Gen Z seeks $9.5 million for financial security after seeing parents ‘unretire’

In today’s turbulent economic climate, the dream of financial security feels increasingly out of reach for many young adults. Faced with inflation, skyrocketing housing prices, and widening wealth disparities, Gen Z is redefining what it means to be financially successful.

This generation believes they will need nearly double the net worth that their Gen X counterparts estimate to feel secure in the long term.

The growing financial divide between generations

According to a recent survey by Empower featured in a Fortune article, Gen Zers estimate they will need a net worth of $9.47 million to feel financially successful. This is compared to just $5.3 million for Gen X. This stark contrast highlights the growing financial concerns among younger generations. Rebecca Rickert, head of communications at Empower, explains that Gen Z is calculating the rising costs of living and economic volatility and betting on the need for more money to ensure their financial future.

The net worth target for millennials is $5.64 million, while boomers consider $1.05 million sufficient for a comfortable retirement. The ideal annual salary follows a similar trajectory: Gen Z envisions a salary of $587,797, compared to $212,321 for Gen X and $99,874 for baby boomers.

Struggles create uncertainty for Gen Z

The financial anxiety felt by younger generations is not unfounded. Growing up amid major economic disruptions, such as the 2008 financial crisis and the COVID-19 pandemic, Gen Z has witnessed some of the highest inflation rates in decades, increasing student loan debt, and a daunting housing market. These factors contribute to the economic precariousness that has defined their adult lives.

For this generation, achieving traditional life milestones like homeownership, having children, and saving for retirement seem increasingly elusive.

The struggles of Gen X — a cautionary tale for Gen Z

Interestingly, Gen Xers—many now nearing retirement—are also grappling with financial insecurity. Despite believing they need around $5.3 million to retire comfortably, many struggle to save enough, especially as they face longer life expectancies and the erosion of traditional pension plans. This reality has prompted many Gen Xers to either delay retirement or re-enter the workforce after retiring, with 44% believing it will take a “miracle” to retire securely.

This financial uncertainty is not lost on Gen Z, who see the struggles of their older peers and are preparing for the same challenges. Rickert points out that Gen Z’s heightened financial concerns are shaping their career choices, with many seeking higher-paying jobs to compensate for their economic pressures.

Optimism amid financial uncertainty

Despite these financial challenges, younger generations remain optimistic about their future success. The survey found that 71% of Gen Zers are confident they will achieve their financial goals in their lifetime, compared to 70% of millennials, 53% of Gen Xers, and just 45% of baby boomers. While the path to financial comfort may appear more challenging than ever, Gen Z’s resilience and determination offer hope in an otherwise uncertain economic landscape.