Boomers Vs. Younger Generations: How Much Money Does It Take to Feel Wealthy?
There’s a big difference in how different generations see wealth and financial security. With rising prices and inflation, many Americans are finding it hard to make ends meet. More than twice as many people feel financially insecure compared to those who feel comfortable. But what does having “enough” money really mean? Surprisingly, this idea depends more on age than on how much money someone actually has.
Younger generations face a challenging housing market, which influences their financial expectations. We’ll explore this issue and other factors contributing to the generational divide in financial security.
Financial Freedom
According to a recent Bankrate survey, Americans believe they would need to earn $483,000 to attain financial freedom. This amount is 8x higher than the national median income of approximately $57,200, as reported by Labor Department data.
Feel Rich?
Millennials feel they would need to make an average of $444,000 to feel rich, while Gen X says the threshold is $575,000. Boomers set $521,000 as the income needed to feel rich.
Generation Z Salary
Generation Z has ambitious aspirations. They say they need an average annual income of $171,633 to feel financially secure, the highest among all generations. Gen Z’s happiness threshold is around $128,000.
Gen Z Savings
Gen Z’s desired savings amount is relatively modest, set at $105,299. Perhaps their focus lies on immediate financial stability rather than long-term strategies. Gen Z’s lower savings target may stem from housing market challenges, where high mortgage rates demand higher incomes.
Millennial Salary
Millennials Striving for BalanceMillennials seek an average annual income of $133,758 for financial security. Only 28 percent of millennials say they feel financially comfortable.
Millennial Savings
Their savings goal is pretty ambitious: They aim for an average of $349,784. Most groups say not having enough savings is the reason they don’t feel financially secure, but 44 percent of financially insecure millennials blame low pay and not enough upward mobility in their jobs.
Gen X Salary
Gen Xers consider an average annual income of $112,222 sufficient for financial security. Gen X was more likely than any other group to blame inflation for financial insecurity (68 percent).
Gen X Savings
Generation X seems to be pragmatic planners. They prioritize building savings, aiming for an average of $566,975. They obviously know the value of a good nest egg.
Boomer Salary
Baby Boomers The Content Realists Baby boomers feel financially secure with an average annual income of $78,317. 66 percent of baby boomers say inflation is the main obstacle on the road to financial security.
Boomer Savings
Their focus shifts to retirement security, as they aim for an average of $764,999 in savings. They’ve had to deal with multiple economic downturns, which is probably why they seem to prioritize stability. 35 percent of them say they’re not financially secure and never will be.
Happiness And Income
On average, Americans need almost $285,000 annually to feel happy. Gen Z’s happiness threshold is around $128,000, while millennials aim for over $525,000.
Income Impact
According to Bankrate, people who earn higher incomes tend to set higher targets for achieving financial freedom. For instance, someone currently earning less than $100,000 a year might feel rich with a $500,000 salary, while those already making six figures say they’d need at least $600,000 annually.
Location Impact
People residing in the Western and Northeastern parts of the U.S. were a tad more inclined than their counterparts in the South and Midwest to state they’d require $1 million or more to feel rich. A study from SmartAsset found that a $250,000 salary is more valuable in the South than in the West and Northeast.
Average Amount Of Money Baby Boomers Saved Last Year And Tips To Save More
Average Amount Of Money Baby Boomers Saved Last Year And Tips To Save More
