Sabrina Romanoff, Clinical Psychologist talked with CNBC on the salary expectation in the country. Is $100,000 a good salary in the USA? According to her, $100,000 income in the USA was once considered a target where you had enough extra income for savings and spending on wants, not just needs. However, the American Dream which consists of buying a home, having a marriage, and children, and saving for retirement, is getting costlier day by day.
Is $100,000 A Good Salary in the USA?
A 2023 CNBC Your Money survey conducted by SurveyMonkey showed that over half of Americans, 52%, feel they’d need a minimum $100,000 income in the USA yearly to feel financially secure. Out of these, 26% believe they’d need between $100,000 and $149,000 annually.
Elise Gould, senior economist at the Economic Policy Institute said that living costs have been increasing over the last 50 years. For many families, achieving that middle-class lifestyle, the American Dream, is getting harder, and a $100,000 income in the USA might not be enough.
Consumers following the 50-30-20 budget rule aim to use 50% of their income for essentials, 30% for discretionary spending, and the remaining 20% for savings.
A recent report by GOBankingRates analyzed the costs for a family of two adults and two children owning a home, a car, and a pet in each state. The report added up estimated yearly essential expenses for such a family and then doubled that amount.
According to the findings, all 50 states require having more than $100,000 income in the USA. So is $100,000 income enough in the USA? Morever, 38 states in the USA were projected to need more than $140,000 in income to sustain life.
Economists pointed out that the income growth is being substituted by debt usage. With student loan debt hit a high of $1.77 trillion in the first quarter of 2023, and Americans collectively owe $1.13 trillion on their credit cards as of the fourth quarter of 2023.
This debt can have far-reaching effects, particularly when entire generations begin their adult lives burdened with thousands of dollars in debt. Romanoff said that nowadays even people with having $100,000 income in the USA find themselves living paycheck to paycheck. So what once represented financial freedom now leaves many struggling to make ends meet.
To answer the question is a $100,000 salary good enough in the USA? The answer seems no. Data from the Bureau of Labor Statistics shows that today, you would need to earn around $129,000 to have the same purchasing power as a $100,000 income in the USA a decade ago.
This is due to the average annual inflation of about 2.6% between 2013 and now, resulting in a cumulative rate of around 29%. The impact of your dollar depends on your cost of living, influenced by factors like lifestyle, household size, and especially, location.
However, one thing is for sure having $100,000 income in the USA in cities like New York City is quite different from earning the same amount in Memphis, Tennessee.
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