Americans say they would need to earn about $233,000 a year to feel financially secure, according to a new survey from Bankrate.
Bankrate analyst Sarah Foster said that figure “really stands out to me,” considering the median household income in the U.S. is around $70,000.
“That’s showing us that Americans feel like they’re being priced out,” she said. “It’s requiring a lot of money for them to feel financially comfortable.”
The survey, conducted last month and released Thursday, also shows Americans think they would need to earn nearly half a million dollars a year to feel rich or to achieve financial freedom.
To Foster’s point about Americans feeling “priced out,” personal incomes have increased about 70% over the last couple of decades while home prices have ballooned 134%, gas costs 139% more, and grocery staples such as eggs, bread and beef all cost at least 95% more.
Americans are more than two times more likely to feel financially insecure than secure, according to Bankrate.
And Foster said high inflation is the biggest factor driving insecurity.
The survey found just over a quarter of Americans do feel completely financially secure. But it also found just over a quarter say they’ll never be completely financially secure.
Men (30%) are more likely than women (26%) to say they are completely financially secure.
And white people (31%) are more likely than Black (21%) or Hispanic people (22%) to say they’re completely financially secure.
Gen Xers, who are now in their 40s and 50s, are least likely to say they feel financially secure.
Foster called those folks “the sandwich generation,” as they’re still dealing with their own student debt while raising families or sending their own children to college. And, at the same time, they might be caring for aging parents.
Not surprisingly, people who live in more expensive parts of the country feel like they need to make more to feel financially comfortable.
People in the Northeast pegged $243,000 as the income needed to feel stable, while folks in the West said they would need to earn $246,000.
Southerners are basically on par with the national average, and Midwesterners say they’d only need to earn $206,000 to be financially secure.
But income isn’t everything, Foster said.
She noted that income over $200,000 isn’t realistic for people in many professions.
And she said even high-earners can feel the stress of high debt.
Financial security is a “continuum,” she said.
“It’s not this kind of single destination,” she said. “It’s more of a journey, so it kind of starts with you being able to afford your everyday expenses, to afford essentials, to be able to cover your bills and hopefully treat yourself every now and then. And that’s kind of how we’re thinking about financial comfortability.”
Aside from high inflation and rising interest rates, Americans cited insufficient emergency savings or retirement funds, lacking career mobility, high debt, and housing affordability as big factors in their financial insecurity.
Bankrate offered some advice for boosting financial security.
Foster said it largely comes down to worrying about what you can actually control.
Save, and don’t feel defeated if you can’t save a lot, she said.
Keep the long-term goals in mind, knowing that consistency, time in the market and compound interest can make a big difference.
Set realistic salary expectations.
