In today's economic landscape, many individuals find themselves in a perplexing situation: earning a six-figure salary but still living paycheck to paycheck. This phenomenon is encapsulated by the acronym HENRY, which stands for High Earners, Not Rich Yet. Coined by Shawn Tully of Fortune, the term highlights the financial struggles faced by a unique subset of the population, particularly as Gen Z approaches their 30s.
As inflation continues to impact the economy, younger Americans increasingly believe that they need to earn more to achieve financial stability. A recent 2024 Bankrate survey revealed that members of Gen Z feel they need to earn at least $200,000 a year to feel financially secure. This need for higher income is compounded by a phenomenon known as money dysmorphia, where individuals have an unrealistic perception of their financial health. This often leads to stress over money, largely fueled by social comparisons and outdated perceptions of what is considered affordable.
Interestingly, many middle-income Americans are beginning to live more like their lower-income counterparts. This shift indicates that, for individuals to feel truly middle-class, they often require high earnings. To better understand who among Gen Z qualifies as a HENRY, we analyzed microdata from the Census Bureau’s Current Population Survey for the 2024 Annual Social and Economic Supplement. Our focus was on adult Gen Zers earning a total income of $250,000 or more.
Our findings revealed that the average income for Gen Z HENRYs was just above $565,000 a year, significantly higher than the approximately $28,700 earned by the average Gen Z individual represented in the data. The demographic of Gen Z HENRYs skews slightly more male, with an average age of around 24 years old in 2024. Notably, they are more likely to be married compared to their broader Gen Z peers, with an impressive 0% divorce rate among this group.
Demographically, Gen Z HENRYs are less likely to be white than their Gen Z counterparts, with a greater representation of individuals identifying as Asian or Pacific Islander. Education plays a crucial role in their earnings potential, as HENRYs are more likely to possess a bachelor's degree or higher. This educational attainment contributes to their wage premium and financial success.
Interestingly, many Gen Z HENRYs exhibit an entrepreneurial spirit, with a higher likelihood of being self-employed compared to the rest of Gen Z. However, the majority still hold wage or salary roles in the private sector. When it comes to homeownership, only 40% of HENRYs own homes, compared to around 53% of all Gen Zers. This trend suggests that HENRYs are more likely to rent, although those who do own homes tend to occupy properties with a higher estimated value, averaging around $455,000 versus $441,000 for the general Gen Z population.
This trend towards renting among high-earning young Americans reflects a larger shift in attitudes towards homeownership. For many, renting has become a more financially sound decision than purchasing a home, offering flexibility and access to desirable amenities. As the landscape continues to evolve, understanding the financial realities faced by Gen Z HENRYs can provide valuable insights into the future of wealth and stability in America.
