Gen X likes to spend. Whether it’s food, entertainment, healthcare or housing, they’re not restrained. The baby boomer generation is not shy either. They are right behind their young counterparts. Gen X spends around $83,000 a year. Baby boomers spend around $62,000.
But that is where the similarities between these two generations end. Why is it so different from what they spend?
“The baby boomer generation spends a lot of money on travel, healthcare, home improvements and grandchildren,” says Brian Vivo, president and CFO of JL Smith Holistic Wealth Management. “Generation X is a generation of sandwiches. They still help older parents and spend their children.”
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That’s not all. Let’s take a look at what Baby Boomers and Gen X look like when it comes to spending.
What the baby boomer generation spends
At this point, the baby boomer is thinking about retirement, semi-retirement, retirement or work options. Many have saved for years to retire and benefited from a decade-plus bull run on the stock market.
The value of the family is also highly valued, and as a result, baby boomers have a lot of fairness in their homes. Pensions and Social Security give them even more expenditure.
“They are asking how to save all this money and use it to enjoy retirement,” Vivo says.
This go-go spending phase is not forever. They don’t spend that much just as boomers age. “In the mid-’70s, you start to be late, that’s a late year,” he says.
There’s a lot of spending
For now, it doesn’t seem to be the case. With every dollar increase in financial wealth, Visa discovered that Americans over the age of 65 spent an additional 11 cents.
According to the Federal Reserve, Boomer ended in 2024 with more than $80 trillion in wealth.
They are also not particularly interested in leaving inheritance. About half of the baby boomers said they don’t expect to leave their inheritance when they vote for the Northwest mutual.
There is a full spending of this generation. Travel, food, entertainment and luxury items top the list. Healthcare is also a major factor in spending.
What XERS spends
Gen X is in a different position than the baby boomer generation. Known as the sandwich generation, Gen X has to care for older parents and children, and has to make financial and emotional sacrifices.
Gen X faces additional costs associated with health care, childcare and elder care, making it even more difficult to save money for retirement. That’s one of the reasons Gen X is late in savings due to retirement.
“What they saved is well below the average age,” Vivo says.
On the positive side, they make more money than anyone else. Gen X earns the highest income in the country. This allows Gen X to continue to spend. Furthermore, they see retirement in a different way than the baby boomer generation.
“For the baby boomers, it was common for them to get a job, crush it for 30 or 40 years, retire at 60 or 65, collect pensions, and live it,” said Stephanie Pomeiti, wealth advisor at Hightower Wealth Advisor. “Gen X is expanding that idea.”
I’ll reconsider my retirement
Many members of Gen X work from home and plan to continue working as much as possible. This is the case for two Gen X clients from The Poreiti. The couple is in the retirement cusp.
Both work remotely and have flexible job schedules, so there’s no reason to quit. This gives you more time before you have to tap on your retirement savings.
Gen X’s income also disproportionately goes to housing. Whether it’s rent, mortgage fees or home prices, living in America is expensive, and Gen X is at the brunt of that.
Generations have more debt than any other age group, primarily because they are stuck in the middle.
“Gen X Investors told us they are undertaking a large level of debt to manage care responsibilities. One in five (21%) say they need to provide financial support to their parents or children,” said Craig Hawley, president of National Pensions. “In addition, a quarter (24%) of Gen X investors are undertaking credit card debt to meet these financial commitments.”
Despite the challenges, Gen X has room to spend everything from travel to electronics. And that is not expected to change for a while.
In its peak acquisition stage, Gen X ended the fourth quarter with a wealth of $41.67 trillion. They are also ready to become richer as part of what Cerulli Associates says the wealth transferred in 2048 will be $124 trillion. Many of them come from the baby boomer generation.
The same thing is more
There may be many differences between Baby Boomers and Gen XX, but when it comes to spending money, they are more similar than different.
Whether they use their income for healthcare or travel, these two generations have a lot of cash and they are not afraid to use it.
