Despite earning $100,000 or more annually, a significant number of Americans consider themselves working class or middle class rather than affluent, according to surveys by Insider and Morning Consult, and The Wall Street Journal. This phenomenon is driven by a rising cost of living that has eroded the purchasing power of six-figure salaries. For example, a salary of $100,000 a decade ago now requires approximately $129,000 to maintain the same purchasing power due to a cumulative inflation rate of about 29% between 2013 and 2023. These high earners often face substantial financial pressures, including housing affordability, retirement savings, healthcare costs, and childcare expenses.
A Wall Street Journal poll indicates that economic anxiety is impacting even those traditionally considered financially secure. Many respondents in the six-figure income bracket reported feeling stretched, with concerns about not having saved enough for a comfortable retirement and skepticism about future economic opportunities for younger generations. Lauren Fichter and her husband, earning $350,000 annually, illustrate this, struggling to save enough for their children's college expenses, which can reach around $75,000 per student per year. Even with a home and a vacation rental property, they find themselves unable to fully cover these costs, requiring their son to seek student loans and scholarships.
Factors contributing to this sentiment include high housing costs, particularly in metropolitan areas, which have seen significant increases in home prices, insurance premiums, property taxes, and mortgage payments. Other elevated expenses such as vehicles, childcare, education, and home maintenance further strain budgets. Additionally, "lifestyle creep," where non-essential expenses increase with income, and the burden of student loans taken out to qualify for high-paying jobs, prevent many from feeling financially secure. Over half of Americans earning more than $100,000 reportedly live paycheck-to-paycheck, highlighting that income alone no longer guarantees a feeling of wealth or financial stability.
