Financial independence is important to 67% of Americans, though nearly a quarter (24%) say they haven’t yet achieved it, according to new research from Empower, a leader in financial planning, investing, and advice.
The definition of “making it” financially varies among spenders and savers, though many equate it with resilience and independence: 44% of Americans say it’s synonymous with not needing to rely on anyone else for money, 39% say it’s career advancement and one quarter say it’s reaching a certain net worth.
To put a dollar value on it: $94,000 per year is the magic number average Americans feel they need to earn to achieve financial freedom, and 60% feel optimistic they can reach this money milestone.
Top signs you’ve financially “made it” in life:
* Being financially independent/not relying on anyone else for money – 44%
* Moving up in my career/getting promoted – 39%
* Having a job I love – 37%
* Making a certain amount of money – 25%
* Not having to work at all – 25%
* Being able to spend money without worrying – 22%
* Being able to pay my bills on time – 9%
* Buying luxury items I want – 7%
* Being able to retire comfortably – 7%
* Buying a home – 6%
Set clear financial goals
Despite having financial aspirations for the future, a majority of people (72%) admit they currently stress over their finances at least once per month and nearly 1 in 5 (17%) say they worry about money daily.
Getting on track doesn’t have a time limit, but it does require a honed focus. “No matter your age, financial independence starts with clarity,” underscores Keith Jones, senior financial professional with Empower. “Ask yourself what you want and why you want it. Establishing clear financial goals provides both direction and purpose, motivating you to work towards a more secure and satisfying financial future.”
The journey looks different for everyone
Over half (57%) of Americans say they still rely on their family and friends for financial support, especially for help paying their rent (62%), internet and streaming services (56%), and their phone bill (54%). Of those who don’t feel financially independent, 3 in 10 (31%) are optimistic they will be in the future, while 54% don’t think they’ll ever be able to pay their bills without help.
The majority (92%) of financially independent Americans say they only started to feel that way once they reached the age of 36.
Money talks are important
Among parents surveyed, many linked communicating about finances to achieving financial independence, with 57% saying they regret not having more money conversations with their children while they were growing up. In fact, 3 in 5 parents (60%) say if they could turn back the clock and do things differently, they would have made financial literacy a priority.
Although many believe their kids should be able to pay their own bills and expenses by age 23, 40% of parents with adult children aged 20 or older currently support them financially. More than half (53%) are dipping into their retirement savings to do so and 49% say they live with their children to help manage expenses.
Methodology:
This random double-opt-in survey of 2,000 general population Americans was commissioned by Empower and fielded by market research company OnePoll between December 11 and December 12, 2023.
