How Much Do Americans Think They Need To Live Comfortably?

With financial worries like inflation, rising housing prices, student loan debt, and even increasing insurance premiums, there's a lot on the average American's plate in 2024. This can make planning for the future difficult, especially when you consider that 28% of Americans have less than $1,000 in their savings account, according to a Forbes Advisor survey. The across-the-board post-pandemic rise in prices has increasingly made it feel like living comfortably in the U.S. is a moving target. Worst of all, for some, prices have made ever reaching that target feel impossible.

Despite the financial crunch, wages in the country have technically gone up in the last few years. In fact, according to the Bureau of Labor Statistics, wages and salaries for private industry employees increased 4.1% for the 12-month period ending in June 2024 (plus, it increased 4.6% for the period ending in June 2023). However, these increases not only leave behind certain sectors like service and low-wage positions, but they also haven't kept up with the total inflation increases since 2021. This means the amount of money many Americans might need to live comfortably today has increased — and by a lot (not to mention how much Americans think they need to retire).

According to a 2024 Bankrate survey, the average American reported they would need $186,000 a year to live comfortably. However, just 6% of those surveyed reported already earning that income level. Plus, different demographics had significantly different goal incomes, meaning this average income amount is just the tip of the iceberg for many.

The $186,000 in necessary income reported for 2024 is actually down 20% from 2023, when the reported necessary income was ~$233,000. However, what is most troubling about the 2024 income number is that it's still more than double the average full-time salary of American workers (which, according to the U.S. Census Bureau, is $79,000).

This differential highlights the financial struggle that many Americans are experiencing. It's also important to realize this goal income is only to live comfortably, while the reported annual income required to feel "rich" was over $200,000 for almost half of those surveyed. Even more startling is that this $200,000 goal income was an increase of 44% over 2023 numbers. Another 33% of those surveyed by Bankrate reported needing to make $500,000 a year to feel rich, bringing the average income for feeling "rich" to $520,000 on average, an 8% increase over 2023.

It's also worth mentioning that specific demographics, such as Black Americans, reported higher necessary incomes in order to live comfortably; Black Americans reported needing an average of $282,000. This isn't only rooted in the racial wealth gap in America, but also in the systemic societal barriers that leave Black Americans earning less than other racial groups. For instance, according to the Department of Labor, Black people make 76 cents compared to a white person's dollar. Further, younger generations also reported needing higher incomes to live comfortably, with Generation Z reporting an average of $200,000 and millennials, $199,000.

Perhaps the most disheartening part of Bankrate's survey is that just 16% of those surveyed reported it was highly likely they would ever actually earn the goal income they believed they needed to live comfortably. Meanwhile 18% reported they would never reach their goal, and another 17% reported it was highly unlikely they would ever reach the annual income they need to feel comfortable. White and Hispanic Americans were the most likely to report that it was unlikely, or that they would never, reach their goal income.

Of those who believed it was unlikely they'd ever reach their goal income, women were more likely than men to report they'd never earn their goal amount. This is in keeping with a recent MarketWatch Guides survey that found 72% of women respondents reported feeling like they were living paycheck to paycheck, compared to close to 60% of men. Women were also more likely than men to feel like they were financially "broke." Although, all combined, a stunning 48.6% of Americans reported feeling "broke."

Also concerning was that MarketWatch found the average American reported needing an average of $17,430 in savings in order to feel like they were in a good financial position. However, according to a Forbes Advisor's survey on Americans and their savings, only about 8.5% of Americans reported having over $10,000 in their savings in 2024. That said, remember there are many different savings options to keep in mind even with inflation affecting prices.