How is the average American doing financially?
Average Net Worth of an American Family
Only 48% of Americans have enough emergency savings to cover at least three months' worth of expenses, as of May 2023. 22% have no emergency savings at all. Americans' debt is piling up.
Are Americans Over-Spending? More than half of Americans (58%) report being able to live within their means and not worry about making ends meet, while fewer than half (40%) feel they are in good or great financial shape, and one in four (23%) say they are in poor shape.
Most American households have at least $1,000 in checking or savings accounts. But only about 12% have more than $100,000 in checking and savings.
If you are facing financial stress right now, you are not alone. According to a recent Ramsey Solutions study, 34% of survey respondents indicated that they were either facing financial struggles or were actively in crisis.
Nearly half of Americans will start 2024 in the red
While nearly three quarters of Americans (72%) say they have clearly defined personal finance goals for 2024, many will start in the red. According to the study, nearly half of Americans (46%) expect to have credit card debt heading into 2024.
SAN MATEO, Calif., Aug. 22, 2023 /PRNewswire/ -- Despite most Americans having modest expectations of what it means to attain financial freedom, just 1-in-10 (11%) report they are living their definition of financial freedom, according to a new survey by Achieve, the leader in digital personal finance.
A majority, 65%, say they live paycheck to paycheck, according to CNBC and SurveyMonkey's recent Your Money International Financial Security Survey, which polled 498 U.S. adults. That's a slight increase from last year's results, which found that 58% of Americans considered themselves to be living paycheck to paycheck.
A 2023 survey conducted by Payroll.org highlighted that 78% of Americans live paycheck to paycheck, a 6% increase from the previous year. In other words, more than three-quarters of Americans struggle to save or invest after paying for their monthly expenses.
More than 60% of Americans live paycheck to paycheck as of September 2023, according to a LendingClub report. Even people in higher income brackets are affected. More than half of Americans earning over $100,000 a year live paycheck to paycheck.
Is 100K in retirement by 30 good?
“By the time you're 40, you should have three times your annual salary saved. Based on the median income for Americans in this age bracket, $100K between 25-30 years old is pretty good; but you would need to increase your savings to reach your age 40 benchmark.”
You can still live a fulfilling life as a retiree with little to no savings. It just may look different than you originally planned. With a little pre-planning, relying on Social Security income and making lifestyle modifications—you may be able to meet your retirement needs.
The average retirement savings for all families is $333,940 according to the 2022 Survey of Consumer Finances. Taken on their own, those numbers aren't incredibly helpful. There are a variety of decent retirement savings benchmarks out there, but how much money other people have isn't one of them.
The survey also found that 37% of Americans are behind on monthly bills, which jumps to 53% among parents with young children. Additionally, 61% reported that inflation has impacted their ability to afford their lifestyle.
But despite the larger pressures, they're not satisfied with their situation; 57% of respondents said the current state of their savings is stressing them out. Nearly one in four (22%) of U.S. adults have no emergency savings at all, Bankrate found—the second-lowest percentage in 13 years of polling.
"According to 21% of paycheck- to-paycheck consumers, nonessential spending is one reason for their financial lifestyle, with 10% saying it is their top reason for living paycheck to paycheck," the report noted.
That said, the typical age of financial independence should be between 20-23 years old, according to a Bankrate survey.
99% of Americans will be financially worse-off than they were pre-pandemic by mid-2024, JPMorgan says. JPMorgan said the vast majority of Americans have burned through excess savings. It's likely that all but the top 1% of consumers will be worse off financially in mid-2024 than they were pre-pandemic, the bank said.
“As a result, the leading index currently does not signal recession ahead. While no longer forecasting a recession in 2024, we do expect real GDP growth to slow to near zero percent over Q2 and Q3.”
Around 23% of Americans are debt free, according to the most recent data available from the Federal Reserve. That figure factors in every type of debt, from credit card balances and student loans to mortgages, car loans and more.
Do 30% of Americans have no savings?
If you've got nothing saved for retirement, you're not alone. Nearly 30% of Americans have $0 saved for retirement, per recent data from personal finance website GOBankingRates. Another 33% have less than $50,000 saved.
Americans say they'd need to earn about $94,000 a year on average to feel financially independent. That's about $20,000 more than the median household income of $74,580.
Majority of Americans' Incomes Doesn't Exceed Their Expenses
We asked respondents to describe their current income situation. Data from our survey revealed that 41% of respondents' incomes covered their expenses with nothing left over, meaning they're living paycheck to paycheck.
The German Institute for Economic Research in Berlin reveals another alarming statistic: almost half of the population, or 40%, is living paycheck to paycheck. They have little to no financial cushion to fall back on in case of emergencies, let alone for long-term aspirations or retirement.
9% of Americans have between $100,000 and $200,000 saved, and 4% have between $200,000 and $350,000 saved. Finally, 4% have between $350,000 and $500,000 saved, and about 4% have more than $500,000.
