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The Surprising Truth About How Much Gen Z and Gen X Think They Need To Be Successful
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What net worth Marks financial success? Generation Z said it would take about $9.5 million, while Generation X said it would take closer to $5 million to get the job done.
That’s according to financial services firm Empower’s “Secrets to Success” study, which was conducted in September 2024 based on online responses from 2,203 Americans 18 and older. But net worth – the number you get minus your assets Liabilities such as your loans, taxes and bills assets—The goals you should strive for may not be the same goals that another person finds meaningful.
Main points
- The average successful Gen Z net worth is $9,469,847 million.
- for Generation X Respondents stated that this figure was only US$5,638.205 million.
- The definition of “success” varies from person to person, and money is only one factor.
- Investing early, maximizing your retirement accounts and paying down debt are all ways to help you grow your net worth.
How much net worth different generations think they need
According to research from Empower, average net worth, considered a sign of success, differs significantly between generations. Here’s how different age groups view financial success:
| Average net worth considered successful by generation | |
|---|---|
| generation | average net worth |
| Generation Z | $9,469,847 USD |
| Millennials | $5,638,205 |
| Generation X | $5,295,072 USD |
| baby boomers | $1,049,172 USD |
| Comprehensive | $5,363,074 |
The same study also looked at what wages each generation considers to be financially successful, but money is only one aspect of a person’s success. Only 27% of participants rated wealth as the greatest measure of success. Happiness (59%) came first, with good health (35%) and the luxury of free time (35%) both ranking above money.
| Average salary for success across generations | |
|---|---|
| generation | average salary |
| Generation Z | $587,797 |
| Millennials | $180,865 |
| Generation X | $212,321 |
| baby boomers | $99,874 |
| Comprehensive | $270,214 USD |
How much net worth do you actually need?
While these numbers can give you an idea of generational differences, determining your ideal net worth is a personal decision. The process of determining how much you should save requires forecasting and financial planning, says financial planner Catherine Valega, founder of Green Bee Advisory.
“We look at their fixed expenses and discretionary expenses and then project how much money we need to maintain this lifestyle,” Valega said.
In its assessment, her firm also includes fixed income, e.g. social Security or pensionand then see how much assets the client needs to grow their net worth so that their portfolio can cover any gaps. The cost of living in your area certainly factors into this equation. For example, Valega said, at high altitudes cost of livingthe ideal net worth may exceed $5 million in investable assets.
As a general guideline, Fidelity Investments offers the following retirement savings Goals based on your age:
- By age 30, aim to save the equivalent of your salary.
- By the time you are 40, have saved three times your salary.
- By age 50, aim for six times your salary.
- By age 60, aim for eight times your salary.
For most people Empower surveyed, financial success lies in achieving goals like paying bills on time, building retirement savings, or owning a home.
How to increase your net worth
Increasing your net worth can provide you with flexibility, including choosing to engage in philanthropy or travel in retirement. Here are four tips Increase your net worth:
Start investing early
About 27% of respondents said investing in stocks is the top financial move that drives success. Valega says to start investing aggressively in stocks as soon as possible. “Live within your means so you can invest your free cash flow.”
Maximize your retirement savings
The sooner you start investing in tax-advantaged retirement savings vehicles, such as 401(k)s and Individual Retirement Account (IRA)the more likely you are to achieve your goals.
pay off your debt
pay off your debt Early on you can free up some cash flow for savings and investments. If you can, make extra payments to reduce your debt burden, but be aware of early payment penalties. Ask your lender about your options.
cut expenses
Writing down your expenses and creating a budget can help save some money. Simply being aware of your spending habits can also encourage you to change your behavior and curb overspending.
bottom line
According to research from Empower, the average net worth needed to succeed is about $5 million, but the number that’s right for you depends on your personal circumstances. When determining how much you need to save, consider your lifestyle and spending. Investing early, paying down debt, and tightly controlling spending are all important strategies for growing your net worth.
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