Gen X Thinks They’ve Got Investing Figured Out. Data Says Otherwise

Abstract: A new white paper from Equitable Holdings reveals a striking disconnect: while many Gen X investors feel confident in their decisions, a significant portion lack a formal financial plan—raising concerns about blind spots as retirement approaches.

Gen X has long prided itself on self-reliance. But when it comes to money, that independence may be masking a structural weakness.

New data from Equitable Holdings suggests that while a large share of Gen X investors feel confident navigating markets, many are doing so without a formal plan—leaving critical gaps just as retirement moves from abstract to imminent.

According to a recent white paper from the financial services firm upwards of 40 per cent of the 65 million Americans who based on their age, qualify as GenX falls into this category, which from a glass half full perspective certainly can be viewed as good news for any financial advisors out there.

Conversely, viewing it from a glass half empty perspective, it begs the question: How savvy are they to dodge all the financial mine fields that investing brings to the table and still come out a winner at the end?
Then again, findings reveal those polled are for the most, part, savvy investors.

Nick Lane, president of Equitable points out in a release that “Gen X is the first generation to shoulder full responsibility for their retirement. They became DIY financial planners by necessity, not by choice.

“Now in the prime of their careers, with the oldest Gen Xers thinking seriously about how they will live the next 20 to 30 years in retirement, they face a new chapter – one that demands more than simply accumulating assets.”

According to Lane, in order to grow their wealth, plan for retirement and leave a legacy, Gen X “investors need comprehensive wealth planning and sophisticated strategies. They are primed to work with a trusted financial professional to help them achieve these top priorities.”

The white paper, entitled Approaching Retirement: Getting Gen X from Good to Great, finds that among those who do have a plan, half created it independently, “potentially leaving them vulnerable to blind spots without the guidance of a financial professional to develop a holistic strategy.”

How Gen X ended up in the situation they are, states Equitable in a release, is they entered the workforce during a major shift in the U.S. retirement landscape: “Employer-funded plans such as pensions gave way to employee-funded defined contribution plans such as 401(k)s and IRAs, placing the responsibility for retirement planning squarely on individuals.

“Notably, only 14 per cent of Gen Xers have access to a traditional pension, compared to 44 per cent of baby boomers. Additionally, as the inaugural class of the 401(k), Gen Xers had limited guidance and education on how to maximize these retirement savings plans.”

As for the role advisors should play, an executive summary in the white paper contains some sage advice for investors: They must understand what matters to them, respect Gen X’s financial acumen and success and provide a tailored approach.

It is also important to understand other concerns they may have. “As the sandwich generation, they are managing both aging parents and dependent children. Comprehensive plans that address lifestyle vision, mitigate longevity risk, and create multigenerational plans for the near – and longer-term are needed,” it states.