How Much Money Americans Think You Need To Be Considered Financially Comfortable
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When you dream about financial comfort what do you see for yourself? Millions? Tens of millions? Billions!?! Well, according to Schwab’s 2021 Modern Wealth Survey Americans need a lot less to be financially comfortable than we could have imagined. And the number is a lot lower now than what the survey revealed in 2020.
How could that be, you ask? Good question. If anything, one might assume that the number would have gone up. After all, you have to consider how many people were financially destroyed over the last year.
According to Schwab:
While refocusing their priorities, Americans have also revised their perspectives on what it takes to be wealthy.” And Schwab’s survey reveals Americans believe it takes an average $1.9 million in personal net worth to be considered “wealthy” in 2021. While that’s still more than double the actual average net worth of U.S. households, it’s $700,000 below the bar set for wealth in Schwab’s 2020 survey, which was fielded before the pandemic outbreak.
In 2020, Americans thought almost $1 million was required to be financially stable, but it’s amazing what a little perspective can do.
How Much Money Americans Think You Need To Be Considered Financially Comfortable, By Generation
Millennials (ages 24 to 39): $618,000
Gen X (ages 40 to 55): $717,000
Baby boomers (ages 56 to 74): $609,000
The bar for financial stability wasn’t the only money milestone that was lowered in a year’s time. The amount people think you need to be wealthy or to achieve “financial happiness” has gone down significantly as well.
After the year Americans (and the world) endured, it’s not farfetched to think that some many people are prioritizing other things over money. But that doesn’t mean there shouldn’t be an emphasis on wealth building. Another pandemic or financial disaster could be right around the corner. It’s best to be prepared.
[Chart image via Schwab]