How Much Money You Need To Be Considered Wealthy

Since the dawn of commerce, many of the world’s greatest thinkers have debated what it truly means to be rich. Some measured wealth in freedom, others in happiness, purpose, or time. But alongside those philosophical definitions sits a far more concrete one: the income and net-worth thresholds that determine who, exactly, qualifies as “rich.”

If you’re looking for a by-the-numbers benchmark, the answer is somewhat easier to define — albeit with a few caveats. 

Wealth is relative, after all: A salary that signals affluence in one city might barely register in another, and a seven-figure net worth can fund a life of luxury for one person and simply a comfortable retirement for another, depending on where you live and how you spend.

How Much Money Makes You Wealthy?

Still, researchers and economists have spent years trying to quantify what it means to be wealthy in America. According to Charles Schwab’s latest Modern Wealth Survey, Americans say it now takes an average net worth of $2.3 million to be considered “wealthy,” which is down from $2.5 million — an 8% reduction — from the previous year. 

But the answer doesn’t simply end there. Age also plays into the equation. While millennials and Gen-Xers agree that having $2.1 million in the bank makes you rich, baby boomers set the bar a bit higher at $2.8 million. Gen Z, meanwhile, is happy with $1.7 million as that benchmark — making it clear that generational opinions on money differ. 

Of course, the Modern Wealth Survey isn’t the only yardstick out there. Other analyses, including the U.S. Census Bureau, look at figures like household income to delineate levels of wealth. In those cases, salaries of $170,000 to $190,000 generally put people in the top 20% of earners, while $650,000 to $700,000 per year is enough to land you in the top 1%.

Yet again, however, the numbers tell only part of the story. Surveys consistently find that even many high-income Americans don’t actually feel rich, due to factors such as inflation, debt, housing costs, and the phenomenon known as “lifestyle creep,” which is when you spend more as you earn more, often without even realizing it. In other words: Being wealthy on paper doesn’t necessarily make you feel wealthy in real life. 

What Makes People Feel Wealthy

Much like those philosophers of yore, today’s high-net individuals have their own definitions of wealth, which aren’t always tied to how much money is in their investment portfolio.

According to Schwab’s Modern Wealth Survey, when asked to explain what makes them feel “wealthy,” nearly half of respondents — 45% — declared happiness as a clear indicator. Surprisingly, just 44% pointed to the amount of money they have. (Physical health, mental health, and strong personal relationships were some of the other metrics mentioned.)

“The concept of wealth can feel distant, abstract, or even aspirational, while financial comfort is something people might see as more tangible and associated with the everyday realities they’re facing right now,” Rob Williams, CFP, managing director of financial planning at Charles Schwab, said in a press release. “It can be hard to navigate these concepts side by side in the form of short- and long-term financial goals. But both are important when it comes to understanding and managing your full financial life.”

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