Here's why even Americans making more than $100,000 live paycheck to paycheck (2024)

FAQs

Here's why even Americans making more than $100,000 live paycheck to paycheck? ›

More than half of Americans earning over $100,000 a year live paycheck to paycheck. So what's going on? Many experts point to a phenomenon called lifestyle inflation as one of the culprits. Lifestyle inflation, or lifestyle creep, is the pattern of spending a little more as a person's income increases.

According to PYMNTS Intelligence, 62% of U.S. consumers now live paycheck to paycheck, and that includes 48% of consumers earning more than $100,000 annually.

It found that 62% of all consumers now live paycheck to paycheck, including 36% of those whose annual incomes exceed $200,000. PYMNTS Intelligence has tracked paycheck-to-paycheck data for nearly four years.

A majority, 65%, say they live paycheck to paycheck, according to CNBC and SurveyMonkey's recent Your Money International Financial Security Survey, which polled 498 U.S. adults. That's a slight increase from last year's results, which found that 58% of Americans considered themselves to be living paycheck to paycheck.

One possible explanation is that they may have less incentive to save than the average consumer as they are more confident about their job prospects and are less likely to switch jobs. As inflationary pressures have subsided from their July 2022 peak, high-income consumers have rapidly increased discretionary spending.

Professor Alex Bryson of UCL — a leading expert in employment studies — suggests that the top quarter of US workers are able to take more advantage of market-set wages. “Workers have high bargaining power because of their skill set — and incentive-based pay is much more common,” he says.

While six figures represents a respectable salary in most of the U.S., $100,000 won't get you very far in big cities like New York, where the cost of living is extremely high.

The U.S. Census Bureau found that 37.1% of U.S. households earned at least $100,000 in 2022. Here's a more detailed breakdown of six-figure income brackets and the percentage of households in each one: $100,000 to $149,999: 16.9% $150,000 to $199,999: 8.7%

Feelings of financial insecurity among Americans have reached their highest point in at least a decade. A third of American adults in Northwestern Mutual's 2024 Planning & Progress survey said they don't feel financially secure. That's up from 27% in 2023 and the highest measure going back to 2012.

What paycheck is considered rich? ›

You'll need to earn more than half a million annually to be considered among the highest earning residents in 11 states and Washington, D.C.

As of May 2023, more than 1 in 5 Americans have no emergency savings.

A $200,000 household income is more than most people earn across the U.S. In fact, just 12% of U.S. households earn $200,000 or more annually, according to Census Bureau data.

The average American household now owes $7,951 in credit card debt, according to the most recent data available from the Federal Reserve Bank of New York and the U.S. Census Bureau. But that's just the average.

Eight out of 10 adults in America have at least one credit card, and 48% of them carry a balance within a given year (meaning they don't pay their credit cards down to zero each month, so they have credit card debt). That's over 100 million people with this kind of debt.

According to the newest survey, only 44% of U.S. adults say they would pay an emergency expense of $1,000 or more from their savings.

"Paycheck to paycheck" is an informal expression describing someone's inability to pay for living expenses if they lost their income. People living paycheck to paycheck are sometimes referred to as the working poor. Living paycheck to paycheck can occur at all different income levels.

What does living paycheck to paycheck mean? living paycheck to paycheck occurs when a person's income is devoted to expenses, which means that little to no money is put in savings.

Most Americans Are Still Struggling Post COVID-19

Contrarily, the wealthiest 20% of households still maintain cash savings at approximately 8% above pre-pandemic levels. Ultimately, with inflation taken into account, the majority of Americans are worse off financially compared with before the start of the pandemic.