- Wages are rising, yet it's not enough in the face of soaring inflation.
- Americans now say they need to be making roughly double the national average to feel financially healthy.
Rising prices have already taken a toll on how many Americans feel about their finances.
Even as the economy recovers and employers roll out wage increases to attract and retain workers amid an ongoing labor shortage, most workers say it's not enough in the face of soaring inflation.
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In 2022, companies expect to give their employees another 3.4% raise as the competition for talent intensifies.
But that may not cut it either.
Americans now say they need to be making roughly $122,000 a year to feel financially healthy, more than double the national average, according to a report from financial services website Personal Capital.
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The 2022 Wealth & Wellness Index found that how people feel about their financial health is largely determined by their income, as well as the amount of debt and savings they have.
With inflation already taking a bite out of the wage gains from 2021, most workers said that increasing expenses and not getting paid enough are preventing them from shaking off the effects of the Covid pandemic.
Despite notching the first real wage gains in years, Americans must now contend with a higher cost of living, which is growing at the fastest annual pace in about four decades.
That's leaving most people with less cash on hand to cover groceries, gas and everyday expenses and weighing on their confidence in the overall economic picture.
The University of Michigan's closely watched index of consumer sentiment recently slumped to around its lowest level in a decade.
"The labor market is strong and retail growth is ticking upwards, but we're also dealing with recent market volatility and record high inflation," said Craig Birk, Personal Capital's Chief Investment Officer.
"It's unsettling for many," he said.
Further, a growing number of Americans are influenced by what they see on social media, Birk said, which may set unrealistic expectations for what they should earn or have.
"The key, regardless of income, is to know where you stand," he added, including how much you should save for retirement and how to live within your means.
"There are people who make $50,000 and are in great shape and people who make ten times that who won't be able to do what they want to," Birk said.