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Financial Mirror (Cyprus) - - FRONT PAGE -

The good news for Gen­er­a­tion X, those Americans born be­tween 1965 and 1980, is that they have higher in­comes now than their par­ents had at the same age. The bad news is they Gen Xers have ac­cu­mu­lated far less wealth.

Ac­cord­ing to a new re­port from re­searchers at The Pew Char­i­ta­ble Trusts, the younger gen­er­a­tion’s house­hold in­come av­er­ages a bit more than $43,000 a year com­pared with $31,000 a year earned by their par­ents. And 75% of Gen Xers also make more than their par­ents did at the same age.

The bad news on the Gen Xers wealth be­gins with debt. They have ac­cu­mu­lated nearly six times as much debt as their par­ents at the same age. Stu­dent loans, credit card debt, and med­i­cal and other debt av­er­ages more than $7,000 for Gen X com­pared with a lit­tle over $1,000 for their Baby Boomer par­ents. And, Pew re­ports, among Gen Xers who have ex­ceeded their par­ents in­come, those with col­lege de­grees are less likely to sur­pass their par­ents wealth, mostly as a re­sult of stu­dent loan debt.

A startling find­ing is that half of Gen Xers who started out in the bot­tom 20% based on their par­ents’ in­come dis­tri­bu­tion re­main on the bot­tom rung of the lad­der.

Con­versely, those who started out with par­ents in the top 20% of the in­come dis­tri­bu­tion have a 40% chance of stay­ing on the top rung.

Ac­cord­ing to Pew, those Gen Xers who were raised at the bot­tom rung of the lat­ter and who re­main there still are more likely than their peers to be sin­gle (only 44% are in a cou­ple) and to lack a col­lege de­gree (just 2% are col­lege grad­u­ates). Me­dian non-home-eq­uity based wealth in this group is just $778.

Con­versely, those Gen Xers raised on the top rung are more likely to be in a cou­ple (83% are) and 71% are col­lege grad­u­ates. Me­dian non-home-eq­uity based wealth in this group is more than $69,000.

Pew sums up its find­ings this way: “Gen­er­a­tion X is dis­cussed sig­nif­i­cantly less in the me­dia than are baby boomers or mil­len­ni­als, the much larger gen­er­a­tional co­horts that book­end it. De­spite its small size, how­ever, Gen X pro­vides crit­i­cal in­sights for re­searchers and pol­i­cy­mak­ers into chang­ing fam­ily bal­ance sheets. Gen X may also be a har­bin­ger of de­clin­ing op­por­tu­nity for many Amer­i­can fam­i­lies now and in the fu­ture. … With­out ad­e­quate wealth among Gen Xers, the mo­bil­ity of not just the cur­rent gen­er­a­tion, but also the next, could be at risk. Ex­actly how all of this will af­fect equal­ity of op­por­tu­nity in the fu­ture is un­clear, but it in­di­cates a strong need for poli­cies that cre­ate wealth-build­ing op­por­tu­ni­ties for Gen Xers and the younger co­horts who are fol­low­ing them into fi­nan­cial ma­tu­rity.”

That is a sober­ing view of what’s in store for both Gen­er­a­tion X and the Mil­len­ni­als that fol­lowed them.

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