Americans are optimistic about their financial future. According to Charles Schwab’s eighth annual Modern Wealth Survey, many believe they are in a better position to achieve their financial goals compared to previous generations.

The report examines how people in the U.S. think about saving, spending, investing and wealth. It found that over 60% of respondents in various regions are more confident about achieving their financial goals. This optimism is due to improved financial technology, increased access to investments and more diverse opportunities to build wealth.

In addition, the analysis found that the majority of Americans are currently investing, with younger generations starting earlier. Nearly half of respondents believe they enjoy a better lifestyle than their parents did at the same age and feel more competent in managing their investments.

Confidence in investment strategies has been high across generations. The availability of financial advice and knowledge as well as the ability to easily research companies and investment vehicles are cited as the main reasons for the increased investment optimism.

Despite the optimistic outlook, respondents said the high cost of living and housing prices were the main obstacles to reaching their financial goals. In addition, less than a quarter of Americans believe they currently have their finances “under control.”

However, when it comes to their personal finance skills, many respondents gave themselves high marks in areas such as debt management and spending within their means.

The survey found that people who have financial plans tend to rate themselves better in various aspects of financial management, including saving, investing and retirement planning.

The magic number

The Modern Wealth Survey also provided insight into national perceptions of wealth. Americans, on average, believe that in 2024, one will need a net worth of $2.5 million to be considered wealthy, up 14% from last year’s $2.2 million. For financial security, the national average is $778,000, up from $1 million last year.

The number varies depending on location and age

The threshold varied considerably by generation and geographic location, with baby boomers and residents of expensive neighborhoods such as San Francisco having higher standards of wealth.

In the San Francisco Bay Area, residents believe it takes a net worth of $4.4 million to be considered wealthy, which is 43% higher than the national average. To feel financially secure, San Francisco residents say a net worth of $1.5 million is needed.

In Southern California, including Los Angeles and San Diego, the threshold to be considered wealthy is $3.9 million, which is 26% higher than the national average. To feel economically stable in Southern California, a net worth of $1.2 million is required.

In terms of generations, Baby Boomers believe the wealth limit is $2.8 million, while Generation X puts it at $2.7 million. Notably, Millennials have a lower limit of $2.2 million, and Generation Z sees $1.2 million as the lowest wealth limit.

Financial objectives

According to the Charles Schwab study, only 36% of Americans have a documented financial plan. Of those who do have a plan, almost all (96%) express confidence in their ability to achieve their financial goals.

For Americans without a financial plan, the biggest obstacle is not having enough money, while Generation Z is held back by the belief that creating a plan is too complicated.

One of the most common financial goals Americans are working toward is creating a practical budget. Data from Bankrate shows that about 13% list better budgeting as their main goal for 2024.

People also value saving more money (15%), especially for emergencies, while paying off debt remains an important goal for many, especially given the high levels of credit card debt nationwide.

Another important goal is retirement planning, as many Americans are assessing their retirement savings needs and want to begin or increase their retirement savings.

In a survey by Bankrate Financial Security, 74% of respondents said they consider owning a home to be the pinnacle of the American dream, and many are focused on saving for a down payment on a home.

In today’s economy, financial success is defined not by millionaire status, but rather by a comfortable lifestyle, say nearly 60% of Americans. This can be achieved by increasing earning potential through career advancement or education.