What it Takes to Feel 'Financially Comfortable' in Major US Cities
San Francisco, seen here, is one of the places where survey respondents said people need a net worth in the millions to feel financially comfortable. iStock.com/tifonimages
A survey asked residents in 12 metro regions about the net worth people need to feel financially comfortable or wealthy. It's a lot.
The amount of wealth that people think is necessary to be "financially comfortable" in a dozen regions in and around major U.S. cities is well into the six figures in most places and up over a million dollars in three of them, according to survey results a financial services firm released this week.
Among the places that Charles Schwab's 2021 Modern Wealth Survey looked at, the average net worth for someone to be financially comfortable in the San Francisco Bay Area is the highest at $1.3 million, based on the findings. On the upside for people whose assets are a bit shy of that amount, the figure fell from $1.5 million in 2020. Net worth refers to the value of someone's assets after accounting for amounts that they owe.
The average net worth threshold to feel financially comfortable in and around Los Angeles is $1.2 million and in Boston it is $1.1 million. In both of those places the figure ticked up compared to 2020, by about $262,000 and $228,000 respectively.
On the bottom of this list was Phoenix, where survey respondents indicated that it takes a net worth of merely $631,000 to be feeling financially comfortable. That figure slipped by $42,000 from 2020. Denver ($635,000) and Dallas ($642,000) were in the same ballpark.
Charles Schwab's survey also looked at what level of net worth it takes to be "wealthy" in different places. There again San Francisco topped the list at $3.8 million. The Bay Area was followed by Seattle ($3.1 million), Los Angeles ($3 million), New York ($2.9 million) and the District of Columbia ($2.9 million).
The company's report also includes national statistics. These figures show that, nationwide, Americans lowered the mark for the average net worth it takes for someone to be wealthy. It fell to $1.9 million this year, from $2.6 million in 2020. The national financial comfort figure also dropped—to $624,000 from $934,000.
The average net worth for all U.S. families in 2019 was about $748,800, according to a bulletin the Federal Reserve published last year. But that figure varied widely based on age, race and other characteristics.
For instance, for white families it was $983,400, while for Black families it was $142,500. For homeowners it was around $1.1 million but for renters $95,600. When net worth among Americans is broken into percentiles, those in the group that fall within the bottom quarter have an average net worth of negative $13,500.
People responded to the Charles Schwab survey online during February. Results for the metro areas are based on responses from 500 to 750 people living in those places. The national sample includes 1,000 adults. More information about the survey can be found here.