Generation X, Forged in Fire, Born for the Storm
By: Philip "Flip" O'Toole
Generation X
As proud members of Generation X, we wanted to take a moment to reach out a hand and say, “your struggle is real, and we are here to help if needed”. First things first. Who is Generation X? In the spirit of Jeff Foxworthy, if you are somewhere between the age of 44 and 59, you might be a Gen X’er. If you grew up outdoors with very little parental supervision and did not return home until the streetlights came on, you might be a Gen X’er. If you saw the original Star Wars Trilogy 850 times in the theatre, you might be a Gen X’er. If you rode your Huffy bicycle to the Arco station with a pocket full of quarters every morning in the summer of 1981 to play Pac-Man, you might be a Gen X’er. And if at 12 years old you and your 9-year-old brother rode the rapid transit from W 117th St to the Terminal Tower downtown, then walked from Public Square down W. 3rd to plop down $8 for two General Admission tickets to see your beloved Cleveland Indians play in front of fewer than 10,000 fans in cavernous Municipal Stadium, then you are without a doubt a Cleveland Gen X-er.
As kids, Gen X’ers were free and resourceful. We were forged in fire. To quote President Andrew Jackson, I do believe my generation was indeed “born for the storm, and a calm does not suit (us)”. But I must ask the question: are we truly prepared for the escalating storm?
The Escalating Storm
The oldest members of Generation X are in their mid to late 50’s and are consciously or unconsciously thinking about things like “have I saved enough money to make work optional?” or “I am only three years away from Social Security and six years away from Medicare, how did that happen so fast?” While I believe that these thoughts are certainly out there somewhere in the ether for many, there are perceived bigger concerns at hand for most. In addition to the questions about their personal financial situations, here are just three additional questions on the minds of many Gex X’ers right now:
• Will I become responsible either physically or financially (or both) for the care of my parents during the last stages of their lives?
• How do we ensure that whatever wealth our family has created is passed down smoothly from Baby Boomers to Gen X to Millennials?
• Will our grandkids benefit from a similar upbringing and education as our kids?
This tug-of-war currently going on in the minds of Generation X is why we are currently referred to as “The Sandwich Generation”, that point in time when both your parents and kids are tugging at some precious resources including your time, your energy and potentially, your wealth. Just this week, I blocked out a day on my calendar in March to take my Dad for his knee replacement surgery. On Sunday, my daughter called from college upset about the housing situation at her school for next year. This is a mild “Category 1” storm now and well under our control, but my wife and I are prepared for everything from a Tropical Storm to “Cat 5 Hurricane”.
Aging Parents of Gen X
My parents are 75-year-old Baby Boomers. They are just two of an estimated 73 million Boomers in the US according to the 2020 Census. They are both alert, active and relatively healthy, but the symptoms of “old age” appear to be revealing themselves a little more each day. I feel that it will not be long before my wife and I will need to start joining them at select doctor’s appointments. And that is just the beginning. According to a 2021 survey conducted by AARP, 3 out of 4 adults want to stay in their homes and communities as they age. And many do as nearly 9 out of 10 care recipients either live in their own home or the home of their primary caregiver (usually a child).
One question we ask our Gen X clients is what is your current strategy for allocating resources as your parents age? In a previous blog, I highlighted one of the most highly probable and devastating challenges many families face currently, an Alzheimer’s Disease or Dementia diagnosis in the family. Nothing will disrupt a plan quicker than the cognitive decline of a loved one. To put an even finer point on the question for our clients, we ask if you became not just personally responsible, but financially responsible for the primary care of your parents at some point, what is your plan to fund that responsibility? Then we listen.
Dependent “Children” of Gen X
I know I am going to come off as a grumpy old man for this paragraph, but just let me say that our kids have grown up in a completely different world than we Gen X’ers. We walked to school every day from kindergarten through 10th Grade and rode our bikes to football, basketball and baseball practice. We didn’t have school buses where we grew up and there was no such thing as “Travel Ball” for our parents to spend money on team fees, equipment, private lessons and gas and hotels every weekend. Our parents didn’t monitor our schoolwork by logging into a portal to see if we completed all our assignments. In fact, because both of my parents worked, they often had no idea when we had a bad grade, because we made sure to beat them home every day to the mailbox.
We currently have a college freshman and a high school Junior on the dole. According to a recent study in USA Today published in November 2023, 65% of parents give their adult children between the ages of 22-40 some kind of financial support and the average monthly amount is $718. That is perfectly fine if you are independently wealthy, but according to the study, 1 in 3 parents who support their adult children say it puts them under financial strain. For most of our clients, the question is not how do you get your adult kids off the payroll but instead “to what extent would you like to intervene financially in the lives of your children after you pass on to the greater glory?” This is not a question about asset allocation or investment selection. This is an estate planning question. More about that in a later blog.
What about Me?
With so much time, energy and money being focused on parents and kids, we wonder if Gen X’ers are dedicating enough time and energy to their personal wellbeing, both personally and financially? Like Flight Attendants say during the security check before takeoff, “please secure your oxygen mask first before attempting to help those around you”. We have some clients and friends who are on the precipice. The range of outcomes for the long-term lifestyle of Gen X’ers currently sandwiched between their parents and kids is staggering. Unfortunately, there is no Monte Carlo Simulation to calculate the infinite number of variables in play when it comes to caring for loved ones.
For us, it always comes back to asking questions. Questions like “how much capital have you saved and how much do you need to generate the income required to fully enjoy your next phase of life? How do you plan to grow that income enough to outpace the cost of goods and services which could double or triple over the next 20-30 years? In short, does your current plan provide that your empty nest years will be the best yet? And are you reviewing and updating that plan perpetually with your trusted Advisor?
Forged in Fire, Born for the Storm
To quote our 7th President once again, Gen X’ers were “born for a storm, the calm does not suit (us)”. The challenge presented to The Sandwich Generation is real. The next twenty to thirty years or so will be filled with caring for aging parents, moving our adult children off the payroll, all while attempting to live our best years during the empty nest phase. God willing, we will endure while also planning to leave a legacy that can serve future generations and favorite causes. I encourage you to go back and review all the questions laid out above. And once you have, the final question to ask yourselves is are we, who were forged in fire, prepared for the escalating storm?