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Will Americans Need $200,000 A Year To Be Financially Comfortable?

By Jeanette Brown

  • The average American feels they’d need to earn over $200,000 a year to be financially comfortable
  • 52% of Black U.S. households earn less than $50,000, while 48% make $50,000 or more

“Financially comfortable,” the meaning is unreachable for many, especially when you consider Americans feel they need more than three times the median U.S. household income of about $71,000 a year to feel financially secure. A Bankrate survey found U.S. citizens want to earn over $200,000 a year to be financially comfortable. Considering the median household income for Black U.S. households in 2021 was $46,400 and more than 450,000 job cuts during the first half of 2023, the expectation of being financially secure feels out of reach for many. 

Why This Matters: More than 60% of Americans said inflation was one of the reasons they didn’t feel comfortable. In June 2022, the inflation rate jumped by 9.1% relative to a year earlier, the largest increase since the end of 1981. 

While inflation is impacting all Americans, the effect has varying degrees of severity based on socioeconomic status. Nearly 40% of Americans wouldn’t be able to cover a $400 emergency with cash savings, according to the Federal Reserve. 

To be sharp when making this point, let’s define “financially comfortable.” Most would agree that being capable of paying for ongoing expenses, saving for retirement and emergencies, paying down debt and having a bit more left over for an occasional ‘splurge,’ whatever it might be, is more likely to be aligned with being comfortable. 

Situational Awareness: There are many factors driving Americans’ to feel financially unsatisfied, but the biggest contributors may be out of their control. Historical inequalities like the racial wealth, income and gender pay gaps could make some groups feel like they need to earn even more to feel secure. Disadvantages in the job market and growing your own wealth also contribute to the feelings of financial insecurity. Today, being unsatisfied and seeking financial comfort is driving pursuit of side hustles, gig work, polyworking, entrepreneurship and small business. 

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