One Generation Needs a $500K-Plus Salary To Feel Successful: Does That Track With the Economy?

Many view the current U.S. economy as strong, but it’s no secret that there are some challenges. Persistent inflation following a spike in the very same during the COVID-19 pandemic left many Americans cash-strapped and saddled with a historic debt load, and a sea change in the nature of work — and the roles available — has left many workers in the lurch.

Despite the headwinds facing Americans from all walks of life, a recent Empower survey has cast light on one interesting statistic: Members of Gen Z (those born between 1997 and 2012) believe that the annual income necessary to feel financially successful is $587,797.

Read More: The Salary Needed To Afford America’s 50 Biggest Cities

Find Out: 10 Things Boomers Won’t Be Able To Afford in Less Than a Decade

Is this figure realistic in the current economy? Plus, how does it compare to those offered by respondents belonging to other generations, and how can one hope to achieve such an income?

Also see the minimum salary you need to be happy in every state.

Millennials Most Pessimistic, Boomers Most Optimistic

While the average number for all of those polled in terms of calculating what constitutes financial success was $270,214, this still represents a number that is more than three times larger than the actual average U.S. household income of $80,610, per the U.S. Census Bureau. This disparity can at least partially be explained by the fact that nearly half of Americans (49%) feel less financially successful than their peers, per the survey.

Millennials were the most likely cohort to suggest that financial success is harder for their generation to achieve (69%), while baby boomers were the least likely to agree with that statement (49%). Nonetheless, it seems that pessimism over financial success permeates all generations to some extent.

Real-world wages, in terms of post-tax income, come nowhere near even the average number of about $270,000. According to Statista data, boomers took home an annual average household income of $74,195 in 2023. Gen Xers, meanwhile, took home $113,886, millennials made $97,886 and Gen Zers saw an income of $57,039.

With no demographic coming anywhere near the target, its seems a logical conclusion can be drawn in terms of why economic pessimism and uncertainly may be a prevalent topic in the contemporary American discourse.

Check Out: Here’s How Much You Need To Earn To Be ‘Rich’ in Every State

It’s Not Just About the Money, but About What Wealth Can Buy

One insight garnered from the research had to do with the fact that wealth, in and of itself, was not necessarily a major driver when determining “success.” When asked what types of success they value most, respondents were quick to indicate happiness as the top pick (59% said so).

There’s one caveat, however: Attached to happiness is a definition reading “being able to spend money on the things and experiences that bring the most joy.”

It appears financial freedom and happiness are inextricably linked, at least according to researchers and respondents alike.

How Can You Become Wealthy While Living Within (or Below) Your Means?

There are countless ways to consider building wealth when starting from modest means. Consider Ramit Sethi’s three levers of investing to build wealth.

• The first is time, which means that investments take time to compound and grow. By starting as soon as possible, and sticking to a concrete investment schedule, you can get the ball rolling immediately.
• The second is the amount you invest — the more, the better. In tandem with the first lever of time, a significant principal will mesh with a longer time-horizon to produce greater wealth potential.
• The third lever is ROI, or return on investment. It’s not just about higher returns, but also taking lower fees into account. Make sure you’re maximizing your ROI, and with all three levers well in hand, you will see your portfolio grow.

GOBankingRates profiled self-made millionaire Daniel Meursing, CEO and founder of Premier Staff, in 2024, and alongside investing wisely, the businessman had a few other core concepts to espouse: making sure you live below, or even far below, your means; taking on a side hustle, or hustles, to drive up your investment power; and leveraging every opportunity that presents itself, never losing focus on the goal of building sustained wealth.

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This article originally appeared on GOBankingRates.com: One Generation Needs a $500K-Plus Salary To Feel Successful: Does That Track With the Economy?

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