Baby Boomers vs Gen X: Who Spends More?

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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, but to a lesser extent.

Gen X is estimated to spend around $83,000 annually, while baby boomers are a little more frugal, spending around $62,000 annually.

But that’s where the similarities end between these two generations. What they spend on and why is different.

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“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."

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, giving baby boomers significant equity in their homes. Pensions and Social Security also increase their spending power. 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 abounds

Spending is across the board with Boomers. It's on travel, dining, entertainment and luxury items, to name a few. Health care is also a big component of their expenditures.

The more money they have, the more Boomers spend. For every $1 increase in financial wealth, Visa found Americans 65 and older spent an additional 11 cents.

What Gen Xers are spending on

Gen X is in a different position. Known as the Sandwich Generation, Gen X has to care for their parents and their children, which takes an economic and emotional toll.

Gen X faces extra costs associated with health care, childcare and elder care, making it difficult to save for retirement. It’s partly why Gen X is behind in saving for retirement.

On the positive side, they're making more money than everyone else. Gen X has the highest median income in the country. Many work at home and have flexible schedules, and see no reason to retire. That gives them a longer time horizon to save and to spend.

“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.”

Housing and debt

Gen X’s income disproportionately goes to housing. Whether it's rent or mortgages, 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,” says Craig Hawley, President of Nationwide Annuity. “Additionally, to meet these financial commitments, a quarter 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 not agree on everything, but when it comes to spending money, they are more alike than different.

Whether they are using their income for gadgets or travel, these two generations have money, and they aren’t afraid to use it.

Donna Fuscaldo is the retirement writer at Kiplinger.com. A writer and editor focused on retirement savings, planning, travel and lifestyle, Donna brings over two decades of experience working with publications including AARP, The Wall Street Journal, Forbes, Investopedia and HerMoney.