How Does a Baby Boomer Define Financial Success?

What is financial success? The American consumer’s definition of financial success seems to be changing by year and varying by age. That’s what broker TD Ameritrade learned from a recent survey.

< Significantly, 39% of survey participants now¬†define “financial success” as being debt-free.

Another 29 percent defined “financial success” as being able to save money for long-term goals such as education and retirement.

The definition varied significantly by age. For example, 51 percent of those in the 65+ age group defined financial success as being debt-free. Only 30 percent of those in the 18-34 age group adopted that definition. My guess is that the older Americans are more likely to be debt-free when surveyed. This made it easy for them to equate that to financial success.

The younger adults are more likely to have considerable debt and therefore don’t want to use a definition that immediately brands themselves not successful. I’ll bet that many of them rate financial success as having a good credit score. That’s a sad way to look at it.

What surprised me was that there was no apparent mention of measuring financial success by net worth. That metric takes into account your level of debt but as a factor compared to your assets. Many baby boomers are still carrying mortgages but may have substantial equity and a downsizing plan to use that equity for a mortgage-free retirement. A substantial positive net worth enables this and results in a debt-free retirement. I would consider that scenario financial success.

If you were asked to define “financial success” as a survey participant, how would you answer?


  1. says

    Financial success means to me the ability to just sit in a lounge chair and have people cater to me 24/7/365. That means I have maids who clean my house, cooks who order and prepare my meals (low fat, of course) a driver to chauffeur me around, a pilot waiting in the wings (no pun intended) to whisk me off to any country or land I desire, a personal massage therapist, a personal secretary, a personal shopper, an event coordinator and a boy toy.

    I’ve been debt free for the past 10 years, have a net worth of $1million+ and I have NOT been able to ascertain any of the above. Until then, I consider myself a ……….. Well, you get the idea. Being debt free and having some money in the bank doesn’t give you (me) true financial freedom.

  2. Another Reader says

    Financial success equals financial freedom. Not necessarily the riches
    Morrison describes, but the ability to lead a satisfying life without working or worrying about money. You can have $10,000,000 in net worth, but if you require the things Morrison describes to be satisfied, then you are not a financial success. You can have a $50,000 paid for house, no debt, income from Social Security plus a small pension and be financially successful if you don’t have to work or worry about money.

    If you look at Morrison’s net worth and the assets that comprise it, I would say she has not met the test. She has two free and clear homes and some CD’s. She’s spent the last year cutting expenses to the bone, trying to find a satisfactory life on an inadequate income. Finally she gave up and went back to work. Financial success is more about income than it is about net worth. You need an adequate income to be financially successful.

    By the way, I will probably carry a mortgage on my primary residence for the rest of my life. The money leveraged out is and will continue to be invested in income-producing assets. My father used to say if you live in fire and earthquake country, it does not pay to have too much money tied up in your house. You want the bank in your corner if/when disaster strikes.

  3. says

    Another, yes: financial success is all about income. For what I want out of life now, passive income won’t give me. Sure, I can sell everything and cash out but that’s not a solution. I decided I want someone to cook and clean and cater to me and if I have to work to get it, then that’s what I’ll do. That ‘time is money’ theory didn’t quite cut it for me. People who claim that the time they accumulate vs the effort needed is worth the benefit. I didn’t find that to be so satisfactory after 10 years of early retirement. It doesn’t take me much effort now, working at a computer screen (literally) to make enough money to hire a landscaper (just hired one this weekend) and a housekeeper (she’ll be here next week) and to get back to traveling (I’m off this Tuesday to Orlando and when I return, next trip is Italy and then San Diego, CA) than earning passive income from investments and lowering my standard of living to justify expenses.

    The question here is what Baby Boomers today define as financial success? I used to think being debt free and having adequate savings would suffice. It didn’t. I found life to be very, very boring.

    It takes money to enjoy life. Don’t let anyone else tell you otherwise. The sun, stars and the moon may all be free but they sure look a lot prettier from the deck of a 40 ft yacht whilst sipping a belini from Venice, Italy.

    Live and learn.

  4. says

    That’s a great question. I guess I would say financial success is having enough money to meet your goals. Some people have more extravagant goals than I do, some have less. But it was a goal of mine to retire at 45, and since I achieved that goal, I feel successful financially.

    For those that are happy to work, it would mean earning enough for whatever goals you have. Since my goal was retirement, though, it meant wealth (net worth), as opposed to income, as you touch on in your post.

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