Won’t you come see about me
I’ll be alone, dancing, you know it, baby
Tell me your troubles and doubts
Giving me everything inside and out
Don’t You (Forget About Me), Simple Minds (1985)
Note: Depending on the mix, this song runs about five minutes. Set it on repeat as you read the following. It’ll help, plus it’s a cool song from a cool movie.
The year 1985 was a milestone marker in the lives of many Generation Xers. Born between 1965 and 1980 (so now between 56 and 41 years old), Gex Xers in 1985 witnessed the second presidential term of Ronald Reagan, the last Soviet Union leader to take power (Mikhail Gorbachev) and the hijacking of TWA flight 847. In pop culture, Don’t You (Forget About Me) by Simple Minds hit #1 on the US Billboard Hot 100 when it was featured in the generation-marking film The Breakfast Club.
The lyrics above are telling for Generation X. Are we forgetting about them? Too often, in the quest to reach and serve other generations (primarily Baby Boomers and Millennials), Gen X is forgotten or underserved by financial institutions. Gen X, a smaller generation (numerically) at 65 million, is stuck between (and behind) 72 million Millennials and 70 million Baby Boomers. In addition to mere population size, Millennials and Boomers also tend to receive far more attention from culture in general than Gen X. For better or worse, Gen X just doesn’t garner the headlines or attention other generations do. Sometimes described as “the last analog generation,” Gen X sits astride tectonic shifts in population, culture, technology and lifestyles. Neither the past nor the future, Gen X is increasingly an island of the forgotten.
Gen Xers are a uniquely “sandwiched generation,” shouldering the responsibility of both raising their own children (and grandchildren) as well as assuming increasing financial and caregiving responsibility for their aging parents. Gen X is also described as both a “wealth receiver and wealth protector” generation.
How and where can your credit union come into play for Gen X? Here are three key unique financial Gen X trends (and areas of opportunity for your credit union):
Gen X Challenge: Debt
Gen X is troubled by debt. Credit cards, student loans and spending too much on non-essentials are particularly troublesome. They are “under-saving” for retirement and much more likely than other generations to say they are having trouble reaching financial goals. Overall, Gen X shoulders the most debt of any generation, with an average of $125,000 per person (compared to an $88,000 national average debt). Not surprisingly, Gen X also has a lower-than average credit score (and a whopping 45-points lower than Boomers).
Credit Union Solution: Gen X is feeling the pinch between the vocal Boomer and Millennial generations. What can your credit union do to help Gen X members wrecked by debt and financial stress and worry?
Gen X Challenge: Wealth Transfer
As Boomers age and either enter or cruise deeper into their retirement years, a tremendous transfer of wealth is poised to occur in the next 25-years. Over 10,000 Boomers actually turn 65 every day. Often dubbed the “Great Wealth Transfer,” Gen X looks to be the primary recipient of close to $70 trillion. Corresponding studies indicate that up to 80% of these heirs (here’s looking at you, Gen X) will fire their parent’s current financial planner and look for new financial advisors after this inheritance.
Credit Union Solution: The Great Wealth Transfer isn’t coming; it’s here now. What is your credit union doing (or what should it do) to help Gen X members as they inherit their parent’s wealth?
Gen X Challenge: Retirement
As much as many Gen Xers (myself included) don’t like to talk about it, our own retirement looms increasingly more prevalent in our thoughts, if not necessarily in our planning. Again, the oldest Gen Xers are now in their mid-50s and early retirement is within sight for many. As they look at these later years of life, Gen X shows in multiple surveys that they are far more financially fragile and stressed about money than both the Boomer and Millennial generations. Only 23% of Gen Xers feel a sense of progress saving for retirement compared to numbers twice as high for Boomers. Close to 75% of Gen Xers feel they must make up ground when it comes to retirement, compared to just 66% of Millennials and 51% of Boomers. Some even describe Generation X retirement as a “catastrophe in the making,” with half of Gen Xers indicating they have no retirement savings at all. Pensions and Social Security, bulwarks of Boomer retirement planning, don’t look nearly as promising for Gen X.
Credit Union Solution: Too many Gen Xers are not ready for retirement. What will your credit union do to both encourage and guide Gen Xers to healthier financial retirement habits and practices?
Despite the many generational and financial challenges they face, Gen X definitely represents a wealth of underserved and untapped potential for credit unions. While credit unions must continue to serve all generations, focusing too much attention on Boomers and Millennials can come at the substantial cost of losing out on Generation X. In the prime of their employment and earning years, Gen Xers are cynical yet resourceful, hard-working yet passionate about enjoying life and fond of their past yet key technology-adapters.
To truly reach, serve and earn the trust and wallet share of Generation X, credit unions must take an omni-channel approach to them – including strategic planning, branding, member experience and employee training. By using such an approach, your credit union can step-up and fill a key gap in the Gen X financial lifecycle, playing the superhero role for the needs of millions of consumers. The time to step-up? Now.
Ask questions, challenge your team and take steps now at your credit union to assess where you stand in meeting and fulfilling the needs of this unique generation and … Don’t You (Forget About Gen X).