Here’s how much Americans think they need to earn to stop worrying about money

Many Americans remain on financially precarious ground after years of high inflation and elevated borrowing costs, but they also have a dollar figure in mind for how much money they would need to make to stop worrying about their daily expenses. 

Almost 6 in 10 people say they’d need to earn at least $100,000 a year to stop feeling anxious about their bills, according to a new report from Edelman Financial Engines. About half of that group pegged the amount even higher at $200,000 per year or more, the financial services firms found. 

The study, Edelman’s third annual “Everyday Wealth in America” report, finds that Americans generally don’t feel wealthy, and many are anxious about their finances, ranging from wallowing in credit card debt to concerns about how the November presidential election could impact their finances. 

But many people are also looking ahead to retirement, with most expecting to step back from work at age 67 or 68, although one-third don’t expect to ever be able to fully retire, the findings show.

“What we are noticing is that many Americans, even those who are affluent, aren’t feeling very confident about their financial situation,” said Isabel Barrow, director of financial planning at Edelman. “It might be coming from inflation, the election cycle or things more related to them,” such as debt or other headwinds. 

The sharp jump in the cost of living during the pandemic likely reset Americans’ views about the income they would require to stop worrying about paying the bills, Barrow added. For instance, buying a home has become more costly in recent years due to rising real estate prices and mortgage rates, raising a higher barrier to homeownership than that faced by previous generations.

“When I was getting out of college, it was a dream to say you could make $100,000,” she said. Such an income signaled that “you knew you made it.”

But today, a six-figure income is seen more as the basis for a stable financial life, rather than a sign of wealth or achievement. 

The wealth mindset 

Only 12% of Americans said they considered themselves wealthy, according to the Edelman study, which surveyed about 3,000 people over the age of 30. And only 4 in 10 people who are objectively wealthy, with assets of more than $2 million, said they considered themselves rich. 

That jibes with other recent research, including from Northwestern Mutual, a financial services firm, that found only one-third of millionaires consider themselves wealthy. 

At the same time, anxiety about personal finances has increased from last year, Edelman found, with roughly a third of respondents saying they’re worried this year, versus 29% a year ago. That’s despite a soaring stock market and wages that have been edging ahead of inflation since May 2023. 

Inflation remains a top concern, but this year’s survey found that it’s now tied with the current political environment as Americans’ top source of stress. About 1 in 5 respondents said they’ve made a financial decision in response to an election, such as changing investments to cutting spending.

But such politically motivated financial decisions can be a poor move when it comes to investing, Barrow cautioned. That’s because changing your strategy based on future events boils down to market timing, a notoriously poor financial strategy. Trying to buy and sell stocks to capture gains and avoid losses based on timing can lead to lost opportunities, Charles Schwab research has found.

“Try not to take politics and your emotions around it get conflated with your financial picture,” Barrow said. “Over the long term it doesn’t matter who is in power — the markets have trended upward over time.”