Americans think they need a six-figure income to be financially healthy
- Americans say they need to earn $122,000 a year to be financially healthy, according to a new survey.
- A troubling year, inflation and rising inequality made them worried about the economy.
- This explains why many join the Great Resignation, reorienting themselves to a new job with more money.
Financial health is expensive.
Americans say they need to earn $122,000 a year on average to feel financially healthy, according to a Personal Capital and Harris Poll survey that polled more than 2,000 people in the last quarter of 2021. That’s nearly the double the average. annual salary of $66,665.
The six-digit number is the result of a lack of confidence among Americans in both their personal finances and the economy, according to the report. In the first quarter of 2021, nearly half of Americans (48%) said they felt “very financially healthy.” By the fourth quarter, that figure had fallen to 34%. Meanwhile, their confidence in the US economy is 2 percentage points lower than it was a year ago and 12 points lower than in the pre-pandemic era.
The report attributes the anxiety crisis to a variety of things: a troubling year, rising prices for goods and services, and a “wealth explosion” in the tech sector. The latter was part of a growing inequality gap in which the wealthy got richer while low-income workers struggled with job loss and paying bills, resulting in a K-shaped recovery .
The findings confirm the University of Michigan’s Consumer Sentiment Index, which reported in November that economic anxiety was at its second lowest level in a decade.
Such a curmudgeon follows a year in which supply chain shortages threatened the ‘just-in-time economy’ of the 2000s and inflation continued to climb, surging in December at the pace the fastest since 1982.
With Americans shelling out more for everyday items like beef and furniture as well as big purchases like a house thanks to a housing crisis, it’s no wonder they’re setting the bar so high in financial security. A $100,000 salary, once a symbol of success, is now considered middle class and no longer enough to buy the American dream.
This explains why so many workers are joining the Great Resignation. Fed up with low wages, emboldened by coronavirus turnaround
, and seeking to escape burnout, employees quit in record numbers for a variety of reasons. Many are simply changing roles to play a better role elsewhere. Considering that changing jobs is often the key to earning more money, this decision signals a desire for greater financial security.
But the survey found that even if they think otherwise, Americans are actually financially stable. About two-thirds of respondents (67%) say they have enough money to pay their bills on time, and 53% said they could handle an unexpected $500 expense without worry. Economists also expect inflation to ease through early 2022 as supply chains recover and demand declines.
Economic anxiety may have hampered 2021, but it looks like 2022 could ease those feelings.