It takes $2.8M to feel wealthy in DC, new survey says. But what does a financial planner think? #NewsUnitedStates

An annual wealth survey by Charles Schwab found the average answer among D.C.-area consumers when asked the net worth it takes to feel wealthy is $2.8 million — higher than the average answer nationally of $2.5 million. D.C.-area consumers said a net worth of $968,000 is enough to be financially comfortable, higher than the average answer nationally of $778,000.

Nationwide, when asked if they think they will be wealthy within their lifetimes, 21% said they are on track. And Americans in general give themselves passing grades for how they plan to get there.

Among all of those surveyed, 50% said they are either on top of their finances now, or on track to be. When asked how prepared they will be for retirement, 67% gave themselves a grade of A, B or C. But 86% of those with a solid financial plan already in place gave themselves a passing grade.

“One of the many important takeaways from the survey is that the grades are actually much higher among those who have a financial plan in place, and that is not a surprise to me,” said financial planner Daniel Stein, Schwab branch manager in Tysons and Alexandria, Virginia. “People who have chosen to engage in a planning conversation with an adviser, they are armed with more education around the action they can take to build wealth and feel financially secure.”

Those with a financial plan were more likely to give themselves a passing grade across measures of personal finances, including 86% on current investments, 88% on retirement preparedness and 92% on personal finance education.

As for that $2.8 million sweet spot, would that be enough to be wealthy in retirement in D. C.? That entirely depends on the person or couple.

“As an example, for a single person with modest expenses who intends to retire at 70, $2.8 million might be far more than they need. But for a couple that has four children they’re funding college for and want to retire at 55 and travel extensively, $2.8 million might not be enough,” Stein said.

Having a financial plan does not necessarily take a financial planner, but it makes it easier. Especially since retirement planning is about more than how much money has been saved.

“Social Security, Medicare, when to take retirement fund money, balancing factors Even before that, looking at things like long-term care in retirement, and decisions along the way like the taxability of their assets,” Stein said.

Sitting down with a financial planner is as helpful for those with modest to no current savings as it is for wealthy individuals. And, while it is never too early to start, Stein said it is never too late either.

“Never too late” can include people who are approaching their retirement years or even beginning retirement, Stein said, adding that it can be when planning is the most crucial.

“That concept of thinking you’ve waited too long and you’ll just wait longer can be pretty detrimental, so it is absolutely never too late to start planning,” he said.

Full results from Schwab’s 2024 wealth survey are online.

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