Gen X workers are struggling to save as cost of living swallows up wages

Millions of American workers who should be only a decade from retirement are finding their finances stretched by the cost of living, making saving impossible.

Gen Xers (aged 44-59) are most likely to have said they are living paycheck to paycheck in a poll of workers by Bankrate. Forty percent of Gen X respondents said they have nothing left to save after covering monthly expenses, more than the 34% of millennials, 28% of Gen Zs, and 28% of Baby Boomers who said this.

Poll participants in the South (38%) and Midwest (37%) are more likely to be living paycheck to paycheck, dropping to 32% of those in the West and 25% in the Northeast. Those earning less than $50K a year (43%) also have no money left to save at the end of the month, along with around one third of those earning up to $100K, and roughly a quarter of those above that threshold.

With inflation taking a larger chunk of wages, saving for retirement or just enjoying a comfortable standard of living is hard for workers.

“Living comfortably costs a lot more than it used to. Prices are up almost 21% since the pandemic first began in February 2020, requiring an extra $210 per every $1,000 someone used to spend on the items they both want and need. For the many Americans whose pay hasn’t kept up with inflation, higher prices essentially translate to an outright destruction of wages,” said Bankrate analyst Sarah Foster.

Just 19% across all generations and income levels told the survey that they are satisfied with how much they earn compared to 24% who are not. For those who say they are living paycheck to paycheck just 9% are satisfied.  Around one fifth of all respondents also feel they are not paid as much as colleagues with the same experience and qualifications, while 16% say there is not enough opportunity for promotion.

“For Americans, living paycheck to paycheck likely feels akin to walking a tightrope with no safety net, where the balance between expenses and earnings becomes a delicate dance,” added Foster. “It is true that the job market is a bit lopsided, with government and leisure hospitality jobs driving the bulk of the hiring. But it’s also true that layoffs and the unemployment rate remain historically low, hopefully helping continue to give Americans the bargaining power they need to ask for a raise and advocate for fair pay.”

For those unhappy with their earnings, a side hustle could be the answer. A separate Bankrate analysis found that 36% of American adults say they earn extra money beyond their main source of income. Additionally, side hustlers are earning more than they did last year, with the average side hustler making $891 per month, up from $810 last year.