We may be entering the silver lining phase of COVID-19.
According to the recently released Schwab 2021 Modern Wealth Survey, the net worth for Americans to feel “financially comfortable” was $624,000 a year, compared to 2020’s survey which was at $934,000. (Net worth is a calculation of a person’s total assets, minus their debt.)
That sizable dip implies that the general pandemic lockdown, loss of income, and an increased priority on mental health has affected Americans’ concepts of what “wealth” really means.
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The annual poll of 1,000 U.S. adults centers on how Americans think about saving, spending, investing, and wealth. There are wide differences in expectations between genders and age. Men have a higher expectation of the minimum net worth needed to feel financially safe, at $864,000, more than twice as much as for women, $325,000.
Surprisingly, considering their “slacker” reputation, Generation X has the highest median net worth goal, at $717,000, compared to $609,000 for Baby Boomers and $618,000 for Millenials. Then again, Gen Xers love their stuff!
According to The Federal Reserve's 2019 Survey of Consumer Finances, U.S. households had an average net worth of $748,800 prior to the pandemic, though the median net worth of all families was much lower, just $121,700 in 2019.
If we’ve lowered the bar on assets, we’ve raised it as far as our mental health -- about 69% of Schwab survey respondents say mental health is more important to them now than it was before the pandemic.
While a deeper respect for mental health is a positive outcome of the difficult last year, it’s also offered a practical truth that we had better get saving, because also according to the Schwab survey, Americans believe you must get to a $1.9 million net worth to be considered “wealthy.”
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