Americans think you need $2.2 million to feel rich, but the actual figure is much lower

It’s an age-old question that’s guaranteed to spark debate: How much money do you really need to feel rich?

A new study shows that Americans think the magic number is $2.2 million, but the actual answer is surprisingly much lower, creating a “paradox” in how households view their finances.

The Modern Wealth Survey by investment firm Charles Schwab found that respondents assumed they would need millions to be considered wealthy.

However, the average net worth of someone who “felt rich” was only $560,000.

And surprisingly, the data shows that of any generation, Millennials were the most likely to feel wealthy.

Investment company Charles Schwab’s Modern Wealth Survey found that the average wealth of someone who “felt rich” was $560,000

About 57 percent of those in this cohort — between the ages of 26 and 41 — said they felt rich. The median net worth of a millennial who felt rich was $531,000.

Meanwhile, 46 percent of Gen Z individuals between the ages of 21 and 25 surveyed said they felt wealthy, with net worths averaging $414,000.

About 41 percent of Generation X — those between 42 and 57 — said they feel rich. On average, those in this cohort who felt wealthy had $410,000 to their credit.

Only 40 percent of Boomers — ages 58 to 75 — said they felt rich. But their wealth threshold was higher than any other cohort — $692,000 on average.

Charles Schwab surveyed 1,000 people across the country to piece together the findings.

When the survey was conducted in 2021, it found that Americans considered $1.9 million enough money to feel wealthy.

However, amid red-hot inflation and the rising cost of living, this figure skyrocketed to $2.2 million in 2022 – where it has remained this year.

Rob Williams, general manager of financial planning and asset management at Charles Schwab, said Bloomberg: ‘There is a paradox that people define wealth differently for themselves than for others.

“If you ask someone for a dollar amount, they’re not putting it in the context of the rest of their life and financial health.”

The findings also revealed that how affluent individuals feel is strongly influenced by their peers.

Nearly half of respondents said they felt rich if they could afford a lifestyle similar to their friends, while more than a third used social media to compare their lifestyle to others.

In addition, the respondents said that ‘wealth’ did not only include finances. Two-thirds said having healthy relationships equates to wealth rather than just money.

And 70 percent said “wealth” simply meant not having to worry about money – rather than having a large bank account.

The findings come after financial experts repeatedly sounded the alarm about America’s so-called “pension crisis.”

Dailymail.com recently revealed how large numbers of retirees were forced to return to the workplace after inflation and a rising cost of living hammered their savings.

According to an analysis of Labor Department data by Indeed economist Nick Bunker for The Washington Post, an estimated 1.5 million retirees will have re-entered the labor market in the year to May 2022.

This is a reversal of the trend where millions of people fled the workforce during and after the Covid-19 pandemic.

According to a study by Paychex, a company providing payroll services this year, one in six retired Americans is now considering returning to work.

Of those surveyed — who were out of work for an average of four years — 53 percent said it was because of financial pressure.