Gen Z is a conspicuous outlier on what it takes to live comfortably and feel financially secure

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Americans on average say they need to earn more than $186,000 a year to live comfortably, according to a recent Bankrate survey, down 20% from a year ago.

Different demographic groups had different income thresholds, but they all declined—except for one. Gen Z respondents said they need to make $200,000 a year to feel comfortable or financially secure, up 3.6% from Bankrate’s 2023 survey.

Meanwhile, every other age group lowered their income thresholds. And when looking across different gender and racial/ethnic groups as well as Americans with kids or without, income thresholds also fell (with Gen Z and the other age cohorts included in those groups too).

Gen Z was also an outlier on what it would take to feel rich. On average, Americans said they need to earn $520,000 a year to reach that status, up 7.7% from a year earlier.

Income thresholds for most demographic groups saw comparable single-digit percentage increases, while Gen X’s saw a slight dip. But Gen Z’s was up a whopping 20.7% to $461,000.

The changes in what Americans think they need to earn to come as they also report feeling more financial insecurity. In fact, while the level of income for living comfortably dropped, it’s still more than double the average full-time income of $79,000.

The latest Bankrate survey said 25% say they are completely financially secure, down from 28% in 2023, while 75% were not completely financially secure, up from 72% in 2023.

“Many Americans are stuck somewhere between continued sticker shock from elevated prices, a lack of income gains and a feeling that their hopes and dreams are out of touch with their financial capabilities,” said Mark Hamrick, Bankrate’s senior economic analyst, in the report.

The share of Gen Z respondents who felt financially secure saw a dip to 24% from 25%. But they were the most optimistic of the different age groups, with 64% saying they are not completely secure now but will be someday. That compares with 53% for millennials, 48% for Gen X, and 26% for baby boomers.

That’s despite the rising cost of living, heavy debt burdens, and the historically unaffordable U.S. housing market that now requires a six-figure income to afford a median-priced home.

Meanwhile, separate surveys have found that Gen Z and millennials are increasingly suffering from “money dysmorphia” that has skewed how they view themselves financially.

According to an Intuit Credit Karma survey in January, 45% of Gen Zers and millennials are obsessed with the idea of being rich, with 48% of Gen Zers and 59% of millennials feeling behind financially.  

“Money dysmorphia is kind of like today’s version of keeping up with the Joneses,” Courtney Alev, a consumer financial advocate at Credit Karma, wrote in the report. “A lot of people are examining their finances and comparing themselves to their peers, people on social media, and even celebrities, which is bringing up feelings of inadequacy.” 

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