6-Figure Salaries Don’t Feel Like They Used To — Here’s What Experts Are Noticing
Not so long ago, hitting a six-figure salary felt like making it big. But today, six figures doesn’t go as far as it used to. Between rising costs and lifestyle creep, $100,000 and up can feel like just enough to get by.
Experts explained why and what people can do about it.
Find Out: 4 Simple Ways To Get More From Every Paycheck
Learn More: Start Growing Your Net Worth With Smarter Tracking
Why a 6-Figure Salary No Longer Feels Like High Income
As wages and costs have both climbed, the meaning of six figures has “passed a point of change that no one is addressing publicly,” according to Cody Schuiteboer, president and CEO of Best Interest Financial. “Namely, the U.S. median household income in 2024 is roughly $80,000 and heading towards $90,000 in most major metros.”
A single earner at $100,000 is now barely above the household median in terms of income and yet considered by society to be a high-income individual.
Put another way, according to Zac Brown, regional vice president with Primerica Financial Services, “Since COVID, some statistics show that $100,000 is only worth around $80,000 today.”
The Core Expenses That Are Eating Away at 6 Figures
While general inflation plays a role, Schuiteboer said a handful of specific costs are doing most of the damage.
Housing is a big one, with mortgages and interest rates staying higher.
“A household making $100,000 with $73,000 net income loses 20% of their take-home income solely due to this factor,” Schuiteboer said.
“Auto and homeowners’ insurance has seen in some parts of the country an increase in premiums upwards of 40%,” while childcare has become “the equivalent of another mortgage,” Brown said.
Many households don’t even notice some increases right away. Brown has clients on autopay who don’t realize it until their costs exceed $700 monthly.
Where You Live Can Make or Break a 6-Figure Salary
Geography plays a big role in whether a six-figure salary feels comfortable or strained.
In high-cost areas like San Francisco or Manhattan, six figures “is truly middle to lower middle class,” Schuiteboer said. In contrast, the same salary stretches much further in lower-cost cities, where disposable income “can be two and a half to three times greater,” he said.
Lifestyle Expectations Raise the Bar
While rising costs are inevitable, lifestyle expectations can amplify the squeeze.
Brown highlighted the costs of conveniences, saying, “We are in the era of delivery services, subscriptions.”
Schuiteboer argued that “the idea that six-figure earners should cut down the lattes they drink is completely misguided and misses the point.” Instead, he pointed to larger spending decisions, like “a $50,000 SUV rather than the $30,000 sedan” or “$4,000-a-month ‘nice’ neighborhood instead of a $2,800 more affordable neighborhood.”
Why 6-Figure Earners Feel Financially Stuck
Six-figure earners often fall into a financial gray area as well, earning too much for assistance but not enough to feel secure.
Brown called this the “squeeze zone,” where households “do not qualify for tax credits and subsidies” but still struggle to build long-term stability.
At the same time, taxes and deductions significantly reduce take-home pay. Schuiteboer noted that once federal taxes, FICA, state taxes and health insurance are accounted for, “$100,000 becomes about $62,000 to $66,000 of actual income,” before major expenses like housing are even paid.
What 6-Figure Earners Can Do To Stay Ahead
Despite the challenges, building wealth on a six-figure salary is still possible, but it requires more intentional decisions than it once did.
The most successful are those who maximize their retirement savings, keep housing costs to no more than 28% of their gross income, drive paid-off vehicles and front-load their savings rate while avoiding lifestyle creep, Schuiteboer said.
Brown recommended people automate their savings starting at 10%. Though he added that “if you are wanting to expedite retirement or build wealth faster, 15% to 20% should be the goal.”
Six figures may still sound like a financial milestone, but in today’s economy, how you manage that income matters more than the number itself.
This article was provided by MoneyLion.com for informational purposes only and should not be construed as financial, legal or tax advice.
More From MoneyLion:
How Middle-Class Earners Are Quietly Becoming Millionaires — and How You Can, Too
7 Kirkland Signature Items at Costco Worth Buying This Spring
4 Financial Decisions Young Adults Make That Are Hardest To Undo
