Young Americans think they need $600,000/year to be ‘financially successful’ — and Boomers only think they need $100,000. Which group is right?

Gen Z or Zoomers — born between 1997 and 2012 — estimate that the average salary for success is a shocking $587,797 yearly. With the median salary at $60,580 in the third quarter of 2024, it's not surprising that investor John Pompliano alleges Zoomers have "lost their minds".

Still, there are good reasons for younger Americans to think it takes half a million dollars to live the good life. So, why is the gap so large, and who is correct about how much money equals success? Here's what you need to know.

Why do young people think financial success costs so much?

While some Boomers blame social media for Gen Z's unrealistic estimation of success, the reality is that life has become more expensive — especially during Gen Z's formative years.

In 2020, a household with an annual income of $59,000 could afford a typical U.S. home, according to Zillow. That was below the median income of $66,000. By 2024, however, an income of $106,500 became necessary to afford a house comfortably. That becomes problematic when the average household income is $81,000.

The cost of living is not limited to housing either. For that, let's look at the trappings of a middle-class family with a house, two cars and two kids:

• Median monthly mortgage payments are $2,209.
• The average monthly payment for a new car is $734 per vehicle
• The average monthly cost of child care is $1,284 per kid.

For these three expenses alone, you'd be looking at $4,961. Then you have taxes, insurance, utilities, retirement savings, food, kids' activities, entertainment, student loan payments and, to a lesser extent, vacations to think about. That's just the typical middle-class, no-frills lifestyle.

On the other hand, boomers could afford a college degree without debt before the cost rose by 303%. Homes were more affordable for them too, with less than half of Boomers needing two incomes to become homeowners.

Do you need $600K to be a financial success?

While Zoomers are right that $100K isn't going to cut it if someone wants to be financially secure, let alone successful, they went a little too far with their estimate. The Census Bureau revealed that households in the top quintile had an income of $165,300 in 2023 while the top 5% of households earned $316,100.

Earning somewhere within this range would certainly provide you with a solid lifestyle. Earning $165,300 annually over a 30-year career would be more than enough to afford the American Dream, which Visual Capitalist estimates at $4,442,050 based on retirement, cars, a wedding, two kids, pets, annual vacations, house and affording your own funeral.

Of course, success is in the eye of the beholder and some people may find they can live comfortably on less. Still, even frugal Americans will find things simply cost more now — so working on increasing income and taking steps to manage money wisely will be important goals for younger generations.