Feeling financially secure is a goal that many aspire to, but getting there is likely to be a challenge for most according to a new survey.
That’s because while the average earned by a full-time American worker in 2022 was a little more than $79,000, respondents to the survey in May 2024 said that financial security would require more than double that.
The Bankrate.com research found that the magic number to feel financially secure is $186,000. The amount required increases among younger generations with Gen Zs stating the largest required income at $200K.
Meanwhile, to feel rich or financially free, annual income would need to exceed half a million dollars ($520K, up from $483K in 2023) including 23% who think they would need $1 million or more. Unlike the previous figures, the amount required increased with age.
While three quarters of participants in the research said they are not currently completely financially secure, 45% think they will get there someday while 30% do not. The pessimistic cohort has a larger share of older respondents, feeling that they have left it too late perhaps. Overall, Gen Xers are least likely to say they are currently financially secure at 15%, compared to 24% of Gen Zs, 26% of millennials, and 32% of baby boomers.
Both higher earners and younger generations are more optimistic they will one day earn the annual income necessary to feel financially secure/comfortable. Nearly half of those earning more than $100,000 annually (49%) feel this way compared to 34% of those earning under $50,000 per year.
“Making more money is the secret to weathering inflation, but it’s also true that being a higher-income earner won’t automatically translate to being better at personal finance,” said Bankrate analyst Sarah Foster. “Someone with a traditional middle-class salary who always tries to save for the future, no matter how small, is destined for financial success more than an ultra- wealthy earner who lives and spends beyond his or her means.”
The firm recently discovered that many Americans have inadequate emergency savings.
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