Americans think you need $2.2 million to feel wealthy - but the actual figure is much lower

It's an age-old question guaranteed to prompt debate: how much money do you truly need to feel wealthy?

A new study shows that Americans think the magic figure is $2.2 million - yet the actual answer is surprisingly much lower creating a 'paradox' in how households view their finances. 

The Modern Wealth Survey by investment firm Charles Schwab found that respondents assumed they would need millions to be considered wealthy.

However the average net worth of somebody who 'felt' rich was actually just $560,000.

And surprisingly the data reveals that Millennials were most likely of any generation to feel rich. 

The average net worth of workers in each generation who said they 'felt wealthy'

The Modern Wealth Survey by investment firm Charles Schwab found that the average net worth of somebody who 'felt wealthy' was $560,000

Some 57 percent of those in this cohort - aged between 26 and 41 - said they felt wealthy. The average net worth of a millennial who felt rich was $531,000. 

Meanwhile 46 percent of the Generation Z individuals - aged between 21 and 25 - surveyed said they felt wealthy, with a net worth of $414,000 on average. 

Around 41 percent of Generation X - those between 42 and 57 - said they felt wealthy. On average those in this cohort who felt rich had $410,0000 to their name. 

Only 40 percent of Boomers - aged 58 to 75 - said they felt wealthy. But their threshold for wealth was higher than any other cohort - on average $692,000.

Charles Schwab surveyed 1,000 across the country to compile the findings. 

When it ran the research in 2021, it found Americans considered $1.9 million enough money to feel well-off.

However, amid red hot inflation and the increased cost-of-living, this figure shot up to $2.2 million in 2022 - where it has remained this year. 

Rob Williams, managing director of financial planning and wealth management at Charles Schwab, told Bloomberg: 'There’s this paradox of people defining wealth differently for themselves versus others.

'When you ask someone for a dollar amount, they don’t put it in the context of the rest of their life and financial health.'

The findings also revealed that how wealthy individuals feel is heavily influenced by their peers.

Almost half of respondents said being able to afford a similar lifestyle to their friends made them feel wealthy, while more than a third use social media to compare their lifestyles to others. 

What's more, respondents said that 'wealth' didn't just cover finances. Two thirds said having healthy relationships equated to wealth rather than just money.

And 70 percent said 'wealth' simply meant not having to worry about money - rather than having a large bank account. 

The findings come after financial experts repeatedly raised the alarm over America's so-called 'retirement crisis.'

Dailymail.com recently revealed how droves of retirees were being forced back to the workplace after inflation and soaring living costs hammered their savings. 

An estimated 1.5 million retirees re-entered the labor market in the year up to May 2022, according to an analysis of Labor Department data by Indeed economist Nick Bunker for The Washington Post.

This is a reversal of the trend that saw millions of people fleeing the workforce during and following the Covid-19 pandemic.

According to a study by payroll services company Paychex this year, one in six retired Americans are now considering going back to work.

Of those surveyed - who had been out of work for an average of four years - 53 percent said it was due to financial pressure.