Baby Boomers vs Gen X: Who Spends More?
Gen X likes to spend. Whether it’s food, entertainment, health care, or housing, they aren’t holding back. Baby boomers aren’t shy either. They are right behind their younger counterparts. Gen X spends around $83,000 annually; Baby boomers spend about $62,000.
But that’s where the similarities end between these two generations. What they spend on and why are vastly different.
“Baby boomers are spending a lot of money on travel, health care, home improvements and their grandchildren,” says Bryan Bibbo, President and CFO of JL Smith Holistic Wealth Management. “Generation X is the sandwich generation. They are still helping out their elderly parents and spending on their children.”
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That’s not all. Here’s a look at what baby boomers and Gen X are up to when it comes to spending.
What baby boomers are spending on
At this point, baby boomers are thinking about retiring, are semi-retired, retired, or are in a work optional situation. Many have been saving for retirement for years, benefiting from the more than ten-year bull run in the stock markets.
Home values have also appreciated, resulting in baby boomers having a lot of equity in their homes. Pensions and Social Security give them even more spending power.
“They saved all this money and are asking how to use it to enjoy retirement,” says Bibbo.
This go-go spending phase doesn’t last forever. As the boomers age, they won’t spend as much. “In your mid-70s, you start to slow down. It’s the slow-go years,” he says.
Spending abounds
For now, that doesn’t appear to be the case. For every $1 increase in financial wealth, Visa found Americans 65 and older spent an additional 11 cents.
Boomers ended 2024 with more than $80 trillion in wealth, according to the Federal Reserve.
They aren’t too concerned with leaving an inheritance either. About half of baby boomers said they didn’t expect to leave any inheritance when polled by Northwestern Mutual.
Spending is across the board with this generation. Travel, dining, entertainment and luxury items are top of the list. Healthcare is also a big component of their expenditures.
What Gen Xers are spending on
Gen X is in a different position than the baby boomers. Known as the Sandwich Generation, Gen X has to care for their elderly parents and their children, which takes an economic and emotional toll.
Gen X faces extra costs associated with health care, childcare, and elder care, which makes it more difficult to save for retirement. It’s among the reasons Gen X is behind in saving for retirement.
“What they have saved is far below the average for their age,” says Bibbo.
On the positive side, they are also making money, more so than everyone else, which helps. Gen X has the highest median income in the country. That enables Gen X to continue to spend. Plus, they view retirement differently than baby boomers.
“For the baby boomers, it was common to get a job, grind it out for 30 or 40 years, retire at 60 or 65, collect a pension, and live on that,” says Stephanie Temporiti, a wealth advisor at Hightower Wealth Advisors. “Gen X is stretching that idea.”
Reimagining retirement
Many members of Gen X work at home and plan to keep their jobs for as long as they can. That’s the case for two of Temporiti’s Gen X clients. The couple is on the cusp of retirement.
Since both work remotely and have flexible job schedules, they see no reason to retire. That gives them a longer time horizon before needing to tap retirement savings.
Gen X’s income also disproportionately goes to housing. Whether it’s rent, mortgage rates, or home prices, living in America is expensive, and Gen X is feeling the brunt of it.
The generation has more debt than any other age group, largely because they’re stuck in the middle.
“Gen X investors told us they are taking on large levels of debt to manage caregiving responsibilities, with more than one in five (21%) saying they need to do so to provide financial support to their parents or children,” says Craig Hawley, President of Nationwide Annuity. “Additionally, to meet these financial commitments, a quarter (24%) of Gen X investors are taking on credit card debt.”
Despite the challenges, Gen X makes room to spend on everything from travel to electronics. And that isn’t expected to change for a while.
Gen X, which is in its peak earning phase, ended the fourth quarter with $41.67 trillion in wealth. It is also poised to get richer as part of what Cerulli Associates says will be $124 trillion in wealth transferred through 2048. Much of it will come from baby boomers.
More of the same
Baby boomers and Gen X may have a lot of differences, but when it comes to spending money, they are more alike than different.
Whether they are using their income for health care or travel, these two generations have a lot of cash, and they aren’t afraid to use it.
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