"Gen Xers were derailed by three market downturns — the 1987 stock market crash, the 2000 tech stock meltdown and the 2008 financial crisis. They also were the "first 401(k) generation," which transferred the responsibility to fund retirement from employers to workers. This generation was also more likely to have grown up in a family split by divorce and as latch-key kids, two factors TD Ameritrade says lead to less financial security as adults."
[Channeling Luke Skywalker] Amazing. Almost every word of that is completely wrong.
Let's break this down, shall we?
1) Three market downturns 'derailed' investments.
The facts: Recessions have been occurring for longer than the US has been a country, but the above mentioned recessions were notable for their incredible bull markets which book-ended them. The biggest economic expansion in history occurred before the 2001 "dot-com" recession, and the most recent expansion is now the second longest in history. The 1987 crash did not prelude a recession at all. Since most Gen Xers were between the ages of 7 and 25 at the time of the "Black Monday" stock market crash it's a stretch to say this market downturn substantially impacted their long term savings.
2) This generation was also more likely to have grown up in a family split by divorce.
False. This is part and parcel to the urban myth that "
50% of marriages end in divorce" or its even more extreme cousin "
50% of marriages fail in the first 5 years." The data refute these myths. As it turns out, divorce rates from people married in the 1970s (the parents most likely to produce GenXers) and 80s (parents of millennials) are nearly identical, and only marginally different from those married in the 90s or early 2000s. Regardless of the decade, fewer than a quarter of marriages had ended in divorce after a 10 years.
source.3) "... as latch-key kids".
Unlike the divorce assertion, I have no hard data on this, but neither (apparently) does the author. Given that 'helicopter parenting' and 'overparenting' both became things for gen-x children, it seem dubious to suggest that kids of this generation were more prone to running around with no supervision when compared to generations past. Social services were called on parents who let their kid walk the four blocks to school alone. In fact, as a member of the tail-end of this generation I remember the societal change where kids suddenly had to always walk with a buddy and you could no longer roam the neighborhood without supervision in contrast to how my older siblings and cousins were raised. Amber-alerts and the National Center for Missing Children both were unveiled during GenXer's adolesence. We were the first generation that
couldn't run around like latch-key kids.
4) "...the first 401(k) generation"
There's a few things wrong with this assertion. For context, the 401(k) provision was put into place in 1978. It was rapidly adopted by large firms (and later smaller ones) as it provided a form of employee compensation that cost far less to the employer than simple raises. But there are two inherently misleading parts to calling GenXers the "first 401(k) generation. First - most GenXers were young kids (or not even born) when it was implemented; many GenXers did not get their first full-time job until the end of the 1990s, a full two decades after the program began. Second, it silently suggests that up until this point a company pension provided for most workers' retirement, echoed in the phrase "...transfered responsibility to fund retirement from employers to workers". This is yet another great retirement myth. Truth is there has never been a point when a majority of workers were covered by a pension plan. The high-water mark for retired people claiming a pension was in the early 1990s, and was barely over 1/3 of this cohort. Total pensions income has never averaged above 20% of total income. Bottom line: there has never been a time when the majority of workers in the US have recieved a pension, regardless of the generation, and at its peak income from a pension was (on average) a fairly small percentage of their total budget.