Miriam cried tears of joy when she received her first job offer with a salary of $100,000.
Now 30 years old, she spent the early years of her career working for nonprofits and earning just $25,000. Reaching six figures seemed to change her life.
But after a few paychecks, the novelty wore off, and Miriam, who asked to be called by her first name just to protect her privacy, says her lifestyle hasn't changed much. After her taxes and other deductions, she takes home about $2,500 per paycheck, enough to cover her bills in San Francisco and contribute to her 401(k).
“Getting a $100,000 salary was like getting a Fulbright scholarship. This is unattainable and life-changing,” she says. luck. “And I feel like I've materially changed from when I made $70,000. But somehow it just kind of settles down and it becomes normal. Within the first two months, I said, ' I was like, “Wait, what?” I thought I would have a huge amount of money sitting in my checking account. ”
Miriam, who now works in a non-technical job at a tech company, feels the biggest difference is in her retirement benefits, which she admits is a privilege in today's economy. But it's hard to gauge how much of an impact contributing 8% of her salary to her 401(k) will have when she won't have access to it for so long.
Intellectually, she knows her life is better than before. But her day-to-day life hasn't changed much. Her 401(k) savings aren't (or shouldn't be) of much use if there's an unexpected bill, her financial planner says.
Despite earning a dream salary for many, Miriam still She can no longer afford some of the things that once reflected middle-class life, such as housing, especially in the city she calls home. She had hoped that her six-figure salary would allow her to significantly increase her savings, but some months she can't afford to put additional funds into her emergency fund.
Miriam acknowledges that her financial hardship is not as severe as that faced by many other Americans. She doesn't worry about how to pay her monthly bills and lives in an apartment and city that she loves. But she says she lives in one of the most expensive cities in the country, which means her six-figure salary won't grow any further.
I can't help but feel like I'm not good enough to achieve all my goals. She's not alone in feeling that way. According to the study, households with annual incomes of more than $100,000 experienced the largest decline in financial well-being compared to a year ago. Morning Consult's new poll.
A six-figure salary has long been a goal for many workers, as an indicator of success and accomplishment. However, as Miriam's experience shows, although incomes exceed the U.S. median income of $70,784, in many parts of the country it is no longer enough to feel financially secure and leave home. Not even enough to buy.Now, some high-income earners say this. luck You have to earn more to feel like you're actually getting ahead. The American Dream is now much more expensive than it used to be.
“Standards have changed.”
Of course, there are many factors that influence whether a six-figure salary is enough to live comfortably. This includes location, family size, financial obligations, and other goals. His $100,000 in San Francisco is not the same as his $100,000 in Detroit. But no matter where you live in the United States, there's no question that $100,000 isn't what it used to be.
The purchasing power of $100,000 in 2000 would reach $175,000 today, says Nicole Gopoin-Wyrick, founder of Prosperity Wealth Strategies. And in some cities, $300,000 becomes the new $100,000, according to personal finance site Smart Asset. Wages have not kept pace with rising costs of living and inflation in the United States, and Americans are feeling this most acutely in the largest budget items: housing, food, and transportation.
“In 2000, if you hit six figures, you were probably living very comfortably,” says Gopoan-Wyrick. luck. Now, “$100,000 isn't going to go as far as we expect.”
This is consistent with changes in retirement goals. While $1 million in savings has been a goal for many workers for years, that number is now much higher.
This is doubly alarming given that today's young people are often bearing more costs than their parents, said Isabel Barrow, director of financial planning at Edelman Financial Engines. He says it's a thing. With few workers eligible for pensions anymore, the responsibility for saving for retirement falls entirely on the worker. Add to that the rising costs of housing and childcare, not to mention ever-increasing student loan debt. Even when millennials reach their six-figure incomes, they continue to live paycheck to paycheck because they have many other expenses.
For those who can save, there is less left over for other goals or just to have a little fun.
“Once you factor in your savings, 401(k), medical expenses, and rent, you don't have that much left over,” Barrow says. “It's hard these days to take time off and not feel like you're living on a shoestring budget, even though he has a six-figure income.”
Evan, who works in sales at a high-tech company in suburban Philadelphia, makes $152,000 a year, but doesn't have enough money to even renovate his kitchen.
“Repairing your home or renovating your kitchen is seen as something grand and decadent, but in reality, it's not that crazy to want to update something that's 50 years old. It's not.” [old]'' says the 34-year-old man. luck. “Anything more than simply getting by and enjoying small luxuries is now considered a much greater accomplishment than it should be.”
Like Miriam, Evan's biggest lifestyle change as he moved up the salary ladder was to increase his retirement contributions. He allowed himself his one luxury. He plans to use the proceeds from his Dogecoin investment to buy his first new car, a Tesla.
Evan, who asked to be called by his first name so he can speak candidly about his income, said the widening gap between rich and poor in the U.S. means that people other than the ultra-wealthy are now unable to buy seemingly basic items. says that it has become difficult. Although he earns three times the median income in Philadelphia, he still can't imagine how long it would take to save up enough money for college and other expenses if he and his wife were to have a child.
“The standards have changed,” he says. “Should we be grateful for actually being able to save money? That's only natural. We all have to earn enough money to live a comfortable life. We shouldn't be as privileged as we are now. It won’t.”
give a sense of security
Saving for his child's college education is also stressful for Joseph, a 33-year-old Virginia resident who earns $150,000 a year plus stock as the CFO of a small business. Joseph, who also requested to be referred to by his first name for privacy reasons, supports his wife and three children, with another on the way.
His wife quit her job when their first child was born. Child care is too expensive for working families, and many families across the country face this problem. Joseph says it's difficult to do the calculations. – Must be a household of 6 people.
“It’s crazy that even $150,000 isn’t enough if we really wanted to pay for all three of our kids’ college tuition,” Joseph says.
Miriam, Evan, and Joseph all acknowledge that they are lucky to earn this much. Their lives are certainly easier than they were when they earned less. For example, all three said they worry less about what they buy at the grocery store than they used to. They can save money for retirement and are theoretically on track to earn even more if they continue to advance in their careers.
But for Miriam, the biggest disappointment of reaching her six-figure salary goal is that it doesn't bring her the comfort and peace she thought it would. She can afford most of the things she needs, including her rent, retirement, and groceries, but she doesn't have much she wants.
“I had really, really high expectations for what life was going to feel like,” she says. “And there's also a bit of a lifestyle change. But I'm still living in the same place as before, and I haven't increased my shopping as much. It doesn't have as much staying power as I thought it would.”
