Gen Z is wealthier than previous generations but increasingly anxious about money

Generation Z is entering adulthood with higher income and wealth than some previous generations had at comparable ages, yet many young Americans remain deeply concerned about their financial future. From homeownership to retirement planning, the gap between financial indicators and personal confidence is becoming an increasingly important feature of the generational debate.

A report by Boston Consulting Group’s Center for Macroeconomics, titled The Kids Are Alright: The Perennial Panic About Young People and Money, challenges the widespread perception that younger generations are necessarily worse off financially than their predecessors. Its analysis suggests that, when compared at similar ages, Gen Z has benefited from improvements in income and wealth, although these averages do not reflect the circumstances of every individual.

Gen Z generally refers to people born between 1997 and 2012. According to figures cited in the report, Americans aged 28 earn an average income of approximately $42,000, around 25% more than millennials earned at the same age and roughly 50% above the comparable income recorded for baby boomers. Wealth comparisons are more complicated because most Gen Z adults have not yet reached the stages of life when assets typically accumulate most rapidly.

The report also points to differences in net worth across generations. At age 34, millennials held an average net worth of approximately $331,000, compared with $251,000 for Generation X and $229,000 for baby boomers at the same age, according to the figures presented. These comparisons suggest that financial progress cannot be assessed simply by looking at current living costs or comparing younger adults with older households at different stages of life.

Despite these indicators, younger Americans have become increasingly pessimistic about their economic prospects. Boston Consulting Group chief global economist Philip Carlson-Szlezak links part of this anxiety to the social and technological environment in which Gen Z has grown up, particularly the widespread use of smartphones and social media.

Online platforms frequently showcase luxury purchases, expensive homes and seemingly rapid paths to success, often without providing the financial context behind these lifestyles. Constant exposure to such images can raise expectations and make ordinary financial progress feel inadequate, even for people earning relatively competitive salaries.

Retirement is another source of uncertainty. A survey conducted by SoFi and YouGov among 4,090 adults found that 62% of Gen Z and millennial respondents wanted to retire comfortably, but only 46% believed they would achieve that goal. The difference highlights how aspirations and confidence can diverge even when younger people are actively thinking about long-term financial security.

Expectations surrounding income may further widen that gap. In a 2024 survey by Empower, Gen Z respondents estimated that an annual income of around $600,000 was necessary to feel financially successful. That figure is far above the approximately $60,000 median annual earnings cited for full-time workers, illustrating how perceptions of success can become disconnected from typical labour-market outcomes.

Nevertheless, younger adults also demonstrate a strong appetite for entrepreneurship and investment. The source report indicates that 77% of Gen Z respondents believed they could start a business, compared with 58% among older generations. It also found that 26% of Gen Z respondents had invested in cryptocurrencies, against 6% of baby boomers.

Greater participation in equities and other investments can offer opportunities to build wealth over time, but it also exposes young investors to market volatility and potential losses. Long-term returns are uncertain, and investment decisions need to reflect individual financial circumstances, risk tolerance and time horizons.

Housing remains one of the clearest obstacles to financial independence. In the United States, purchasing a median-priced home now requires roughly six years of median income, compared with about three and a half years in 1975. Boston Consulting Group notes that newly built median homes are approximately 50% larger than their historical counterparts, meaning that part of the increase in cost reflects changes in housing size. However, this does not eliminate affordability pressures, particularly in urban areas where demand for housing often exceeds new supply.

Location also matters. Many young adults live in cities and surrounding metropolitan areas for employment, education and social opportunities, where housing can be particularly expensive. Their preferences may change as they grow older, form families or seek more space, potentially improving homeownership prospects later in life. Even so, the initial cost of buying a property can delay financial independence and make saving for retirement more difficult.

The report also cautions against assuming that economic gains have benefited only the wealthiest households. Since 2020, wages among workers in the lowest quarter of the income distribution have grown faster than those of higher earners in most years, while wealth gains have been relatively similar across income groups, according to the analysis. These broad trends, however, do not erase differences in access to housing, savings, employment opportunities or family support.

Comparisons between generations also require context. Baby boomers experienced different economic conditions, including rising female labour-force participation and the growing prevalence of two-income households. Younger generations face their own challenges, including housing costs, uncertainty over future retirement benefits and changing labour-market conditions. Neither experience can be fully understood through a single income or wealth figure.

Ultimately, Gen Z’s financial anxiety cannot be explained solely by a lack of economic progress. The data suggest that some young adults are doing better financially than earlier generations did at comparable ages, while concerns about affordability and long-term security remain real. Rising expectations, digital comparisons and uncertainty about major life milestones may also shape how they assess their prospects.

For young adults, building financial stability involves more than pursuing a higher salary. Managing expenses, maintaining emergency savings, making informed investment decisions and setting realistic long-term goals can help turn financial ambition into a more secure future. For policymakers, housing affordability and access to economic opportunity remain central to ensuring that improvements in average income translate into tangible benefits for younger households.