The term HENRY (High Earners Not Rich Yet) refers to individuals who have the potential to become wealthy in the future because of their income. These individuals or families earn between $250,000 and $500,000 per year and are between 25 and 45 years of age (Gen Z, Millennials, and Gen X). Despite their income, after paying their living costs, taxes, and other expenditures, HENRYs have little left over to save and invest for their retirement.
HENRYs are a demographic that politicians consider being ‘rich,’ referring to them as the wealthiest Americans during the 2008 elections. However, there’s more to the HENRY story. ‘Rich’ is when you have assets in savings, retirement accounts, and other income-producing investments, not the material things that you own and not things you owe on. HENRYs are the ‘working rich’ because most of what they make is immediately spent, unlike the wealthiest 1% of Americans who continuously work to build their assets.
Part of the plight of HENRYs is that their wealth projects from their six-figure income, not their spending habits or the building of wealth through investing. Additionally, HENRYs tend to want to keep up their appearance of success by spending. They are easily targeted by advertisements showing the lavish lifestyle they desire, and they frequently spend on those items.
According to research by MoneyinMotion, the top industries employing HENRYs include banking and finance (including insurance), technology, and large retailers generally holding manager or VP titles. Their top purchases include:
- Diet, weight loss, exercise memberships
- Boating and sailing
- Online shopping
While HENRYs have the potential to be wealthy, many will not fare well in retirement due to their lack of retirement assets. If you are a HENRY, you still have the potential to save enough for retirement. However, those that continue the same spending habits with little priority on retirement savings during the earning years will not yield the retirement they desire. If you need financial guidance to change your current spending or accumulate retirement assets, feel free to contact our office at any time.