How do Americans define personal financial prosperity?

Homeownership has long been considered the quintessential marker of financial well-being, but that may be changing. Americans now consider being able to afford a comfortable retirement as the key indicator of their financial success, according to a new AICPA survey.

Twenty-eight percent of the 1,010 respondents in the survey, which was conducted by Harris Poll for the AICPA in March, named having a comfortable retirement as the best sign that they had “made it.” That’s more than twice the percentage of those who chose homeownership (11%) as the top indicator of financial success. Twenty-three percent chose being able to provide a debt-free education for their children as the top sign, and 11% named being better off than their parents.

Americans are optimistic about their chances for financial success, the survey found. While only 21% of respondents said they had achieved this state, an additional 52% said they thought they were capable of doing so.

Many respondents appeared to be on the right track to improving their finances, with 85% stating they had taken steps to do so after the recession:

• 58% had started a monthly budget.
• 50% put less spending on their credit cards.
• 44% started saving or increased their savings.
• 35% started or increased an emergency fund.
• 32% began saving for retirement or added to their retirement savings.

The AICPA National CPA Financial Literacy Commission suggests that Americans who want to improve their financial well-being set financial goals, pay off debt, and create a budget and monitor it at least weekly. The commission also recommends avoiding bad money habits such as not having an emergency fund, only saving money that is left over after other expenses have been dealt with, and not asking for help.

—Courtney L. Vien (cvien@aicpa.org) is an associate editor for the AICPA.