The definition of financial success is highly personal, as it should be. And, perceptions of success vary significantly across generations, with younger cohorts often setting higher benchmarks for income and net worth compared to older generations. A recent study by Empower highlights these generational differences, revealing that while younger individuals aspire to significantly higher financial milestones, actual earnings and net worth data tell a different story.
Generational Expectations for Successful Income
The study reveals that younger generations, particularly Gen Z, have set ambitious financial goals. Gen Z respondents believe that an annual salary of approximately $600,000 is necessary to achieve financial success, a figure that is nearly nine times the national average.
In contrast, older generations, such as Baby Boomers, have more modest income expectations. However, all generations have a big gap between how they define success and the reality of the national average.
Let’s take a look at how each generation defines a successful income, and the reality for each cohort:
Gen Z (born between 1997 and 2021): Gen Z defines a successful annual salary at a whopping $587,797. The average actual salary for Gen Z is around $30,000-$50,000 (information sources vary) . It appears that Gen Z is optimistic about their future earning power.
Millennials (born between 1981 and 1996): Millennials define a successful salary as $180,865. The actual average for Millennials is between $50,000-$110,000.
Gen X (born between 1965 and 1980): Gen X’s definition of a successful salary is $212,321. This is higher than the estimates for national average which range between $100,000-$120,000.
Boomers (born between 1964 and 1946): Boomers define salary success at $99,874. Estimates for actual averages are between $40,000-$60,000.
Generational Expectations for Net Worth
When it comes to net worth, the disparities between generations are equally pronounced as are the differences between how success is defined and the reality of the actual average net worth by age.
Gen Z: Gen Z defines a successful net worth at $9.5 million. The average net worth for people in their 20s is $113,084 and the median is $7,638.
Millennials: Millennials say you need $5.5 million to have a successful net worth. The average net worth for people in their 30s is $317,171 and the median is $35,649.
Gen X: Gen X’s definition of a successful net worth is just what millennials say: $5.3 million. The average net worth for people in their 40s is $791,616 and the median is $125,370. For people in their 50s, the average net worth is $1,406,887 and the median is $288,263.
Boomers: Boomers define a successful net worth at $1M. The average net worth for people in their 60s is $1,703,727 and the median is $439,154.
Learn more about net worth:
Why the Big Disparity Between Expectations and Reality
The disparity between perceived and actual financial metrics, especially among younger generations, suggests heightened expectations, possibly influenced by social media, economic uncertainty, and rising living costs.
Understanding the differences between hopes for the future and reality is crucial for financial planning and setting realistic goals aligned with one’s career stage and economic environment.
The survey found that Americans believe that success comes from: hard work, talent, who you know, as well as luck & circumstance.
Real Success Isn’t About Money
The reality is that true success isn’t just measured by the size of your bank account or the value of your assets. While financial goals are important, they should serve as tools to enable a fuller, more fulfilling life. Success is about achieving balance—whether it’s having the freedom to pursue your passions, spending quality time with loved ones, or contributing to something larger than yourself. Real success comes from feeling content, secure, and empowered, not from hitting a specific number on a paycheck or investment statement.
In the Empower survey, only 27% rank wealth as the highest measure of financial success. Her is what Americans say is most important:
- Happiness! Fifty nine percent of survey respondents say that happiness is the most important benchmark for success
- Also important are:
- Being able to spend money on the things and experiences that bring the most joy
- Doing what you love
- The luxury of free time to pursue personal passions.
The Top 3 Things to Do if You Want Financial Success
While happiness is the real goal, when it comes to achieving financial success, certain money moves stand out.
The survey revealed what counts:
- Nearly half of people (45%) believe having a financial plan is key
- 30% credit building up retirement savings, like 401(k) investments
- Another 27% see investing in stocks as a crucial wealth-building move
- Additionally, one in three (30%) say that receiving quality financial advice is invaluable
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