There's a lot of confusion when we talk about generations, particularly in the retirement space.
For many, it's tempting to use 'Boomer' as shorthand for 'middle aged', and 'Millennial' to mean 'young adult'. However, many Boomers (1943–1960) are now well past retirement age – and some Millennials (1982–2004) are now in their early 40s. The real middle-aged cohort is Gen X (1961–1981).
The current spike in people leaving the workforce early means that Gen X is starting to make up the bulk of retirees. And yet that’s largely being ignored.
Boomer vs. Gen X: why does it matter?
You might think it's all semantics, but as you’ll know, each generation has its own defining characteristics. Being able to create an appropriate strategy means understanding what makes people tick.
I'm a proud X'er myself (born in 1971) and at Goodmans FP I make a point of taking the unique needs of Gen X into account. My biggest lesson is that you can't advise Gen X as if they're Boomers.
There are a few important (and generalist) things to remember about this cohort. For example:
1. Gen X doesn't like rules
Members of Gen X continue to do things their own way – even during (and approaching) retirement. To see this idea of wanting to 'go your own way' in action, we just have to look at popular Gen Xers in the media. For example the eccentric billionaire Elon Musk. Rarely out of the news, he's most recently caused a furore with his recent shake-ups at Twitter. Here in the UK, we have politicians such Nicola Sturgeon and Boris Johnson – both separatists who like to thumb their noses at convention.
2. Gen X is individualistic
Gen X is very different from those who come before and after them. Boomers are very focused on hierarchy – and having a high status within it. Millennials crave structure and authority – often looking to Gen Xers as parent or teacher figures within the workplace. Stuck in the middle, Gen Xers are more interested in forging their own path.
Perhaps it's Thatcherism and the 'cult of the individual' that we grew up with. Whatever the cause, I've noticed that Gen Xers don't tend to care about society, because society didn't care about them. We were, after all, the original 'latchkey kids'. From a young age we've been mainly left unsupervised and encouraged to go it alone.
3. Gen X desires simplicity
As Gen X grows older, the last thing they want is complications. Their idea of a dream retirement is streamlining and stepping back. They're aspirational, yes, but not image-conscious.
So, while Boomers typically want to spend weekends enjoying their membership at a fancy golf club, Xers prefer a more rustic style of enjoyment. You're more likely to find them touring the countryside in a vintage campervan than lounging poolside at an exotic 5-star resort. They want to spend money on experiences such as music festivals – things that they couldn't do in their youth because they lacked the funds (and perhaps the confidence).
4. Gen X 'works to live', it doesn't 'live to work'
The UK government is currently scratching its collective head over the rise of economically inactive 50 to 64 years-olds. The number of people choosing early retirement has shot up since 2019, and initiatives such as Rishi Sunak's ‘midlife MOT’ are being proposed to entice people back to the workplace. I say: "Don't hold your breath".
Speaking to Xer clients, many retire because – to put it bluntly – they don't particularly enjoy working. Once they have enough money to leave, they do. During retirement, they're more likely to spend their days horse riding than volunteering. That famous individualistic streak strikes again!
How to build retirement advice and strategies for Gen X
Rebellious, individualistic and more concerned with simple pleasures than prestige – to me, that's Gen X in a nutshell. As financial planners, we’re in the privileged position to show that we understand this – when no one else does.
We know that these people aren’t ‘retiring stupidly’. Gen Xers want to do what they want to do, and are more likely to respond positively to someone who understands that.
Where else are they going to be able to go off-piste with their future plans while also being able to live the life they want?