel Management, 29(1), 55-74.

Managing our future: The generation X factor, O’Bannon, G. (2001). Public Personnel Management, 30(1), 95-110.

Baby Boomers, Generation X and Generation Y? Policy implications for defence forces in the modern era, Jorgensen, B. (2003). foresight, 5(4), 41-49.

Workplace learning and Generation X, Bova, B., & Kroth, M. (2001). Journal of Workplace Learning, 13(2), 57-65.

Leading Generation X: do the old rules apply?, Rodriguez, R. O., Green, M. T., & Ree, M. J. (2003). Journal of Leadership & Organizational Studies, 9(4), 67-75.

High hopes in a grim world: Emerging adults’ views of their futures and “Generation X, Arnett, J. J. (2000). Youth & Society, 31(3), 267-286.

Generation X: Anthropology in a media‐saturated world, Ortner, S. B. (1998). Cultural Anthropology, 13(3), 414-440.

Was this article helpful?