As the global COVID-19 pandemic rages on, another “health” crisis besets the US
Nearly 4 in 10 Americans say they feel “financially unhealthy” as prices remain high after a year of record-breaking inflation. However, how much you think you need to recover financially depends more on what year you were born, not how much money you have in your bank account.
Gen Z says they need a median salary of $171,633 to feel financially healthy – the highest income compared to older generations – according to a survey by personal finance company Personal Capital and retirement planning provider Empower, conducted by The Harris Poll. According to the survey.
But even though Americans are worried about the state of their finances, experts say hope shouldn't be lost.
“In a volatile market, there are plenty of opportunities to take control of your money,” said Craig Birk, chief investment officer at Personal Capital. “Knowing your net worth puts you in the driver's seat because you need real-time measurement of your financial health in order to make smart moves.”
How much each generation needs to feel ‘financially healthy'
Here's how much each generation says they need to earn to feel comfortable:
Gen Z: $171,633
Gen X: $112,222
Baby Boomers: $78,317
However, when it comes to how much these generations believe they need to save, there is a huge difference in the numbers.
Gen Z: $105,299
Gen X: $566,975
Baby Boomers: $764,999
Although Gen Z have the highest salary expectations for being financially sound, they have the lowest expectations when it comes to how much they need in savings — and vice versa for Boomers.
Paul Dear, vice president of advisory services at Personal Capital, theorized to CNBC that it could be linked to the housing market. Younger generations may feel that they need more income to afford expensive expenses mortgage rates and to plan for their retirement,
“Having less savings for younger generations basically means you have a stronger need to be able to build a nest egg,” Hiran said.
Read more: how much is here The average American is 60 years old in retirement savings — How does your nest egg compare?
deal with the immediate first
Even If You Can't Hit the Required Salary Mark Yet, You Still Have Options maximize your income And boost your savings,
“Yeah, earning more money is great, but what you do with your earnings makes the real difference,” says Lacey Cobb, director of advisory solutions at Personal Capital.
“Regardless of the number on your paycheck, avoiding high-interest debt and saving a meaningful percentage of your income will put you in a better place in the long run.”
The first step towards financial well-being deal with your debt Especially the ones with the highest interest rates. Thanks to exorbitant consumer prices, Americans are increasingly relying on them Credit Card And household debt is rising.
But the rise in credit card interest rates has hit a record high federal funds rateNow is not the time to let your monthly payments slide. Make sure you are doing your best to pay them in full and on time.
then plan for the future
Once you get your debt under control, make sure you are setting aside some savings as well. Personal Capital survey finds 58% of Americans investing more in their short-term savings retirement savings, But if the pandemic has taught us anything, it's that it's incredibly important that you have some emergency funds In lieu of any unforeseen expenditure.
and with many predict they will need $1.25 million in savings to retire comfortablyYou'll want to start preparing for your financial future right away.
While investor sentiment may be low right now, Birk advises against panic selling your investments.
“Stocks can be a secret weapon because they provide you with one of the best opportunities to hedge the effects of inflation and, over the long run, you are well positioned to outrun it many times over.”
consider building a well-diversified portfolio Along with sectors that traditionally do well throughout economic cycles, such as consumer staples and utilities.
With a little focus and a little hard work, you will soon be feeling financially strong again.
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This article provides information only and should not be taken as advice. It is provided without warranty of any kind.