Here's the average salary each generation says it needs to feel 'financially healthy.' Gen Z requires a whopping $171K/year — what salary do you need to feel secure?

Serah Louis
·5 min read
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The global COVID-19 pandemic is largely behind us, but another “health” crisis has been plaguing the U.S.

Almost 4 in 10 Americans say they feel “financially unhealthy,” as prices remain high after a year of record-breaking inflation. However, how much you think you need to get financially well may depend more on what year you were born than how much is sitting in your bank account.

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Gen Z says they require an average salary of $171,633 to feel financially healthy — the highest income compared to older generations — according to a 2022 survey from personal finance company Personal Capital and retirement plan provider Empower, conducted by The Harris Poll.

But even while 51% of the global Gen Z population say they live paycheck to paycheck and list cost of living as a top financial concern, according to a 2023 survery from Deloitte, experts have said not to lose hope.

“In a choppy market, there are plenty of opportunities to take control of your money,” said Craig Birk, chief investment officer at Personal Capital. “Knowing your net worth puts you in the driver’s seat because you need a real-time measure of your financial health to make smart moves.”

How much each generation needs to feel ‘financially healthy’

Here’s how much each generation says they need to earn to feel comfortable:

  • Gen Z: $171,633

  • Millennials: $133,758

  • Gen X: $112,222

  • Baby boomers: $78,317

However, when it comes to how much savings these generations believe they need stashed away, the numbers drastically differ.

  • Gen Z: $105,299

  • Millennials: $349,784

  • Gen X: $566,975

  • Baby boomers: $764,999

Although Gen Z has the highest salary expectations to be financially healthy, they have the lowest expectations when it comes to how much they need in savings — and vice versa for boomers.

Paul Deer, vice president of advisory service at Personal Capital, theorized to CNBC that this might be connected to the housing market. Younger generations may feel they need a higher income to afford expensive mortgage rates and to plan for their retirement.

“Lower savings for younger generations basically means you have a stronger need to be able to build a nest egg,” Deer said.

Read more: Here's how much the average American 60-year-old holds in retirement savings — how does your nest egg compare?

Deal with the immediate first

Even if you can’t hit the salary mark you need just yet, you still have options when it comes to maximizing your income and bolstering your savings.

“Yeah, making more money is great, but it’s what you do with your earnings that makes the real difference,” says Lacey Cobb, director of advice solutions at Personal Capital.

“Regardless of the number on your paycheck, avoiding high-interest debt and saving a meaningful percentage of your income can put you in a better spot in the long run.”

One of the first steps toward financial wellness is to deal with your debt — especially those with the highest interest rates. Thanks to exorbitant consumer prices, Americans are increasingly relying on their credit cards and household debt is soaring.

But with credit card interest rates spiking to record highs in response to the federal funds rate, now's not the time to let your monthly payments slide. Make sure you’re doing your best to pay them off in full and on time.

Then plan for the future

Once you’ve got your debt under control, make sure you’re tucking some savings aside as well. The Personal Capital survey found that 58% of Americans are putting away more into their short-term savings and retirement savings. But if the pandemic taught us anything, it's incredibly important that you’ve got some emergency funds in place for an unexpected expense.

And with many predicting they’ll need $1.25 million in savings to retire comfortably, you’ll want to start preparing for your financial future immediately.

While investor sentiment may be see-sawing right now, Birk advises against panic selling your investments.

“Stocks can be a secret weapon because they offer you one of the best chances to mitigate the impact of inflation and, in the long run, you’re well-positioned to beat it several times over.”

Consider building a well-diversified portfolio with sectors that traditionally perform well throughout economic cycles, like consumer staples and utilities.

With a little focus and some hard work, before long you’ll be feeling financially strong again.

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This article provides information only and should not be construed as advice. It is provided without warranty of any kind.