Few Americans think they make enough money each year to live comfortably, and a new survey shows many don't believe they ever will.
According to Bankrate's annual financial freedom survey, Americans claim they need to earn more than $186,000 per year just to live comfortably — more than double the median annual household income. However, less less than 4 in 10 people actually believe they'll ever achieve that level of income in their lifetime, and only 6% of U.S. adults currently make that amount.
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While a six-figure salary may seem out of reach for many, it's not necessarily surprising that so many Americans think it's needed to live comfortably. The data follows a recent trend that shows declining faith in the so-called American dream, as many younger people struggle to achieve things like homeownership.
Experts recommend that housing expenses should cost no more than 28% of a person's gross income. Meanwhile, the median cost for a home in January 2024 was $402,343, up by 46% compared to January 2020, according to Bankrate.
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That means in order for a person to afford a typical house in today's market, they would need a yearly income of about $110,000. Bankrate senior economic analyst Mark Hamrick said it's things like this that are causing so many people to feel financially insecure.
"Many Americans are stuck somewhere between continued sticker shock from elevated prices, a lack of income gains and a feeling that their hopes and dreams are out of touch with their financial capabilities."
