As the global COVID-19 pandemic rages on, another “health” crisis has been plaguing the U.S.
Almost 4 in 10 Americans say they feel “financially unhealthy,” as prices remain high after a year of record-breaking inflation. However, how much you think you need to get financially well may depend more on what year you were born than how much is sitting in your bank account.
Gen Z says they require an average salary of $171,633 to feel financially healthy — the highest income compared to older generations — according to a survey from personal finance company Personal Capital and retirement plan provider Empower, conducted by The Harris Poll.
But even while Americans remain concerned about the state of their finances, experts say not to lose hope.
“In a choppy market, there are plenty of opportunities to take control of your money,” said Craig Birk, chief investment officer at Personal Capital. “Knowing your net worth puts you in the driver’s seat because you need a real-time measure of your financial health to make smart moves.”
How much each generation needs to feel ‘financially healthy’
Here’s how much each generation says they need to earn to feel comfortable:
- Gen Z: $171,633
- Millennials: $133,758
- Gen X: $112,222
- Baby boomers: $78,317
However, when it comes to how much savings these generations believe they need stashed away, the numbers drastically differ.
- Gen Z: $105,299
- Millennials: $349,784
- Gen X: $566,975
- Baby boomers: $764,999
Although Gen Z has the highest salary expectations to be financially healthy, they have the lowest expectations when it comes to how much they need in savings — and vice versa for boomers.
Paul Deer, vice president of advisory service at Personal Capital, theorized to CNBC that this might be connected to the housing market. Younger generations may feel they need a higher income to afford expensive mortgage rates and to plan for their retirement.
“Lower savings for younger generations basically means you have a stronger need to be able to build a nest egg,” Deer said.
Courtesy Yahoo Finance. By Sarah Louis. Entire article available here.