Yahoo Finance Americans Say They Need $150K in Savings To Feel Comfortable: How Much Do You Actually Need?
Many Americans have insufficient savings, which could be leading to feelings of anxiety and discomfort. A recent GOBankingRates survey found that half of Americans have less than $500 in savings, with 36% having $100 or less.
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While this doesn’t account for funds in retirement and investment accounts, it’s worth noting that those figures are a far cry from what Americans now see as the ideal. A new survey by Clarify Capital found that Americans believe they need to have $150,000 in savings to live comfortably.
Here’s a closer look at why Americans have latched onto this $150,000 figure, and how much you should actually have in savings to live comfortably.
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Why Americans Want $150K in Savings
While many Americans lack a financial safety net, that doesn’t mean that don’t want one. Having $150,000 saved up in various accounts is enough to give most Americans peace of mind, said Michael Baynes, co-founder and CEO of Clarify Capital.
”Many Americans may consider $150,000 as a target savings goal because it gives a significant cushion for emergencies, retirement and major costs,” he said. “This statistic is most likely motivated by a need to feel safe in the face of economic uncertainty, such as job loss or health issues. It also takes into account the rising cost of living.
”Additionally, $150,000 could represent a psychological milestone that represents financial success to many Americans,” Baynes added.
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Is $150K a Reasonable Target?
There may be some reasoning behind the $150,000 savings target, but how much do Americans actually need? A lot depends on the individual.
“Individual circumstances, such as income, lifestyle and location, can impact the need for $150,000 in savings,” Baynes said. “In lower-cost areas, it may be enough to cover unexpected costs and provide a safety net. However, in high-cost areas or for those with higher expenses, it may not provide long-term security. In addition, family size and health demands might have a big impact on whether $150,000 is sufficient.”
Instead of aiming for a popular savings goal, choose a target that actually works for you.
”Savings goals should be tailored to individual financial conditions — not a one-size-fits-all approach,” Baynes said.
How To Set a Savings Goal for Yourself
You might not need $150,000 in savings to live comfortably, or you might need more. To find out, it’s important to take a holistic view of your financial situation.
“Americans can set personal savings goals by assessing their monthly spending, debt, lifestyle goals and retirement plans,” Baynes said. “Using budgeting applications, financial counselors and retirement calculators may assist in constructing a personalized savings plan. Consider medical bills, children’s schooling fees and future lifestyle goals. It might also be worth it to review and adapt the savings strategy on a regular basis to account for changes in life and financial goals.”
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This article originally appeared on GOBankingRates.com: Americans Say They Need $150K in Savings To Feel Comfortable: How Much Do You Actually Need?
