How much does an individual’s net worth need to be for them to be considered wealthy?
A new survey reveals the amount that Americans feel constitutes “wealth,” CNBC reports.
Schwab’s 2021 Modern Wealth Survey asked 1,000 participants in the US to define the threshold.
And while there were differences based on respondents’ demographics, the average response was $1.9 million.
A breakdown of the answers by generation shows each group’s average:
—Millennials (ages 24 to 39): $1.4 million
—Gen X (ages 44 to 55): $1.9 million
—Baby boomers (ages 56 to 74): $2.5 million
Interestingly, the average amount ($1.9 million) is lower than the survey’s average in 2020, when Americans said $2.6 million was considered wealthy.
But this drop may not be surprising, as just more than half of all participants (53%) said the coronavirus pandemic affected their financial situation last year.
A net worth is the sum of an individuals’ total assets, minus any debt, including loans, mortgages or credit card balances.
To be considered in the top 1% of net worths, a household needs combined assets totalling over $11 million.
Before last year, the Federal Reserve’s 2019 Survey of Consumer Finances found that the average net worth of US households was $748,000.
Rob Williams, vice president of financial planning at Charles Schwab, suggests that whether you were affected or not during the pandemic, planning for the future is important.
“At Schwab, we talk about the importance of having a plan at times of significant change or transition in life, like getting married, changing careers or losing a loved one,” Williams said. “With the pandemic, we have all collectively experienced a major life event, so it’s particularly important to take the time to create a plan to help ensure your finances are on track and be ready for whatever comes next in your life.”
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