The recession took a whack at nearly everyone's retirement nest egg, but as a group, Generation X will have the most difficult time making up financial losses, according to a study by The Pew Charitable Trusts.
Generation X includes those born between 1966 and 1975. They lost the most during the recession and had the least saved up before the financial crisis hit, according to the study. Late baby boomers, born between 1956 and 1965, aren't doing much better.
Thanks to the dot-com boom in the late 1990s and the housing bubble leading up to the recession, early baby boomers, born between 1946 and 1955, fared the best among the five generational groups studied. It may be the last group to retire with sufficient savings and financial assets.
The study examined net worth, or assets minus debts; total financial assets and home equity from 1989 to 2010 to determine the financial health and retirement readiness of Americans.
"Late boomers and Generation-Xers lost significant amounts of wealth during the Great Recession, eroding their already low levels of assets," Erin Currier, who directed the study, said in a release. From 2007 to 2010, late baby boomers lost 25 percent of their wealth and those in Generation X lost 45 percent. Both groups were lagging in savings compared to other generations.
The other problem for the younger generations is accumulation of debt. In 2010, the asset levels of so-called war babies, born between 1936 and 1945, were 27 times higher than their levels of debt. That's in contrast to late baby boomers, with asset levels four times that of their debt and Generation X, whose assets were double their debts.
The study recommends policymakers pay particular attention to finding ways to encourage younger generations to save and prepare for the future.
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