New Edelman Financial Engines Research Finds More Americans in 2023 Require Above $1 Million to Feel Wealthy

Boston, Mass – December 6, 2023 – Edelman Financial Engines (EFE), a top independent wealth planning and investment advisory firm, today released the findings from its second annual Everyday Wealth in America report. This growing body of research examines a broad range of topics at the intersection of life and money, including perceptions about wealth, the top concerns and sources of stress, and issues related to family wealth planning, as well as the financial challenges people face in their relationships. The study also investigates how financial professionals and employers can help Americans address some of these important topics so they can be better prepared to achieve their goals.

“Our research shows how the market volatility over the past two years has taken a financial and emotional toll on individuals and families regardless of wealth,” said Kelly O’Donnell, Chief Client Officer at Edelman Financial Engines. “We’re seeing how it impacts the big financial moments in life, like deciding when to purchase a home or how to retire, as well as our everyday moments, like buying groceries for our families and filling up the car. We are all influenced by the larger economic forces around us, as well as the realities of our own individual relationships. Together, these factors all connect to our financial lives and how we perceive what it means to feel wealthy.” 

EFE’s research is based on a consumer survey of more than 2,000 Americans who represent the general population as well as an oversampling of affluent, upper middle-class respondents (ages 45 to 70 with household assets between $500,000 and $3 million). By examining the relationship people have with their wealth through the lens of current events, family dynamics, and life milestones, EFE hopes to gain insights that can help support clients along their wealth planning journey.

Feeling wealthy continues to elude even the affluent.  Similar to 2022, very few Americans in 2023 consider themselves wealthy. According to the findings, only 14% feel this way, up only slightly from 12% in 2022. As inflation has pushed prices up this past year, the bar has also been raised on the number who believe they need to surpass the million-dollar threshold:

• In 2022, 57% of Americans said they would need at least $1 million to feel wealthy; this year, 67% of Americans believe they would need that much.
• Is there a difference between what it takes to feel wealthy versus worry-free? We found that this “delta” depends greatly on where you are in life. The difference is highest for those in their 40’s where the amount to be worry-free ($2.69 million) peaks at nearly $1 million more than what it takes to feel wealthy ($1.73 million). For those in their 60’s and beyond, however, the numbers are reversed. This older segment says feeling wealthy requires more than what it takes to be free of money worries – and this difference peaks at $0.5 million more for those in their 70’s.

Inflation worries remain for everyone, while politics emerges as the #1 concern and source of stress for the affluent.  For Americans overall, inflation has taken its toll during 2023. It is the top concern for most (84%), while money issues remain the leading cause of stress (46%).

• Recession fears have cooled a bit from last year (a top concern for 78% in 2023, down from 86% in 2022). However, the worry about the political climate leading into an election year has quickly filled the gap. The affluent are especially concerned about politics as we head into 2024.
• The current political environment ranks as the #1 worry among affluent individuals (90%) while the 2024 election, specifically, comes in at #3 (81%) on their list of concerns. Similarly, while 31% of Americans overall view politics as the biggest source of stress, nearly half of affluent consumers (47%) echoed the sentiment, making it the #1 stressor across this demographic.

Credit card debt and home-buying impacted Americans in a notable way during 2023.  Despite high inflation, consumer spending has not necessarily slowed down. As a result, Americans racked up more credit card debt than ever this year, as levels surged past the $1.08 trillion mark, according to the latest data reported from the Federal Reserve Bank of New York.

• According to the research, 39% of Americans across all wealth brackets (and 32% of affluent) identified credit card debt as the biggest obstacle to their ability to build wealth.
• Meanwhile, 33% overall reported feeling uncomfortable with the amount of debt they accumulated this year, and 24% of affluent feel emotionally burdened with what they put on credit. 

The housing market has also been a significant source of financial stress in 2023. High interest rates, expensive mortgages, low inventory, and inflation have made purchasing real estate more costly and difficult than just a few years ago – putting it out of reach for many prospective homebuyers.

• The research found that 45% of Americans in the potential market to buy a home (and 37% of affluent) were discouraged from doing so in 2023. Interest rates spurred concern over the accessibility of homeownership, with nearly 7 in 10 Americans (68%) citing this as a top financial worry and primary reason for the difficult housing market.
• The challenge was even greater for those in their 30s (the youngest demographic tracked by the report); 51% indicated they felt discouraged from buying a home. Nearly the same amount (50%) felt like they missed the window of opportunity to buy the type of home they wanted.

Social media contributes to unhealthy financial feelings and behaviors. Americans today spend more time than ever scrolling though social media. While a good deal of public attention is paid to the broader mental health implications, EFE’s research took a closer look at the impact social media is having on financial self-esteem and the unrealistic expectations it fosters.

• A substantial 74% believe that their friends portray themselves on social media as wealthier than they really are. At the same time, 27% admit to feeling less satisfied with their own money because of what they see coming through their feeds every day.
• This is translating into a growing, digital version of “keeping up with the Joneses.” A solid 33% of those who use social media say they’ve spent more on something than they could really afford – such as a vacation, a home renovation, or a luxury item – because of social media pressures. The financial fear of missing out and over-spending is even greater for those who scroll more than three hours a day (51%) compared to less than one hour daily (16%).

Working with a financial planner can address these obstacles to wealth. Thoughtful conversations and planning with an expert can go a long way to helping Americans move their financial lives forward. Among those who work with a financial professional, 76% say that they stress less about finances because of the help they get. However, only 37% of those surveyed work with one, which reinforces the opportunity more people have to get this type of support.

“No matter how you feel or where you are in your wealth-building journey, a trusted advisor can help navigate a broad range of ‘life and money’ issues,” added O’Donnell. “Insights from research like this deepens our understanding of the challenges Americans face and helps us guide our clients on their own path to everyday wealth.”

For more information on the Everyday Wealth in America 2023 report, click here.

¹ The 2023 Everyday Wealth in America research was conducted for Edelman Financial Engines by Greenwald Research. Information was gathered through an online survey of 2,022 Americans who were at least 30 years old, from August 28 to September 8, 2023. The total sample included an oversample of 1,013 “affluent” respondents between the ages of 45-70, with household assets between $500K-$3M, and currently working with a financial professional or open to doing so. Data was weighted to correct for the affluent oversample and was also weighted by household assets, age, gender, race, and education to reflect the broader national population. If randomly conducted, the survey would have a margin of error (at the 95% confidence level) of plus or minus 2 percentage points.

² The Federal Reserve Bank of New York’s Quarterly Report on Household Debt and Credit, Q3 2023.