Most Americans Said They Didn’t Feel Financially Independent Until This Age
Written by
Gabrielle Olya
Edited by
Gary Dudak
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Being “financially independent” can be defined in a number of ways, but generally speaking, it means not relying on others to meet your financial obligations. While the majority of Americans (67%) believe that being financially independent is an important goal, nearly one-quarter (24%) of American adults haven’t reached this milestone, according to a new survey conducted by Empower. And for those who have achieved it, it took a while to get there.
Here’s a look at the age when most Americans believe they became financially independent — it’s older than you might think.
Many Americans Are Not Financially Independent Until Their Mid-30s
According to the Empower survey, the majority of financially independent Americans (92%) said they only started to feel that way once they reached the age of 36 — that’s nearly two decades after reaching adulthood. The state of the broader economy over the past few years could be to blame for this later age.
“Some economic headwinds facing Americans include volatility brought on by the pandemic, high inflation and mortgage rates, as well as rising prices,” said Keith Jones, senior financial professional with Empower. “Others are experiencing student loan repayments and debt, and these hardships can be challenging.”
Most Americans Still Rely on Others for Help
The survey found that over half of American adults (57%) 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%). In addition, among those who are not yet financially independent, 54% don’t think they’ll ever be able to pay their bills without help.
Defining Financial Independence
The survey also found that Americans have differing opinions on what financial independence really means. Definitions include not needing money from family and friends (47%), reaching a certain net worth (44%) or having a job they love (37%).
“Financial independence looks different to everyone,” Jones said. “Each person will define what ‘making it’ looks like for them based on their values and financial goals.”
What Salary Do You Need To Be Financially Independent?
The survey found that the average American believes they need to make upwards of $94,000 a year to be financially independent. However, Jones believes that becoming financially independent is impacted more by your spending and saving behaviors than how much money you make.
“It’s more important to focus on what you do with what you have,” he said. “Additionally, financial independence is more of a relative measure. Based on spending habits and savings goals, someone earning less than $94,000 may be able to live comfortably within this amount. By contrast, someone making twice this amount could still not achieve financial independence if their spending is not under control or if they’re experiencing lifestyle creep.”
Tips for Achieving Financial Independence
No matter what age you are, reaching financial independence can be achievable.
“It’s never too late to take steps to secure a brighter financial future,” Jones said. “Reaching financial freedom starts by defining what success looks like for you. Ask yourself what your financial goals are and why they are important. Establishing clear goals provides both direction and purpose, and creating a plan can help you work toward your definition of success — whether that is homeownership, retiring at a certain age or a combination of money goals throughout the journey of your life.”
Some immediate steps to take include prioritizing saving and paying down debt, Jones said.
“Even if you are only able to save incremental amounts each paycheck or pay down minimum amounts of debt, these are actions that can put you on the right path,” he said. “Strategic goals for most individuals include establishing and maintaining an emergency fund with three to six months’ worth of expenses and paying down your highest-interest debt, which is usually from credit cards. As you have more capacity to save more, you can then be more strategic about where and how to save.”
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