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Study Reveals How Much Money You Need to ‘Thrive’ in Today’s Economy
By Adam Hardy MONEY RESEARCH COLLECTIVE
Half of American families earn below the six-figure threshold needed to truly thrive financially.
Thriving — in this economy? For most families, new research finds, it requires a six-figure income.
In order to fully participate in today’s economy and be “primed to thrive,” families need to earn between $96,000 and $150,000 per year, depending on the number and age of the family members living at home. For singles without children, it’s about $64,000.
The findings are part of a study released Monday by the Urban Institute, an economic policy think tank. The group created a measure to gauge what it costs for families to “thrive, not just survive.”
“Conventional economic measures like the poverty rate or unemployment rate don’t really speak to the struggles millions of families are facing,” Mary Cunningham, senior vice president of research at Urban Institute, said during a webinar about the study on Tuesday.
To account for this, the study considered a holistic group of factors in its analysis, such as expenses for food, health care, child care, clothing and saving for retirement, as well as income from employment, benefits, cash transfers, tax credits and more. The measure was designed to reflect a realistic picture of earnings and expenses for a typical family.
Whether Americans meet this new measure of financial stability is a coin toss. The Urban Institute says 49% of Americans earn less than the amount needed for economic security based on their family’s composition.
By contrast, the latest data from the Census Bureau shows that the typical household earns about $84,000 — far below Urban’s lowest threshold — and only 10.6% meet the official definition of poverty.
Parents are in survival mode
The picture is especially bleak for parents. Urban’s findings suggest most families with children are simply treading water.
It takes $144,700 for a two-parent family with children to be considered financially stable, but median earnings for those households are $133,400. Overall, 56% of parents don’t meet Urban’s threshold.
Single parents are faring much worse. A single parent with one child needs an income of $84,100 to achieve stability, but typical earnings are just $56,700. The gap widens the more children the single parent has. Almost 90% of single parents earn less than Urban’s threshold.
The study adds to a swelling body of research about the financial difficulties of raising children in the U.S.
In the latest American Family Survey, an annual study run by Brigham Young University, more than 7 in 10 Americans now say that raising kids is unaffordable, a major jump from 58% the prior year.
Of course, affordability is a universal concern right now, not just among parents.
“Americans are worried about paying their bills,” Cunningham said. “At best, many are just getting by when they really want to be getting ahead.”
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Adam Hardy is Money's lead data journalist. He writes news and feature stories aimed at helping everyday people manage their finances. He joined Money full-time in 2021 but has covered personal finance and economic topics since 2018. Previously, he worked for Forbes Advisor, The Penny Hoarder and Creative Loafing. In addition to those outlets, Adam’s work has been featured in a variety of local, national and international publications, including the Asia Times, Business Insider, Las Vegas Review-Journal, Yahoo! Finance, Nasdaq and several others. Adam graduated with a bachelor’s degree from the University of South Florida, where he studied magazine journalism and sociology. As a first-generation college graduate from a low-income, single-parent household, Adam understands firsthand the financial barriers that plague low-income Americans. His reporting aims to illuminate these issues. Since joining Money, Adam has already written over 300 articles, including a cover story on financial surveillance, a profile of Director Rohit Chopra of the Consumer Financial Protection Bureau and an investigation into flexible spending accounts, which found that workers forfeit billions of dollars annually through the workplace plans. He has also led data analysis on some of Money’s marquee rankings, including Best Places to Live, Best Places to Travel and Best Hospitals. He regularly contributes data reporting for Best Colleges, Best Banks and other lists as well. Adam also holds a multimedia storytelling certificate from Poynter’s News University and a data journalism certificate from the Investigative Reporters and Editors (IRE) at the University of Missouri. In 2017, he received an English teaching certification from the University of Cambridge, which he utilized during his time in Seoul, South Korea. There, he taught students of all ages, from 5 to 65, and worked with North Korean refugees who were resettling in the area. Now, Adam lives in Saint Petersburg, Florida, with his pup Bambi. He is a card-carrying shuffleboard club member.