Americans have a specific figure in mind for what it would cost to be financially secure, according to a new survey from Bankrate. That magic number? $186,000 in annual income.
Currently, only 6% of American adults earn that amount or more, according to Bankrate. The median household income ranges from $51,500 to $86,000, according to the latest federal data.
Achieving a sense of financial security means paying all your bills and buying some of the things you need while still having enough left over to save for the future, according to the personal finance website. But many inflation-weary consumers are experiencing increasing financial stress. A new survey from the Federal Reserve Bank of Philadelphia found that 35% of Americans are worried about making ends meet, up from 29% a year earlier.
That gap between what the average American earns now and what he or she wants to earn means that Americans have their eyes on this high income and think they need to earn more money, even though they know it’s unrealistic that they’ll never earn that amount. will earn. Sarah Foster, an analyst at Bankrate, told CBS MoneyWatch.
Earning more remains at the top of many Americans’ priorities as the cost of housing, food and medical care remains stubbornly high after two years of rising inflation. To cope, consumers are cutting back on spending on dining out, entertainment and travel, according to a TransUnion survey.
A Bankrate survey of 2,400 Americans conducted in mid-May found that younger generations are more optimistic that they will eventually earn enough to live comfortably.
What does it take to be rich?
Americans have an even higher standard for feeling wealthy. The survey found that they believe they need to earn $520,000 a year to qualify as wealthy — up from their response of $483,000 in the same survey last year.
The rising cost of consumer goods is a major reason for the increase, Foster said. “Inflation is the center of this story,” Foster said. “Americans know where the bar is when it comes to living comfortably, but every time they get there, the cost of living goes up and the bar gets further and further away.”
Another recent report found that adults in major U.S. cities earn $96,500 $235,000 (before taxes) annually to meet basic needs and save, while a family with two parents and two children needs a total of $235,000 to live comfortably.
Interesting enough, Research 2023 from the late Nobel Prize-winning economist Daniel Kahneman and colleagues suggests that happiness increases with income, up to about $500,000 — roughly the income that Americans said Bankrate would make them feel wealthy.
