Below is a complimentary Demography Unplugged research note written by Hedgeye Demography analyst Neil Howe. Click here to learn more and subscribe.

Be sure to check out his highly anticipated new book, The Fourth Turning is Here, which is now available for purchase.

Neil Howe: Which Generation Feels Most Financially Insecure? - z11

The average American needs over $200K a year to feel financially comfortable. By generation, Gen Xers feel the most economically insecure. (Bankrate

According to a new Bankrate survey, Americans are feeling significant economic pressure. Only 28% feel financially secure. And the average adult says they need an annual salary of $233K to achieve such security. That's over three times more than the average earnings of a full-time, year-round worker in 2021 ($75K).

By generation, Xers (ages 45-58) report the most financial pressure. Only 19% feel financially comfortable. That's lower than any other generation: Zers (18-26) 25%, Millennials (27-42) 28% and Boomers (59-77) 31%. Moreover, Xers believe they need an annual income of $273K to feel secure. Again, that stands out compared to other generations: Zers $193K, Millennials $224K, Boomers $240K. 

Neil Howe: Which Generation Feels Most Financially Insecure? - z10

Why do Xers' have a higher income threshold for financial security? Undoubtedly because, having entered midlife, they feel they need enough income both to save for retirement and to raise and educate their growing kids. Most Millennials are too young to feel this pressure, and most Boomers are too old.

And what causes Xers to feel such extreme financial insecurity? Their self-reported top two reasons are generic factors like high inflation (68%) and the current economic environment (57%). But a large share also cites insufficient retirement funds (49%). That's almost as high as Boomers (55%) and reflects a deep worry about whether they will ever have enough to retire. On the other hand, Xers are much more likely than Boomers to cite low income (33% vs. 18%). Younger generations also cite low income, but they're much less worried about retirement. 

Much of Xers’ exceptional financial stress can therefore be explained by their unique generational history and their current phase of life. (See “Gen Xers Hitting the Wall.”) They didn't share in the higher generational income mobility and retirement prep that Boomers experienced. That makes them more like Millennials. But unlike Millennials, they suspect they don't have enough time to catch up before retirement arrives. And that puts them in a very bad place, indeed.

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Neil Howe is a renowned authority on generations and social change in America. An acclaimed bestselling author and speaker, he is the nation's leading thinker on today's generations—who they are, what motivates them, and how they will shape America's future.

A historian, economist, and demographer, Howe is also a recognized authority on global aging, long-term fiscal policy, and migration. He is a senior associate to the Center for Strategic and International Studies (CSIS) in Washington, D.C., where he helps direct the CSIS Global Aging Initiative.

Howe has written over a dozen books on generations, demographic change, and fiscal policy, many of them with William Strauss. Howe and Strauss' first book, Generations, is a history of America told as a sequence of generational biographies. Vice President Al Gore called it "the most stimulating book on American history that I have ever read" and sent a copy to every member of Congress. Newt Gingrich called it "an intellectual tour de force." Of their book, The Fourth Turning, The Boston Globe wrote, "If Howe and Strauss are right, they will take their place among the great American prophets." The follow-up book, The Fourth Turning Is Here, hit shelves last week.

Howe and Strauss originally coined the term "Millennial Generation" in 1991, and wrote the pioneering book on this generation, Millennials Rising. His work has been featured frequently in the media, including USA Today, CNN, the New York Times, and CBS' 60 Minutes.

Previously, with Peter G. Peterson, Howe co-authored On Borrowed Time, a pioneering call for budgetary reform and The Graying of the Great Powers with Richard Jackson.

Howe received his B.A. at U.C. Berkeley and later earned graduate degrees in economics and history from Yale University.