All objects have a stress limit depending on the material used, which are presented as material yield or ultimate strengths. If steel has a yield limit of 40,000 psi, any stresses above this limit result in some form of permanent deformation. If a design is not supposed to deform permanently by going beyond yield (most cases), then the maximum allowable stress in this case is 40,000 psi.
You can calculate a factor of safety as the ratio of the maximum allowable stress to the equivalent stress (von-Mises), when using Yield Strength. It must be over 1 for the design to be acceptable. (Less than 1 means there is some permanent deformation.) When using Ultimate Strength, Maximum Principal stress is used to determine safety factor ratios.
Factor of safety results immediately points out areas of potential yield. Equivalent stress results show red in the highest area of stress, regardless of how high or low the value. A factor of safety of 1 means the material is essentially at yield. Most designers strive for a safety factor of between 2 to 4 based on the highest expected load scenario. If some areas of the design go into yield it does not always mean part failure, unless the maximum expected load is frequently repeated. Repeated high load can result in a fatigue failure, which is not simulated by Autodesk Inventor Simulation Stress Analysis. Use engineering principles to evaluate the situation.