With the influx of Gen Z members joining the workforce, they are beginning to form their own definitions of financial success.
According to recent research conducted by financial firm Empower, the average Gen Z individual believes that an annual salary of $587,797 and a net worth of $9.47 million are necessary for achieving “financial success.”
Despite their aspirations, Gen Z may not realize that such levels of success would place them in the upper echelons of American wealth. Earning over half a million dollars a year would position them within the top 1% of earners in 32 out of 50 states.
Interestingly, older generations have more modest definitions of financial success. Millennials aim for an annual salary of $180,865 and a net worth of $5.6 million, while Gen X targets $212,321 and $5.3 million, and boomers set their goals at $99,874 and $1.05 million.
Not only does Gen Z set the highest benchmarks for financial success, they are also the most confident in achieving them. 71% of Gen Z individuals expressed optimism about attaining financial success in their lifetimes, compared to 70% of millennials, 53% of Gen X, and 45% of boomers.
While wealth is not the sole measure of success across all generations, only 27% consider it the highest measure. The majority prioritize happiness, defined as the ability to spend money on things and experiences that bring joy. Other top measures of success include free time for pursuing personal passions and physical well-being.
Empower’s research also highlights that hard work, talent, networking, and luck are viewed as key factors in achieving success. Interestingly, 19% of Gen Z and millennials believe in the concept of “fake it ’til you make it.”
Overall, respondents feel that success is attainable with a combination of dreaming, planning, and making smart financial choices. Empower’s head of communications Rebecca Rickert emphasizes the importance of effort, outperformance, and a belief in meritocracy in achieving financial success.
Gen Z’s unique perceptions of financial success are further reflected in their views on living comfortably and financial security. However, economic challenges such as the pandemic, high inflation, student debt, and a competitive housing market have impacted their outlook on financial advancement.
As data indicates, Gen Z faces “money dysmorphia” and is losing faith in their ability to progress financially. A significant percentage of millennials and Gen Zers believe they are lagging behind previous generations in terms of financial success at a similar age.
