As more and more members of Gen Z enter the workforce, they're starting to develop ideas of what it means to be financially successful.
According to a recent survey from financial firm Empower, Gen Zers on average believe an annual salary of $587,797 and net worth of $9.47 million are needed when they envision "financial success."
Gen Z may not realize this, but that kind of success would put them in the upper, upper echelons of American wealth.
In fact, pay that exceeds half a million dollar a year would put them in the top 1% of earners in 32 out of 50 states, according to separate data.
By contrast, older generations have much more modest definitions of financial success. For millennials, that means earning $180,865 a year with a net worth of $5.6 million, the Empower survey found. For Gen X, the respective numbers were $212,321 and $5.3 million, while boomers put theirs at just $99,874 and $1.05 million.
Not only does Gen Z have the highest benchmarks, they are also the most confident in reaching them: 71% said they are optimistic they will achieve financial success in their lifetimes, compared to 70% of millennials, 53% of Gen X, and 45% of boomers.
To be sure, your bank account isn't the only way to gauge success. Across all generations, only 27% said wealth was the highest measure of success, while 59% said happiness—defined as "being able to spend money on the things and experiences that bring the most joy."
Thirty-five percent put free time, meaning the luxury to pursue personal passions, at the top, and 35% said physical wellbeing was the top measure of success.
Empower also found Americans view the keys to achieving success as a combination of hard work, talent, knowing the right people, and some luck. But 19% of Gen Zers and millennials say the secret to success is "fake it ‘til you make it."
"Fortune favors the bold, and people feel success is within their grasp with the right combination of dreaming and planning," Rebecca Rickert, head of communications at Empower, said in a statement. "It’s about disciplined, smart money choices, but overall people define financial success as very meritocratic, and a little serendipitous. There’s a sense that effort and outperformance will take you far."
Other surveys have also pointed to Gen Z being an outlier on perceptions of what it takes to live comfortably and feel financially secure.
But their formative years have also been shaped by major economic dislocations like the pandemic as well as the highest inflation in more than 40 years, heavy student debt, and a tight housing market that is accessible to fewer Americans.
As a result, separate data show Gen Z suffers from "money dysmorphia" and have started to lose faith in their ability to get ahead. That’s why 74% of millennials and 65% of Gen Zers report feeling they’re “starting further behind financially” than prior generations at the same age, per a 2023 USA Today survey by Harris Poll.
