Recent findings by financial services company Empower have revealed that perceptions of an American’s success vary by generational group. The average American says an annual salary of $270,000 represents a definition of financial success, according to opinions sharply divergent among generational groups, reflecting changing economic realities and aspirations.
Generational Perspectives on Wealth
Baby Boomers, born before 1964, feel financial success is within reach with an annual income of just under $100,000. Gen Xers and Millennials believe that such success will not be feasible without an annual salary of at least $180,000 to $212,000, but Gen Z’ers, those born between 1997 and 2012, believe the bar for success must be well over $587,000 annually.
Though expectations are much higher, 71% of the Gen Z respondents were optimistic that they would achieve financial success in their lifetime compared to all others. To many, this optimism runs counter to economic challenges that have been informed their outlook on finances like inflation and stagnated wages.
Why the Disparities Exist
Experts give several reasons for generational differences: different life experiences and economic conditions. According to Rebecca Rickert, head of communications at Empower, today’s Americans regard financial success as the result of personal determination rather than a predetermined set of circumstances. Another reason is social media, where such networks often dramatize the acquisition of wealth and success, especially affecting the younger generations.
The Great Wealth Transfer
But complicating this picture is that by 2045, the Boomers stand to transfer an estimated $53 trillion to their children. That is the largest transfer ever seen. Many Millennials and Gen Zers will come into big bucks from inheritance. However, according to studies, they don’t feel as prepared to manage these windfalls adequately.
As financial goals change, so do definitions of success. Depending on the generation, Americans value not only wealth but also personal well-being and time freedom, revealing that money is not enough to guarantee happiness.
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