A new report shows that members of Gen Z — individuals born between 1997 and 2012 — define “financial success” as earning nearly $600,000 per year. That’s nearly twice as much as the salaries other generations consider financially successful, and far more than the amount of money most Americans make in a year.
It’s a phenomenon that may in part be explained by the unique circumstances in which Gen Z Americans were raised — with social media and endless digital comparisons to more glamorous lives those apps enable. It’s also a generation that’s come of age amid historic financial and health care crises, climate change and political instability.
The survey, conducted by Empower, a financial services company, found that members of Gen Z define financial success as earning an annual salary of $587,797 and possessing $9.47 million in assets. That salary is nearly nine times as much as the average full-time worker’s annual earnings — currently around $60,580, according to the Bureau of Labor Statistics. And the $9.47 million in savings is leagues above what the average American has across their savings, checking and investment accounts — $62,410, according to the Federal Reserve's 2022 Survey of Consumer Finances.
“What I wonder about is, what do they even mean by financially successful?” said Eric Arzubi, a child and adolescent psychiatrist and assistant clinical professor at the Yale Child Study Center. “I gotta believe, if they're looking at almost $600,000 a year, they're not looking at just being able to pay the bills.”
Gen Z is the first generation to experience a childhood and adolescence fully integrated online. Facebook launched in 2006, the same year Twitter was founded, and Instagram came online in 2010. When TikTok started in the U.S. in 2018, the youngest members of Gen Z were five or six years old; the eldest were in their early 20s, ready to start dreaming of their adult lives and assessing the possibilities.
More than 90% of Gen Zers regularly use social media. And as anybody with even one social media account knows, apps like TikTok and Instagram offer glimpses into the (often meticulously curated) lives of individuals who, frankly, seem like they’re living our fantasy. A perfectly innocent, five-minute scroll sesh can bombard you with irrefutable evidence that there are people living in nicer apartments than you rent, buying pricier skincare products than you can afford and wearing clothes you couldn’t dream of splurging on — making you, by comparison, feel a little less satisfied with your weekend road trip now that you’re comparing it to another couple’s two-week retreat in the Maldives. This can redefine what success looks like.
“That's what people naturally do, right? You index yourself against other people. That's just kind of human nature,” Arzubi said. “We all know that the level of happiness doesn't necessarily correlate with what people are seeing online, but that doesn't matter.”
There’s a name for this phenomenon: upward comparison. It’s the flipside of downward comparison, in which individuals compare themselves to those with fewer resources. Downward comparisons can translate to feelings of gratitude, while upward comparisons can leave individuals feeling dissatisfied with their lives, though research also suggests upward comparison can motivate individuals to create positive changes.
How other generations define success
Other generational cohorts don’t define financial success in Gen Z’s terms. Millennials (born between 1981 and 1996) and members of Gen X (1965-1980) said in the survey they’d define financial success as earning annual salaries of $180,865 and $212,321, respectively. Boomers, born between 1946 and 1964, defined financial success as having an annual salary of $99,874.
But there may be a flaw in the way we’re interpreting this data. Because it’s not as if Boomers, Millennials and Gen Xers were surveyed when they, too, were in their teens and 20s, Jolie Silva, a psychologist and Clinical Director of New York Behavioral Health, told Salon. The data may simply illustrate the ways in which younger individuals conceptualize what it takes to make a living.
“You're asking people in different age brackets, which confounds the entire thing, right?” Silva said. “When you described the report to me, the first thing that came to mind was, ‘Well, you're asking teenagers versus people who are 60 years old, right, who have a practical understanding of what things cost.’”
That’s not to say that members of Gen Z don’t understand how the world works.
“Even if they had asked all of these generations when they were all 20 years old, and Gen Z still said, “I need $600,000” … well, first of all, things cost more money, right?” Silva said. “The things that Gen Z have been exposed to, compared to previous generations, even millennials, is exponentially more varied in its depth and in its range, and what people are posting on social media is very often tied to financial success.”
Why the economy may be to blame
This introduces one final dimension to consider: the economy that Gen Z grew up in. For the oldest members of Gen Z, their preteen years were spent in the 2008 Great Recession, when as many as 30 million Americans — one in 10 — lost their jobs. In 2009, the minimum wage was raised from $6.55 per hour to $7.25 per hour, and has remained there ever since — the longest the national minimum wage has gone unadjusted since 1938.
Homeownership, once regarded as a stable, accessible pathway for middle-class families and couples to build wealth, has become an impossible dream for most Americans. And for those looking off toward the horizon, the Social Security trust fund, once a reliable system Americans could trust would take care of them after retirement, is now projected to become insolvent in 2035.
I asked Arzubi whether he thought members of Gen Z may feel like they need to prepare for an adulthood in which public systems and institutions aren’t able to take care of them as promised. His answer was nuanced: “I think it's a great take, and I don't know that they would be able to verbalize that. I don't know that they'd be able to say, ‘Well, look, the world's on fire.’”
Instead, growing up in a political and economic environment that feels “turbulent, unstable and fragile” might mean Gen Z foresees a world in which they need “a financial moat,” he said — even if they aren’t actively aware that they’re viewing the future in those terms.
“In general, I think we were all raised hoping and expecting that every generation does a little bit better,” Arzubi added. “But that's not necessarily the case."
CORRECTION: An earlier version of this story erroneously referred to Empower as a “finance and insurance company.” Empower is a financial services company, but it doesn’t sell insurance.
