Why a high income doesn't always mean strong financial health

A high salary can give someone more financial options. But it doesn’t automatically give them the knowledge, confidence or behaviors to make the most of their money.

Financial health is shaped by more than income. It’s about understanding your finances, feeling prepared for what’s ahead, and being able to make informed decisions and take action as circumstances change.

Research shows why that distinction matters.

A 2024 PYMNTS Intelligence study of U.S. consumers found that 48% of consumers earning more than $100,000 a year were living paycheck to paycheck as of January 2024.

The finding makes an important point; earning more doesn’t necessarily remove financial pressure or the need to actively manage your financial health.

And for employers, that means financial health support shouldn’t be designed only for employees who appear to be struggling.

High income doesn't automatically mean financial confidence

It's easy to assume that employees with higher salaries or greater wealth need less financial support.

But having more money can bring different decisions rather than fewer ones.

Employees may be thinking about retirement, investing, taxes, estate planning, insurance, education costs, workplace benefits, or how different financial decisions fit together. And having the resources to make those decisions doesn't necessarily mean someone has the knowledge or confidence to make them.

Recent U.S. research helps illustrate the point.

The 2025 Charles Schwab Modern Wealth Survey, based on 2,000 Americans aged 21 to 75, found that people believe it takes an average net worth of $839,000 to feel financially comfortable, up from $778,000 in 2024.

The research also found that Americans define wealth through more than the amount of money they have. Respondents pointed to factors including physical and mental health, relationships, life experiences, accomplishments, and free time.

That reinforces a broader point; financial resources alone don't tell us how financially healthy someone feels, or whether they're prepared to make the decisions ahead.

More money can mean more complex financial decisions

Higher earners can face increasingly complex financial choices.

Retirement contribution limits, investments, equity compensation, tax, insurance, and estate planning can all require decisions that have significant long-term consequences.

Time can be another challenge.

Research discussed by economist Professor Daniel Hamermesh explores the relationship between income and time; higher earners can experience greater time pressure because their time has a higher opportunity cost.

For employers, that's an important consideration.

The answer isn't necessarily to give employees more financial information. It's to make relevant information easier to understand, personalize it to their circumstances and help people identify the actions that matter to them.

Debt isn't only a low-income issue

Debt is another area where assumptions about income and financial health can be misleading.

People across income and wealth levels use debt for different reasons; from mortgages and education to credit cards and other borrowing.

What matters isn't simply whether someone has debt. It's whether that debt is manageable within their wider financial situation and whether they understand the choices available to them.

nudge's 2023 global financial health research found that three in four high-net-worth respondents had debt, while one in five of that group said they were struggling with their debts.

That reinforces an important point; employers shouldn't assume financial need based on salary alone.

Investing can create another confidence gap

Investing can be an important part of long-term financial planning, but it also involves decisions around risk, time horizons, diversification, and personal goals.

Periods of economic uncertainty can make those decisions feel even harder.

nudge's 2023 global financial health research found that 65% of high-net-worth respondents said they felt impacted by inflation.

Rather than assuming higher earners already know how to respond to changing economic conditions, employers can help people build the knowledge, and confidence to understand their options and make informed decisions for themselves.

That's particularly important when employees are navigating several parts of their financial lives at once; from workplace retirement plans and benefits to personal savings and investments.

Financial health support should be for everyone

The bigger lesson is simple; you can't determine someone's financial health from their paycheck.

Employees bring different levels of financial knowledge, confidence, experience, and responsibility to work. They also have different priorities depending on where they are in life.

That's why a one-size-fits-all approach to financial education can miss the mark.

The opportunity for employers is to provide support that helps every employee understand where they stand, navigate the financial decisions relevant to them, and take action.

Personalize the experience

Someone building their first emergency fund doesn't need the same information as someone deciding how to manage equity compensation or prepare for retirement.

Personalized financial education can meet employees where they are; using their needs, goals, and circumstances to make financial information more relevant and actionable.

Make financial education easy to access

People learn differently and have different amounts of time available.

Articles, short-form content, interactive tools, live education and other formats can give employees different ways to engage. The important thing is making it easy for people to find relevant support when they need it rather than expecting them to search through large amounts of generic information.

Help people turn knowledge into action

Financial health doesn't improve simply because someone has been given more information.

The goal is to help employees understand their options, make informed decisions, and take action; then continue doing so as their lives and financial needs change.

nudge's 2023 global research found that employees with employer-provided access to personalized, frequent financial education were 66% more hopeful about their finances, 41% had increased their savings, and had a 34% stronger understanding of their employee benefits.

The research doesn't prove that financial education alone caused those outcomes, so the findings are best understood as an association between access to frequent, personalized financial education, and stronger financial outcomes.

Better financial health starts with the individual

Income matters. So do savings, assets and access to workplace benefits.

But none of those things tells the whole story of someone's financial health.

Whether an employee earns $40,000 or $400,000, they still need to make decisions about their money. What those decisions look like will be different; the need for relevant information, confidence, and support remains.

For employers, that means moving beyond assumptions about who needs financial education.

By combining personalized financial education, intelligent technology, and human expertise, organizations can help employees understand their finances, navigate their workplace benefits, and make better financial decisions; whatever their income, circumstances or stage of life.

Want to explore what stronger financial health could look like across your workforce? Download the report.