How much money does it take to be financially successful? Depends on who you ask
FILE - Photo taken on Nov 24, 2024, shows US dollar banknotes. (Photo credit should read CFOTO/Future Publishing via Getty Images)
How much money does it take to be financially successful? The answer depends on which generation you’re asking.
New research published on Sunday by financial services company Empower found that the average salary considered "successful" is $270,000 per year – and $5.3 million in overall net worth. The study is based on survey responses from more than 2,000 American adults.
When analyzing these responses by generation, there were some disparities.
Boomers, or those born between 1946 and 1964, believe you need to earn $99,874 a year to be considered financially successful. The youngest generation in the survey, Gen Z – born between 1995 and 2012 – believes that number is $587,797.
Millennials born between 1980 and 1994 think you need to earn $180,165, and Gen Xers born between 1965 and 1979 believe you need $212,321 a year.
Boomers and Gen Z might not be that far apart, based on inflation
While Boomers and Gen Z seem quite far apart when it comes to annual income and financial success, technically, they might not be that far off based on inflation data.
Earning $99,874 in 1974, when Baby Boomers were between 28 and 48 years old, is equivalent to about $677,000 today, according to the Consumer Price Index (CPI) calculator, which is published and updated monthly by the Bureau of Labor Statistics.
What is the best pathway to financial success?
Overall, most Americans (58%) believe that they will achieve financial success in their lifetime, according to the survey. The younger generations were found to be the most optimistic (Gen Z 71%, Millennials 70%, Gen X 53% and Baby Boomers 45%).
Those in the survey said that the surest path to success is a well-paying job (51%), saving as much as possible and the power of compounding (46%), and making smart investment decisions (46%). Another 36% said it takes financial education.
Some 52% said another secret to success is never spending more money than you make (52%).