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

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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.

Monmouth said the results reflect the difficulties many Americans are experiencing with the rapid inflation after the pandemic. Though inflation has cooled, the jump from before the pandemic has been significant.

Over one-third of American families earn $100,000 or more

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%

Even as housing and food costs rise, more affluent consumers report that essential spending represents a smaller fraction of their budgets than lower-income consumers. Discretionary spending on leisure, personal care and everyday transactions represents close to one-third of higher-income consumers' available income.

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.

A nation saddled with debt will have less to invest in its own future. Rising debt means fewer economic opportunities for Americans. Rising debt reduces business investment and slows economic growth. It also increases expectations of higher rates of inflation and erosion of confidence in the U.S. dollar.

The root cause was excessive mortgage lending to borrowers who normally would not qualify for a home loan, which greatly increased risk to the lender. Lenders were willing to take this risk, as they could simply package the loans into an instrument they sold, passing the risk on to investors.

At the end of 2022, 73 percent of adults were doing at least okay financially, meaning they reported either “doing okay” financially (39 percent) or “living comfortably” (34 percent). The rest reported either “just getting by” (19 percent) or “finding it difficult to get by” (8 percent).

What is considered rich in USA? ›

For example, you may be considered rich if you're in the nation's top 1% of earners. In 2022, that group saw an average annual income from wages of $785,968—nearly 19 times higher than the bottom 90%, according to the Economic Policy Institute Open in new tab.

Upper-middle class: $94,001 – $153,000. Upper class: greater than $153,000.

Making $100,000 a year is not common in the U.S. According to the U.S. Census Bureau, only 15.3% of American households make more than $100,000.

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.

What you earn (based on your wages or salary) is called your gross income. Employers withhold (or deduct) some of their employees' pay in order to cover payroll taxes and income tax. Money may also be deducted, or subtracted, from a paycheck to pay for retirement or health benefits.

Those living paycheck to paycheck devote their salaries predominantly to expenses. The phrase may also mean living with limited or no savings and refer to people who are at greater financial risk if they were suddenly unemployed or faced another financial emergency.

Sixty Percent of US Consumers Live Paycheck to Paycheck – That Could Change in 2024. Persistent inflation and increasing prices for essential items, from groceries and utilities to fuel, have left most Americans treading water financially in recent years.