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📌 Here’s what you’ll learn:
Key takeaways
- In a survey conducted by Empower, participants measured financial success with an average annual salary of $270,000 and a net worth of $5.36 million.
- Younger generations have higher requirements for what they consider financial success.
- Some barriers to success include overspending, debt, frugality, and lack of financial knowledge.
Can you measure financial success? Many Americans say they can. According to a survey by financial services company Empower, the average person’s idea of financial success is a salary of about $270,000, or a net worth of $5.36 million.
Financial experts say these expectations are reasonable and can help you achieve some degree of financial independence. But it depends on certain factors, including where you live, your current lifestyle, and what you want to do with your money.
Measuring success: generational differences
The Empower survey, called “The Secret to Success,” surveyed 2,203 people over the age of 18 across the United States. The results were adjusted to reflect the country’s adult population.
“Younger generations are reshaping what success looks like,” Rebecca Rickert, head of communications and consumer insights at Empower, said in an email to Investopedia. “It is not surprising that personal progress is measured socially as much as financially.”
Younger Americans have a higher chance of achieving financial success. Generation Z measured it with an average salary of $587,797 and a net worth of about $9.47 million, while Millennials set the standard with an average salary of $180,865 and a net worth of about $5.64 million.
Certified financial planner John Bell says these expectations are realistic. But achieving real success with salaries of this size depends on your personal situation (for example, if you are part of a two-income family with children) and your location.
“In more expensive areas, if you’re making $200,000 to $250,000, you could say $270,000 is something you can barely live on because you have kids in private school, and a big million-dollar house with a big mortgage,” he says. “But for most of the country, aside from the very high cost of living, that ($270,000) would certainly be a great starting point.”
Note
Salary expectations for Generation X and baby boomers surveyed were $212,321 and $99,874. Gen
Is money the key to happiness?
Money is not necessarily the main driver of what leads people to success. According to the survey, most people measured success with happiness (59%) compared to 27% of people who cited wealth.
“I think the two (happiness and wealth) are interconnected,” says Patrick Huey, who has worked in the financial industry for 20 years. “But I think there’s a certain point where having enough is enough. It doesn’t mean you’re happy, you’re satisfied.”
Both Huey, owner and principal advisor of Independent Victory Planning, and Bill, a financial planner, say people’s attitudes toward money have changed over the decades.
“People look at their parents and say, ‘Mom and Dad worked until they were 65 or 67, and they had so little time to enjoy retirement. I don’t want to be me. I’d rather work on my own terms,'” Bill says. “Money becomes a tool to get there, but it is not the destination.”
Note
Of those who responded to the Empower survey, 35% said they felt physical well-being was the key to financial success, while 35% believed free time to do the things you wanted helped achieve success.
What holds people back?
The table below highlights some of the most common obstacles that people believe are holding them back from financial success:
| Excessive spending and lack of budget | 37% |
| religion | 36% |
| No savings | 35% |
| economy | 35% |
| Income instability | 30% |
| Not setting clear financial goals | 28% |
| Procrastinate or delay financial planning | 26% |
| Lack of financial knowledge | 20% |
Even with such bleak obstacles, 58% of Americans said they felt optimistic about financial prosperity during their lifetime. Younger generations said they felt more optimistic, with 71% of Gen Z and 70% of Millennials feeling more confident compared to just 53% of Gen X and 45% of Baby Boomers.
“Success is also based on stability. For Gen Z and Millennials, this means the ability to manage student debt, afford the rent or mortgage, and build a safety net,” Rickert said. “People are facing higher costs of living, economic volatility, housing headwinds — so the bar isn’t higher, it’s just different. It’s more about financial flexibility.”
Planning is key
Overcoming obstacles to financial success can be as simple as sitting down and making a financial plan, especially if you have specific goals like paying bills on time, owning a home, or retiring by a certain age.
“I’m always a big fan of sitting down and writing out a plan,” Huey says. “If you’re feeling lost, and feel like you can’t think of what it will take, this planning process is a great place to start.”
He also stresses reviewing your plan twice a year, and advises clients to tell him before making big financial decisions, such as taking an expensive trip or making a large purchase. This allows them to ensure that there is no long-term impact on their financial plan.
Setting your short-term goals is just as important as making your long-term plans. But be prepared to make some sacrifices along the way, Bell says.
“Anyone can retire if they plan properly,” he says. “But maybe you’ll retire later. Maybe you won’t live in the same house you grew up in. There are trade-offs. You just have to be willing to compromise on some things or adjust your expectations for retirement to be honest.”
Bottom line
The definition of financial success can be very subjective. The Empower survey sheds some light on how people feel about it and what they need to get there. Although many Americans believe that a high salary and net worth are crucial to prosperity, survey respondents also feel that a high-paying, risky job is equally important.
If you find yourself confused about where to go financially, speaking with an expert can help you overcome your obstacles and put you on the path to success.
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