Finance
Nearly 60% of Americans say $100K income required to curb expenses anxiety
Storch Advisors CEO Gerald Storch discusses the state of the American consumer ahead of the holidays on ‘Varney & Co.’
With Americans still feeling the pinch of higher prices, many believe they would have to take home at least $100,000 a year to not fret about everyday living expenses, newly-released data showed.
Edelman Financial Engines on Monday said 58% of Americans said their concerns about day-to-day expenses would be lessened if they received that level of yearly income.
Higher percentages of Americans in their 30s and 40s said they had to make at least $100,000 compared to older age groups, the company found. For those in their 30s, the share was 71%, while 75% in their 40s cited that figure.
woman counting money at modern office (iStock / iStock)
Those findings were part of the company’s latest “Everyday Wealth in America” study that surveyed 3,000 Americans 30 years or older, including 1,500 “affluent” individuals aged 45-70, online between June 12-July 3.
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Meanwhile, for one-fourth of all Americans, $200,000 was the yearly salary necessary to banish stress about everyday expenses, Edelman Financial Engines reported.
A couple reviews their finances at home. (iStock / iStock)
The data comes as Americans have been contending with high inflation and costs of living for quite some time.
In August, inflation measured by the Consumer Price Index went up 0.2% month-over-month and 2.5% year-over-year in August, which the Bureau of Labor Statistics called the “smallest 12-month increase since February 2021,” FOX Business previously reported.
The costs of food and shelter have been pain points for U.S. consumers. The prices for food in August remained 2.1% higher than a year ago, while shelter was up 5.2% in the same time frame, according to the CPI.
Edelman Financial Engines’ wide-ranging study also showed just 12% of Americans view themselves as wealthy.
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Nearly two-thirds of Americans that don’t put themselves within that category indicated that having $1 million would make them feel wealthy, according to the data.
About 44% of Americans “see credit cards (versus other types of debt) as the biggest threat to their ability to build wealth,” per the study.
Edelman Financial Engines’ Amin Dabit said in a statement accompanying the newly-released study that Americans “aren’t feeling overly confident about the state of their finances.”
Woman looking at paper bill and counting expenses, Planning budget and home finance management (Lazy_Bear/iStock / Getty Images)
“Part of these worries stem from external pressures, like inflation or a turbulent election economy, while some are individual pressures, such as family responsibilities and mounting credit card debt,” he said. “Through this research, we’re learning more about how these different factors all come together to impact the way Americans perceive and achieve their wealth.”
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Overall, the economy and personal finances were major drivers of anxiety for Americans, with 49% calling the former their “biggest source” and 48% saying the latter, Edelman Financial Engines found. About 37% said politics.
Building emergency savings, growing wealth and saving for retirement were among the “top 3” financial goals reported by Americans this year.
Eric Revell contributed to this report.
Finance
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Barrons Roundtable discusses reports that Gen Z members are aggressive about wanting to retire.
Gen Z is the youngest generation of adults today, but with many struggling to make ends meet, a growing proportion say they do not expect to retire and few are socking away money to do so.
A new report from the TIAA Institute and UTA’s NextGen Practice found that a greater share of these adults age 27 and below do not anticipate retiring – at least in the traditional sense – after prior data showed nearly half of young adults either don’t want to retire, don’t believe they will be able to afford to, or are not thinking about it at all.
Gen Z as a whole has a very different view of retirement than previous generations, and a growing proportion of young adults say they do not plan on retiring at all. (iStock / iStock)
What’s more, just 20% of Gen Z respondents of working age say they are saving for retirement at all. While planning for retirement is important for everyone, saving for the future is critical for this generation that is projected to live past 100 years old. Yet, a higher cost of living could be impacting their ability to do so.
The study found that almost one-third of Gen Z (29%) are living paycheck-to-paycheck, with most of their money going to funding their basic needs, making it increasingly difficult for them to achieve financial milestones like homeownership while saving for their financial futures.
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“Thirty-six percent of respondents cited high debt or low income as the primary reason they are not saving for retirement,” Surya Kolluri, head of the TIAA Institute told FOX Business. “Gen Z is spending more on essentials than previous generations.”
Inflation is weighing on Gen Z’s finances more than prior generations, data shows. (iStock / iStock)
Kolluri said it is true that Gen Z is bearing the brunt of inflation more than the generations that preceded them, noting that as of this year, the annual inflation rate for Gen Z was half a percent higher than it was for other generations at the same age.
But Kolluri pointed to some positive findings in the data, too. He said that while only 1 in 5 reported saving for retirement, 66% of those who are saving for retirement are doing so through 401(k)s.
Empower President and CEO Ed Murphy discusses retirement planning on ‘The Claman Countdown.’
There is also at least an awareness amid Gen Z’ers that it is important to save for the future. Eighty-four percent report saving a portion of their income each month (albeit not for retirement), and 57% say they have a budget that they stick to.
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Kolluri noted 52% of Gen Z reported putting savings into savings accounts because they value the liquidity that supports current financial freedom.
“They do not equate saving for retirement as helping to ensure their financial freedom later in life…and ‘freedom’ is a concept that is very important to Gen Z,” he said. “They want flexibility and access to savings if and as they want.”
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