The number of Americans who say they feel “financially unhealthy” is close to 40% as inflation keeps rising.
According to a recent study by Personal Capital, which was performed by The Harris Poll between April 19 and 23, 2,000 Americans over the age of 18 were polled.
Approximately 58 percent of Americans believe that their quality of life is declining due to rising prices, and a staggering 69 percent believe that their wage is not keeping up with inflation.
So what exactly does it take for Americans to feel confident about their financial situation? The average amount of savings and salary projections that respondents to the study stated they would need to be financially healthy are shown below.
Expectations regarding salary
In all, Americans now require a lower average wage of $107,000 per year than they did six months ago in order to feel financially secure.
However, there were significant differences between generations. The typical wage that each generation claims they require to feel financially secure is listed below:
- Gen Z, who was born 1997 to 2012 (Aged between 10-25): $171,633
- Millennials, who was born 1981 to 1996 (Aged between 26-41): $133,758
- Gen X, who was born 1965 to 1980 (Aged between 42-57): $112,222
- Baby boomers, who was born 1955 to 1964 (Aged between 58-67): $78,317
It’s interesting to note that Gen Zers require the highest pay to feel financially secure.
According to Paul Deer, certified financial planner and vice president of advisory service at Personal Capital, this is largely because of the property market. The cost of home ownership has increased significantly in recent years, so it makes natural that younger generations would like to earn more in order to feel safe enough to cover the costs.
It’s important to keep in mind that subjective terms like “financial health” might signify various things to different people based on their goals.
Expectations regarding savings
In response to inflation, savings expectations changed in opposition to salary expectations. Over the past six months, the average amount of funds required to feel financially affluent increased by 17%, to an average of $529,900.
The typical amount of savings required by each generation to be financially sound is as follows:
- Gen Z, who was born 1997 to 2012 (Aged between 10-25): $105,299
- Millennials, who was born 1981 to 1996 (Aged between 26-41): $349,784
- Gen X, who was born 1965 to 1980 (Aged between 42-57): $566,975
- Baby boomers, who was born 1955 to 1964 (Aged between 58-67): $764,999
“Whereas Gen Z has the highest salary expectations to be financially healthy, they have the lowest savings amount to be financially healthy,” Deer says.
Why the younger generations yearn for higher salaries may be explained by the notable difference in savings expectations between Gen Z and baby boomers: “Lower savings for younger generations basically means you have a stronger need to be able to build a nest egg,” says Deer.
Additionally, priorities may vary between generations. A little more than half of millennial survey participants said they’ll spend more time organizing a trip than their retirement. They are also the generation that is least likely to reduce overall travel due to inflation.
It’s crucial, according to Deer, to remember to live through these trying times. Everyone need to be question themselves, “Can you do what you want today while also positioning yourself positively for the future?”