How Much Americans Need for Financial Wellness

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Editor's Note: This story originally appeared on SmartAsset.com.

The key to financial wellness may be a cool half-million.

Though the factors determining financial stability may be different to each investor and retirement saver, a recent Empower Retirement and Personal Capital survey found that most Americans believe it takes having more than $500,000 in savings to become financially healthy.

The survey, conducted by The Harris Poll, interviewed 2,005 people across different age groups, racial and ethnic backgrounds, life stages and employment sectors to get their views on financial wellness.

$516,433: The Magic Number for Financial Wellness?

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The poll found that Americans’ views on financial wellness evolve as they progress through different phases of life or experience significant “perspective-changing events.” However, Americans feel the average amount of money it takes to achieve financial well-being is $516,433, according to the survey.

The survey found that Americans don’t feel financially healthy themselves until age 47. What’s more, they said age 49 is when they think other people feel financially healthy.

“While many Americans believe financial well-being is attainable, less than half say they’re financially healthy today,” the survey states.

From Broke College Grad to a Half-Million by Age 47

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So how does someone actually save $500,000 after starting with next to nothing? Consider a 22-year-old college graduate named Nicole.

Despite graduating with minimal debt, she starts out with just $100 to invest. Using SmartAsset’s investment calculator, she could determine exactly how much she’ll need to invest each year to reach her goal of saving over $500,000 by age 47.

Assuming an 8% annual rate of return, Nicole will need to invest $7,050 a year to have over $516,000 within 25 years. That means each month she’ll have to put aside $587 to invest.

Nicole’s ability to save at that rate, of course, depends on a number of factors, including her income, her expenses, her budgeting and the cost of living in her area.

Saving $500,000 Despite Starting Later

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Of course, not everyone can start investing straight out of college. Tens of millions of Americans are saddled with student loan debt and owe $1.73 trillion in total, according to EducationData.org.

Even if a college graduate cannot start investing until he pays off his loans, the person can still achieve the perceived level of financial well-being by age 47 by putting a greater emphasis on his savings rate.

Derrick, a 30-year-old college graduate who just finished paying off his student loans, has less time to invest than Nicole, so he’ll need to invest more money every year.

Starting with just $100 and averaging an 8% rate of return, Derrick will need to invest $15,300 each year or $1,275 per month to have more than $516,000 saved by age 47.

Again, this may be easier said than done, depending on Derrick’s expenses and earning potential.

Roadblocks to Attaining Financial Wellness

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For many Americans, saving and investing thousands of dollars a year can be daunting. The Empower Retirement and Personal Capital survey found that nearly 7 in 10 Americans face at least one roadblock in their financial lives, while the average person faces at least two.

Some 27% of respondents in the survey said not getting paid enough is the primary obstacle they face, while an additional 23% said having too many expenses is the main roadblock they face.

All told, 19% of people said they are “not in a place where I can save.”

But Americans are willing to take a helping hand. Nearly 80% of respondents said they need assistance optimizing their financial well-being, highlighting the need that financial advisers fill.

Of those people, 32% said they could use help paying off debt, while 30% said they want help building an emergency fund. The survey found that 28% of respondents said they need help with their investment strategy.

Bottom Line

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What financial wellness means to you will likely differ from the next person. But Americans on average think it takes more than $516,000 to become financially healthy.

By investing early and often, this savings goal is attainable. While a number of roadblocks can prevent ordinary Americans from reaching financial wellness, creating a plan and sticking to it can help them achieve success in investing. Expert financial advice can also help investors create a winning game plan.

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