HSAs and Generation X: From Overlooked to Opportunity

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Search online about generations in the U.S. and you will find numerous articles about baby boomers and millennials. But the generation in between—those who today are generally between the ages of 38 and 53—is often overlooked: generation X (Gen-X). When it comes to health savings accounts (HSAs), however, you won’t want to ignore this group. In 2018 alone, roughly 85 percent of eligible Gen-X employees own an HSA*. As this is more than any other generation, marketing your HSA business  to Gen-X clients is well worth the effort, provided you keep in mind some key characteristics.

Knowing the ‘X’ Factors

Generation X may be the most overlooked generation in part because of its size and the number of years it spans. It represents approximately 64 million people, in contrast to millennials and baby boomers that each make up about 75 million people. It is a generation stretched thin, sandwiched between caring for children and caring for parents. Meanwhile, Gen-Xers are wondering if they are doing enough to prepare for their own retirement and healthcare costs. They see their parents, who have largely retired, as not doing as well financially as they hope to be when it’s their turn to retire.

Generation X is also the first generation to completely experience the switch from pensions to defined contribution plans. Add to that, Gen-X experienced two market downturns early in their saving years (2000–2002 and 2007–2009), which significantly affected the future growth of their savings.

Generation X is perhaps the most flexible generation when it comes to receiving information. They love in-person communication and they love technology. Most of all, they love simplicity. They already have a lot on their plates and don’t have time to sort through complexities. Because of this, they tend to like things consolidated. Having their checking, savings, HSA, and loans all at one place appeals to them, which is good news for financial organizations.

Because Gen-Xers may be providing financial support to both baby boomer parents and their own millennial children, their savings rate into HSAs is not as high as it should be to adequately prepare for their future. Add to that frequent distributions from their HSAs and it’s clear that there is room for improvement when it comes to how Gen-Xers save with their HSA.

A Ready Group of HSA Consumers

Gen-Xers heavily influence the HSA market because of the support they lend to the two surrounding generations. They have higher average incomes than both boomers and millennials. They like messaging that speaks to them directly. They look for authenticity and real-world situations that they can identify with. And once you have them as a client, they are brand loyal. Knowing these generational traits may be helpful as you develop a plan to market HSAs to this particular group of consumers.  

*Source: Logan Butler, “Health Savings Accounts Are Picking Up Serious Steam,” Benefits Enrollment, February 13, 2018, accessed August 29, 2018.