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A bottle of champagne on a table in a private jet.
How much money, exactly, do you think you need to have in order to feel rich? According to a new survey by GOBankingRates, that number is getting higher and higher.
GOBankingRates released the findings of its latest survey exploring Americans’ perceptions of what “rich” really means, at least when it comes to their finances. The findings included “how much total money they would need in savings and investments to feel financially secure, whether or not they believe they will achieve millionaire status, and whether or not they believe they have saved enough for retirement,” it shared in a statement provided to Travel + Leisure.
They figured this all out by asking 1,000 Americans ages 18 and older from across the country 13 questions, including “Do you believe you will be a millionaire in your lifetime? What annual income would you need to feel personally wealthy? How do you define ‘wealth’?” and “If you lost your job today, how many months worth of expenses could your savings cover?”
After compiling all the responses, the team found that more than one-third (34 percent) of Americans believe you need to have more than $500,000 in savings and investments to feel financially secure. And, according to experts, that’s actually a pretty solid target.
“This sentiment rings true,” Tyler Rayman, wealth management associate with Greenleaf Trust, shared in the report. But as Rayman added, even that isn’t enough to retire on. “A portfolio of that size, assuming a modest 4 percent annual withdrawal rate, would produce only $20,000 per year—an amount that often falls short of covering basic living expenses.”
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But if you’re still of working age, Rayman noted that you don’t need to have this much cash squirreled away to be financially OK.
“True financial security could be defined by having a stable income, manageable debt, and adequate savings to handle emergencies and support retirement, not by reaching a specific net worth,” he added. “In essence, living within or below your means is often more impactful than accumulating a particular dollar figure.”
As for who thinks they’re going to reach millionaire status in this lifetime, that goes to Gen Z, who is the most confident generation of all. And, as John Gillet, CEO and founder of Gillet Agency, a financial planning firm, added, that’s a solid target for people to save up to for retirement.
“If you consider having a million dollars to be a millionaire, then I’d argue that would probably be the coveted amount to retire with for financial security,” Gillet said. “With this number, financial levers can be utilized to guarantee adequate levels of income to weather the storms of retirement. This amount of money would work effectively in conjunction with having no major debt and good Social Security benefits.”
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