A recent study by Empower has highlighted a significant generational gap in perceptions of financial success between Generation Z (Gen Z) and Baby Boomers. According to the study, a majority of Americans—52%—believe there is a “secret” to financial success, with the average income deemed successful positioned at $270,000 annually and a net worth of $5.3 million. However, the expectations diverged sharply along generational lines: Gen Z measures financial success by an ambitious annual salary of $587,797, while Boomers are more conservative, expecting a much lower figure of $99,874. This disparity underscores a broader conversation about differing aspirations and economic realities faced by these two groups.
The study also identified several significant barriers to achieving financial success, as perceived by the respondents. More than a third of participants cited economic conditions (35%) and income instability—characterized by irregular income streams (30%)—as key obstacles. Additionally, a lack of financial literacy (20%) and unclear financial goals (28%) were noted as impediments. Procrastination in financial planning (26%) further complicates matters, suggesting a hesitation to take the necessary steps towards better financial management. Participants also identified savings challenges (35%), overspending and inadequate budgeting (37%), and debt (36%) as critical deterrents to achieving their financial goals.
The survey conducted by Empower is based on responses from a representative sample of 2,203 Americans aged 18 and older, gathered by Morning Consult in September 2024. This study adds to a growing body of literature illustrating the financial struggles faced by many Americans. A November 2023 report suggested that a majority of U.S. adults were living paycheck to paycheck, a situation exacerbated by economic factors during the Biden administration, as reported by Breitbart News. This suggests that ongoing economic challenges are affecting financial stability across various demographics in the United States.
In December, a report from Harvard’s Joint Center for Housing Studies illustrated the housing crisis facing low-income families, revealing that roughly two-thirds of households in the lowest income bracket devoted more than half their earnings to rent and utility payments. This financial strain raises questions about the effectiveness of the current administration’s economic policies, specifically the “Bidenomics” approach, which aims to stimulate growth from the middle class and lower-income brackets. Critics argue that the challenges facing these demographics indicate that such strategies may not be yielding the intended positive outcomes.
The financial predicaments of Gen Z are particularly concerning. Research conducted in May revealed that this younger generation struggles with lower incomes and higher debt-to-income ratios compared to Millennials at a similar age. The economic landscape—marked by rising interest rates and inflation—has compounded the financial difficulties for many Gen Z adults, leading to an increase in credit card debt. This burden not only affects their present financial situation but could also have long-term implications on their ability to build wealth and secure financial independence.
In summary, the Empower study reflects not just the differing views of financial success between Gen Z and Boomers, but also highlights the underlying economic challenges that hinder individuals from achieving their financial goals. As the financial landscape continues to evolve, addressing the perceived barriers to financial success—along with the consequences of economic policies and changing market conditions—will be crucial for fostering a path toward greater financial stability for future generations.
