According to a US study, Americans estimate that they need to earn on average more than $186,000 per year to live comfortably. Recent Bankrate Surveydown 20% from the previous year.
Different demographic groups had different income thresholds, but all but one declined. Gen Z respondents said they needed to earn $200,000 a year to feel comfortable or financially secure, up 3.6% from 2018. Bankrate 2023 Survey.
At the same time, all other age groups have seen their income thresholds fall. And when you consider different ethnic and racial groups as well as Americans with and without children, income thresholds have also fallen (with Gen Z and other age cohorts also included in these groups).
Gen Z is also an outlier when it comes to the criteria needed to feel wealthy. On average, Americans said they needed to earn $520,000 per year to achieve that status, a 7.7% increase from the previous year.
Income thresholds for most demographic groups saw comparable single-digit increases, while Gen X saw a slight decline. But Gen Z saw a whopping 20.7% increase to $461,000.
Americans believe their incomes are likely to change because they also report feeling more financially insecure. In fact, while the level of income needed to live comfortably has declined, it is still more than double the average full-time income of $79,000.
Bankrate’s latest survey found that 25% of respondents say they are completely financially secure, down from 28% in 2023, while 75% are not completely financially secure, up from 72% in 2023.
“Many Americans are stuck somewhere between the continued shock of high prices, a lack of income gains and the feeling that their hopes and dreams are disconnected from their financial capabilities,” Mark Hamrick, Bankrate’s senior economic analyst, said in the report.
The share of Gen Z respondents who feel financially secure has dropped from 25% to 24%. But they are the most optimistic of any age group, with 64% saying they are not completely secure today but will be someday. That compares to 53% for millennials, 48% for Gen X and 26% for baby boomers.
And this is despite the rising cost of living, the heavy debt burden and the A historically unaffordable real estate market in the United States which now requires a six-figure income to afford a house at the median price.
Meanwhile, separate surveys have found that Gen Z and millennials are increasingly suffering from “money dysmorphia“It has distorted the way they see themselves financially.
According to a Intuit Credit Karma Survey As of January, 45% of Gen Z and millennials are obsessed with being rich, while 48% of Gen Z and 59% of millennials feel financially behind.
“Financial dysmorphia is sort of a modern version of trying to keep up with the Joneses,” Courtney Alev, a consumer financial advocate at Credit Karma, wrote in the report. “Many people examine their finances and compare themselves to peers, people on social media, and even celebrities, which leads to feelings of inadequacy.”
