Gen X can add one more financial problem to its list

• Social Security funds are set to begin depleting when today's 58-year-olds retire.
• Gen X is already struggling financially, with high debt and financial insecurity.
• It's another blow for the small, forgotten middle generation.

A storm is brewing for Gen X.

The forgotten generation has already been quietly contending with economic headwinds, and now they might end up bearing the brunt of the looming retirement crisis.

That's because, taken together, the two primary Social Security funds are set to only be able to pay out full benefits through 2035; the Old-Age and Survivors Insurance Trust Fund, one of the main funds comprising Social Security, will start getting depleted in 2033.

That's bad news for the Gen Xers currently ages 56 to 58: Come 2033 and 2035, they'll start turning 67, making them eligible for Social Security — and they might end up with reduced benefits.

In other words, the moment that today's older Gen Xers are ready to retire, their Social Security benefits could start to shrink. That could be a real problem for a generation that was already suffering in silence. Gen Xers — born from 1965 to 1980 — have been deemed the country's "neglected middle child" by the Pew Research Center.

Gen X is deeper in debt and more worried about finances than other generations

You might be able to chalk up Gen X's invisibility to the fact that, per the Library of Congress, they're the smallest generation population-wise. Their plights have been dwarfed by millennials' massive ranks and prominent woes, and the huge peak boomer population that's about to settle into retirement.

But Gen Xers have already been quietly dealing with some financial insecurity. In July 2023, Business Insider — in partnership with YouGov — surveyed over 1,800 Americans spanning five generations, asking about work, money, and relationships. And among the different generations, Gen Xers were the most likely to report that they were feeling financially insecure.

Experian consumer data shows that the total average debt for Gen X has been near or over $150,000 in the third quarters of 2021 to 2023, higher than both their younger and older counterparts. The generation also had over $9,000 in average credit card debt, based on data from the third quarter of 2023, which was not only a rise from their average credit card debt a year prior but far above the national average of $6,501 or the average for other generations.

"Generation X is the generation most likely to have the richest credit mix," the Experian post stated. "That may sound like a flex, but in practical terms it means these consumers are likely to have multiple monthly payments to service—think student loan, mortgage, credit card and car payments."

That's not to say other generations aren't encountering similar challenges. According to a new TransUnion study based on credit bureau data and a December 2023 survey of just over 1,200 Gen Z and millennial consumers, the youngest generation is disproportionately struggling to balance a range of credit products amid high inflation.

Specifically, Gen Zers are seeing higher levels of delinquency on products like credit cards and auto loans compared to millennials 10 years earlier, with 75% of Gen Z respondents saying the pandemic negatively influenced their finances.

"Gen Z consumers have seen their finances significantly impacted by the pandemic and its aftermath, even more so than the challenges faced by Millennials as a result of the Global Financial Crisis," Michele Raneri, vice president and head of US research and consulting at TransUnion, said in a statement.

An AARP Financial Security Trends Survey from January showed that around a third of those aged 50 and over — that is, the results include part of Gen X — are somewhat worried about having enough money to feel financially secure in their retirement. Plus, around a quarter of them said they were very worried.

In addition to those concerns, how much older Americans have in retirement savings varies — from 20% of older respondents in the survey, excluding those who don't know about their savings, who aren't retired saying none to 7% saying at least $1 million.

That all comes as "peak boomers" stand poised to unleash a retirement tsunami. Those are the final boomers to retire, and they're facing similar challenges — over half will be mostly relying on Social Security for income to get by, according to a report from the Alliance for Lifetime Income's Retirement Income Institute. That could set the stage for the new crop of Gen X retirees to arrive in an already-precarious retirement economy.

Are you a Gen Xer worried about affording retirement? Contact these reporters at jkaplan@buisnessinsider.com, mhoff@businessinsider.com, and asheffey@businessinsider.com.