Millennials and Gen Z agree on the definition of financial success; and it’s not being rich


  • According to a recent Merrill Lynch Wealth Management report only 19% of US millennials and Gen Z define financial success as being rich; most define it as being debt-free.
  • It found that early-adult households collectively hold nearly $2 trillion of debt, mainly credit-card and student-loan debt.
  • Student-loan debt has caused them to delay homeownership and parenthood and put them behind in retirement savings.


Whilst some might equate financial success with how rich they are, that’s not the case with most millennials and Gen Z; the survey of more than 2,700 Americans ages 18 to 34, found only 19% of respondents defined financial success as being rich, with 60% defining it as being debt-free.

‘Freedom from debt seems a low bar of accomplishment, yet it’s an elusive goal for many early adults,’ the report said.

It found 81% of early-adult households carry a collective debt of nearly $2 trillion, including car loans and mortgages but predominantly student-loan and credit-card debt. Those who carry the latter have an average balance of $3,700, and more than half said they’re struggling to pay it off.

Freedom from debt seems a low bar of accomplishment, yet it’s an elusive goal for many early adults

Student-loan debt has reached record levels as college tuition has more than doubled since the 1980s; consequently, the national student-debt total is more than $1.5 trillion, with the average student-loan debt per graduating student in 2018 of $29,800, according to Student Loan Hero.

The financial repercussions of this are hitting hard, with 36% of college graduates paying off loans telling the survey that the debt wasn’t worth it; another survey for Insider Business agreed, finding nearly half of indebted millennial respondents saying college wasn’t worth taking out student loans.

‘Student debt is having major ripple effects on early adults’ futures, financially and personally,’ the report said. ‘Four-hundred-thousand early adults who would have purchased a home a decade ago have not been able to afford one due to student debt, and today’s early adults take finances into greater consideration in deciding whether and when to have a child than those in past generations. The ripple even reaches retirement years — indebted graduates are contributing only about half the amount to their 401(k)s compared to those without debt.’

Retirement is a particular problem for older millennials, who entered the workforce during the global financial crisis; a tough job market and wage stagnation made it increasingly difficult to pay off student-loan debt.

Consequently, they weren’t able to accumulate the amount of wealth they hoped to, with the survey concluding: ‘Older millennials are often realizing they’re going to have to play catch-up with their finances if they want to ever be able to retire, but some of them have already decided that they likely will not ever be able to afford to retire.’

Overall, the feeling was that the rising cost of college has made a degree less advantageous than it was 10 years ago, although the report said that a bachelor’s degree is still estimated to help the average person add $1 million to their lifetime earnings – the question is, how much of that money will be spent paying off the debt that helped them obtain the degree.


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