Very few Americans in 2023 consider themselves wealthy—and that includes even many who most would consider to be wealthy, according to findings released today from Edelman Financial Engines’ second annual Everyday Wealth in America report.
According to the findings, only 14% of Americans feel wealthy, up only slightly from 12% in 2022. As inflation has pushed prices up this past year, the bar has also been raised on the number who believe they need to surpass the million-dollar threshold.
In 2022, 57% of Americans said they would need at least $1 million to feel wealthy; this year, 67% believe they would need that much.
The study also investigates how financial professionals and employers can help Americans address topics such as perceptions about wealth, top concerns and sources of stress, and issues related to family wealth planning, as well as financial challenges people face in their relationships, so they can be better prepared to achieve their goals.
“Our research shows how the market volatility over the past two years has taken a financial and emotional toll on individuals and families regardless of wealth.”
Kelly O’Donnell, Edelman Financial Engines
“Our research shows how the market volatility over the past two years has taken a financial and emotional toll on individuals and families regardless of wealth,” said Kelly O’Donnell, Chief Client Officer at Edelman Financial Engines. “We’re seeing how it impacts the big financial moments in life, like deciding when to purchase a home or how to retire, as well as our everyday moments, like buying groceries for our families and filling up the car. We are all influenced by the larger economic forces around us, as well as the realities of our own individual relationships. Together, these factors all connect to our financial lives and how we perceive what it means to feel wealthy.”
Is there a difference between what it takes to feel wealthy versus worry-free? The research found that this “delta” depends greatly on where a person is in life. The difference is highest for those in their 40s where the amount to be worry-free ($2.69 million) peaks at nearly $1 million more than what it takes to feel wealthy ($1.73 million).
For those in their 60s and beyond, however, the numbers are reversed. This older segment says feeling wealthy requires more than what it takes to be free of money worries—and this difference peaks at $0.5 million more for those in their 70s.
Politics emerge as top stressor
Recession fears have cooled a bit from last year (a top concern for 78% in 2023, down from 86% in 2022). But worries about the political climate leading into an election year has quickly filled the gap. The affluent are especially concerned about politics as we head into 2024.
The current political environment ranks as the No. 1 worry among affluent individuals (90%) while the 2024 election, specifically, comes in at No. 3 (81%) on their list of concerns. Similarly, while 31`% of Americans overall view politics as the biggest source of stress, nearly half of affluent consumers (47%) echoed the sentiment, making it the No. 1 stressor across this demographic.
For Americans overall, inflation has taken its toll during 2023. It is the top concern for most (84%), while money issues remain the leading cause of stress (46%).
Building emergency savings prioritized
In comparison to 2022, the research found consumers are more likely to have a goal to build their emergency savings. Doing so was the top financial goal of those surveyed, with 53% citing it as a goal (compared to 48% in 2022).
That topped “grow wealth” at 47% (up from 43% in 2022), while “save for retirement” was cited by 42%—the same as in 2022. “Pay off debt/be debt-free” was next, cited by 38% (up from 33% in 2022). Being able to leave an inheritance was next at 33% (up from 26% in 2022).
Yet many recognize that it can be tough to achieve financial goals on their own: half of all Americans (48%) believe they need help from a financial professional to accomplish their goals.
“No matter how you feel or where you are in your wealth-building journey, a trusted advisor can help navigate a broad range of ‘life and money’ issues,” added O’Donnell. “Insights from research like this deepens our understanding of the challenges Americans face and helps us guide our clients on their own path to everyday wealth.”
Among those who work with a financial professional, 76% say that they stress less about finances because of the help they get. However, only 37% of those surveyed work with one, which reinforces the opportunity more people have to get this type of support.
EFE’s research is based on a consumer survey of more than 2,000 Americans who represent the general population as well as an oversampling of affluent, upper middle-class respondents (ages 45 to 70 with household assets between $500,000 and $3 million). By examining the relationship people have with their wealth through the lens of current events, family dynamics, and life milestones, EFE hopes to gain insights that can help support clients along their wealth planning journey.
SEE ALSO:
• Wealthy Americans Look for Help With Financial Planning
• 401(k) Loans Grow as Participants Struggle with Emergency Savings
• Jay Shah Named CEO at Edelman Financial Engines
Veteran financial services industry journalist Brian Anderson joined 401(k) Specialist as Managing Editor in January 2019. He has led editorial content for a variety of well-known properties including Insurance Forums, Life Insurance Selling, National Underwriter Life & Health, and Senior Market Advisor. He has always maintained a focus on providing readers with timely, useful information intended to help them build their business.