A typical U.S. family needs annual income of $145,000 to thrive, study finds. About half fall short.

The Urban Institute recently released a report that sheds light on the economic struggles faced by many Americans. According to their research, about 49% of Americans fall short of the annual income needed to cover their basic needs. In order to be considered economically secure, a U.S. family with children needs around $145,000 in income.

The median household income for married couples in the U.S. in 2024 was $128,700, according to U.S. Census data. This data highlights the significant gap between the income needed for economic security and the actual income of many households.

The Urban Institute’s analysis identifies the key ingredients for economic security, which include having enough money to cover expenses such as adequate food, clothing, housing, healthcare, child care, transportation, postsecondary education, student loan repayments, savings for emergencies and retirement, as well as additional costs for personal care products.

Despite having good-paying jobs, many Americans still struggle to make ends meet, as rising prices continue to put pressure on their finances. This has led to a situation where individuals feel like they are stuck in a “hamster wheel economy,” where they are unable to get ahead financially.

Earning above the $145,000 annual income threshold is crucial for individuals to feel financially secure and be able to invest in their families and communities. This not only allows for a sense of autonomy but also enables parents to dedicate more time, energy, and money to their children’s well-being.

The analysis by the Urban Institute aligns with a viral Substack post by Wall Street strategist Michael Green, who argued that the government’s official poverty line of $33,000 for a family of four is significantly lower than the actual amount needed to afford necessities like housing, childcare, and food. Green’s calculation suggests that Americans earning less than $140,000 should be considered poor due to their inability to cover basic expenses.

The research also highlights that certain demographics, such as single-parent households, renters, and older households, are more likely to fall below the economic security threshold. Single-parent households, for example, have one of the lowest rates of economic security, with about 90% below the proposed threshold.

In conclusion, the findings from the Urban Institute’s report underscore the challenges faced by many Americans in achieving economic security. By understanding the income needed to cover basic needs and addressing the disparities in access to economic security, policymakers can work towards creating a more equitable society for all.