In the wake of a year of inflation and the ongoing malignancies of the pandemic, many Americans are feeling a bit financially strung-out. While they all acknowledge one need to fix their predicaments–more money–the exact amount differs pretty strongly depending on their generation.
According to Yahoo Finance, nearly 40% of Americans feel “financially unhealthy,” citing issues ranging from “record-breaking inflation” and other economic stressors.
This isn’t a particularly new issue, but what does stand out is the disparity between different generations’ perceptions of exactly how much money is needed to fix the problem.
The figures posed by Yahoo Finance come in two flavors – salary and savings.
When it comes to salary, Gen Z leads the pack, estimating that they will need to earn an average of $171,633 per year to be “comfortable.”
Millennial estimates are slightly more modest, figuring around $133,758 for a salary. Gen X is the last of the six-figure club at $112,222, while Baby Boomers estimate just $78,317 in required income.
Much of this disparity can be traced to the threat of volatility. We would add that the generations who saw their parents struggle through the housing crash in 2008 (Z, Millennials) may feel more apprehensive about living on thin margins. Also, how far a dollar goes today differs dramatically from past generations.
Per Paul Deer, the VP of advisory service at Personal Capital, considers this a symptom of an already expensive housing market that fluctuates, often to the detriment of younger renters’ bank accounts.
But Gen Z participants believed they would need the least amount saved of the four groups, clocking in at just $105,299 in comparison to Baby Boomers’ whopping $764,999. Millennials and Gen X brought up the middle of the group, positing that they would need to have $349,784 and $566,975 saved respectively.
Deer also attributes this reversal to the housing market, but says that putting money away should actually be a priority for younger Americans, citing a “stronger need to be able to build a nest egg” in the absence of fully stocked savings.
Ultimately, experts recommend “avoiding high-interest debt and saving a meaningful percentage of your income” as the best way to combat financial maladies, namely focusing on credit card debt and lowering credit usage wherever possible. They also recommend both newly investing and holding onto current investments if possible as a way to outlast inflation.