Study: Average person needs more than $200K to feel financially comfortable
Jul 6, 2023, 9:30 PM
SALT LAKE CITY — A new study from Bankrate finds that the average American would need to make roughly $233,000 a year to feel financially comfortable.
Bankrate Analyst Sarah Foster gives KSL NewsRadio a breakdown of the data.
In the study, Foster says the average salary of an American worker in 2021 was examined.
“And it was about a third of what Americans say they need to feel financially comfortable,” she said. “So obviously, Americans, we’re seeing that they are grabbling with a rapid increase in the cost of living.”
She goes on to say the majority of Americans who are financially insecure blame their feelings on the economy. Foster also says 63% blamed the high inflation, while 48% voiced their concern over “economic environment.”
Inflation harming the ability to be financially comfortable
Is inflation outpacing the average American salary?
Foster says the nation has been in a situation for quite a while now where inflation is outpacing the average salary. In a previous study, she says more than half of the workers who got a pay increase say that it didn’t keep up with inflation.
“But you know the good news is inflation right now is getting a little better,” she said. “And just last month, we saw the first time that inflation is rising at a slower pace than wages.”
KSL NewsRadio’s Derek Brown said, “The average American feels they need to earn $233,000 to be secure or comfortable. I’m wondering is it the case that most of the people who said that are not making $233,000. And those that are making that, if you ask them, are going to give you a bigger number.”
Foster says that’s a case of lifestyle inflation.
“We saw that kind of come into play in our data,” she said. “We saw that overwhelmingly Americans aren’t really ever making more money than they say they need to be comfortable. And even the salary, the income, that they need to earn rises with income too.”
Foster offers some advice to help feel more financially secure.
“I think the most important thing to remember is that compound interest and time in the market almost matters more than how much you’re saving for emergencies,” she said.
Dave & Dujanovic can be heard weekdays from 9 a.m. to noon. on KSL NewsRadio. Users can find the show on the KSL NewsRadio website and app, as well as Apple Podcasts and Google Play.
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