How much money is financially stable?
The median household income in the U.S. is just under $75,000, so it makes sense that the largest proportion of those surveyed (45%) said that it's possible to be financially stable by earning between $50,000 and $100,000 a year.
Americans say they'd need to earn about $94,000 a year on average to feel financially independent. That's about $20,000 more than the median household income of $74,580.
Being financially stable means you have enough money coming in to cover your expenses, as well as some extra funds to put aside for savings or potential crises. You continuously save money, you have paid your high-interest debts and you don't fret about emergencies because you're financially prepared.
Know: 3 Things You Must Do When Your Savings Reach $50,000
“On average, Americans believe it takes approximately an additional $284,000 above feeling wealthy to really be 'worry-free.
Feelings of financial insecurity among Americans have reached their highest point in at least a decade. A third of American adults in Northwestern Mutual's 2024 Planning & Progress survey said they don't feel financially secure. That's up from 27% in 2023 and the highest measure going back to 2012.
Living debt free: 54.2% Living comfortably, but not necessarily being rich: 50% The ability to regularly meet all of their financial obligations and still have some money left over each month: 49.3% Never having to worry about money: 46.2%
14% of Americans Have $100,000 Saved for Retirement
Most Americans are not saving enough for retirement. According to the survey, only 14% of Americans have $100,000 or more saved in their retirement accounts. In fact, about 78% of Americans have $50,000 or less saved for retirement.
“Household formation costs are very expensive, college is very expensive – everything costs more. I have a lot of empathy for people who are just starting out.” That said, the typical age of financial independence should be between 20-23 years old, according to a Bankrate survey.
By age 25, you should aim to have an emergency fund of 3-6 months of living expenses, and start regularly contributing to retirement savings to take advantage of compound interest over time, even if it's just small amounts.
$2.2 million
That's how much net worth an American needs to be considered wealthy in 2023, according to the Charles Schwab Modern Wealth Survey. The survey, which polled more than 1,000 adults online in March, asked Americans how much money a person in their area would need to be wealthy. It's an annual survey.
What salary is considered rich?
Based on that figure, an annual income of $500,000 or more would make you rich. The Economic Policy Institute uses a different baseline to determine who constitutes the top 1% and the top 5%. For 2021, you're in the top 1% if you earn $819,324 or more each year. The top 5% of income earners make $335,891 per year.
| Rank | City | Mean Income of Top 20% |
|---|---|---|
| 6 | New York, NY | $340,209 |
| 7 | San Diego, CA | $303,546 |
| 8 | Los Angeles, CA | $302,890 |
| 9 | Denver, CO | $292,305 |
While having a net worth of about $2.2 million is seen as the benchmark for being rich in America, it's essential to remember that wealth is a subjective concept. Healthy financial habits and personal perspectives on money are crucial in defining and achieving wealth.
How Many Americans Are Living Paycheck to Paycheck? A 2023 survey conducted by Payroll.org highlighted that 78% of Americans live paycheck to paycheck, a 6% increase from the previous year. In other words, more than three-quarters of Americans struggle to save or invest after paying for their monthly expenses.
Just 1 in 10 respondents to a new survey said that they are living financially free as they see it. And that doesn't mean 'being rich' with just 12% stating that as their definition of financial freedom.
Two-thirds (67%) of Americans say that they've cut back on spending, and almost half (45%) say they've put some life plans on hold. A third (35%) have dipped into their savings or investments. And almost two thirds (62%) say that even though they are able to pay their bills, they have little left over for “extras.”
Around 23% of Americans are debt free, according to the most recent data available from the Federal Reserve. That figure factors in every type of debt, from credit card balances and student loans to mortgages, car loans and more. The exact definition of debt free can vary, though, depending on whom you ask.
After inflation, high interest rates, unattainable housing prices and other economic factors, 50 percent of U.S. adults say their overall personal financial situation is worse than it was in November 2020, according to October 2023 Bankrate polling.
Trend from 2022 to 2023 in percentage of U.S. adults reporting they have enough money to live comfortably. This has varied between a high of 73% in 2007 to a low of 60% in 2012. It is 64% in the latest reading, in April 2023.
Recent data from Northwestern Mutual shows that the average 30-something has $67,400 saved for retirement. So if you're sitting on a $100,000 savings balance at age 30, it means you're ahead of the game.
What age should you have 100K saved?
“By the time you hit 33 years old, you should have $100,000 saved somewhere,” he said, urging viewers that they can accomplish this goal. “Save 20 percent of your paycheck and let the market grow at 5% to 7% per year,” O'Leary said in the video.
“By the time you're 40, you should have three times your annual salary saved. Based on the median income for Americans in this age bracket, $100K between 25-30 years old is pretty good; but you would need to increase your savings to reach your age 40 benchmark.”
While women's earning potential is highest in their thirties, the 40-49 age group is where men hit their earnings peak.
Fast answer: Rule of thumb: Have 1x your annual income saved by age 30, 3x by 40, and so on. See chart below. The sooner you start saving for retirement, the longer you have to take advantage of the power of compound interest.
Savings by age 40: three times your income. Savings by age 50: six times your income. Savings by age 60: eight times your income. Savings by age 67: ten times your income.
