• When today’s 58-year-olds retire, Social Security funds will likely be exhausted.

• Generation X is already struggling with financial problems and is heavily indebted and financially insecure.

• This is another blow to the small, forgotten middle generation.

A storm is brewing for Generation X.

The forgotten generation is already quietly struggling with economic problems and could now bear the brunt of the looming pension crisis.

This is because Social Security’s two main funds combined will only be able to pay out full benefits until 2035, while the Old Age and Survivors Insurance Trust Fund, one of Social Security’s main funds, will be depleted starting in 2033.

This is bad news for Generation Xers, who are now between the ages of 56 and 58: In 2033 and 2035, they will turn 67 and be eligible for Social Security benefits—and may face reduced benefits.

In other words, once older Gen Xers retire, their Social Security benefits could shrink. That could be a real problem for a generation that is already suffering in silence. Gen Xers – born between 1965 and 1980 – have been dubbed the country’s “neglected middle child” by the Pew Research Center.

Generation X is more indebted and more worried about their finances than other generations

Generation X’s invisibility may be due to the fact that it is the smallest generation in terms of population, according to the Library of Congress. Their plight is dwarfed by the enormous numbers and problems of Millennials and the huge Baby Boomer generation approaching retirement.

But Gen Xers are already quietly grappling with some financial insecurity. In July 2023, Business Insider—in partnership with YouGov—surveyed over 1,800 Americans from five generations about work, money, and relationships. And of all the generations, Gen Xers were the most likely to report feeling financially insecure.

Consumer data from Experian shows that Gen X’s average total debt was at or above $150,000 in the third quarter of 2021 through 2023, higher than their younger and older peers. Based on data from the third quarter of 2023, the generation also had an average of over $9,000 in credit card debt, which is not only an increase from their average credit card debt the previous year, but also well above the national average of $6,501 or the average for other generations.

“Generation X is the generation that likely has the richest credit mix,” the Experian post says. “That may sound like a boast, but in practice it means these consumers likely have multiple monthly payments to make – think student loans, mortgages, credit cards and car payments.”

The story continues

But that’s not to say other generations don’t face similar challenges. According to a new study from TransUnion based on data from credit bureaus and a survey of just over 1,200 Gen Z and Millennial consumers conducted in December 2023, the youngest generation is having disproportionately greater difficulty reconciling a range of credit products amid high inflation.

Especially for products such as credit cards and car loans, Generation Z is experiencing higher defaults than Millennials did ten years earlier. 75% of Generation Z respondents said the pandemic had a negative impact on their finances.

“Generation Z consumers’ finances have been significantly impacted by the pandemic and its aftermath, even more than the challenges Millennials faced as a result of the global financial crisis,” said Michele Raneri, vice president and head of U.S. research and consulting at TransUnion, in a statement.

A January AARP survey on financial security trends found that about a third of people over 50 — part of Generation X — worry about having enough money in retirement to feel financially secure. And about a quarter of them said they were very worried.

Adding to these concerns is the fact that the amount of savings older Americans have for retirement varies, from 20 percent of older respondents (excluding those who do not know about their savings) who have no savings at all to 7 percent who say they have at least $1 million.

All this is happening as the boomers are poised to unleash a retirement tsunami. These are the last baby boomers to retire, and they face similar challenges — more than half will rely primarily on Social Security to make ends meet, according to a report from the Alliance for Lifetime Income’s Retirement Income Institute. That could set the stage for the new generation of Gen X retirees arriving in an already precarious retirement economy.

Are you a Gen Xer who is worried about how much money you can spend on retirement? Contact these reporters at [email protected], [email protected]And [email protected].

Read the original article on Business Insider