Six-Figure incomes and Broke? (2024)

FAQs

Can you have a high income and be broke? ›

Rather than building wealth, a lot of these individuals are actually living paycheck to paycheck. This might seem strange when you consider the numbers on their own, but the truth is that it's very possible to become poor even when living on a higher salary.

Over half of Americans making six figures are still living paycheck to paycheck, too. Even with that $100,000 salary, tons of people don't have enough left over to save. So one unexpected expense or job loss means major financial stress, even for folks earning decent money.

A six-figure salary is anywhere from $100,000 to $999,999. It's called a “six-figure salary” because every number in this range has six digits. You might be thinking, 'That's a huge range. ' And you're right!

What Percent of America Makes Six Figures? When you remove demographics such as infants, students, and stay-at-home spouses and focus only on full-time workers, around 18% of all earners in the US make at least six figures. Conversely, the median American household income in 2023 was approximately $44,225.

The fact that you have have to stipulate that one can live without roommates and "all basic needs are met" with a $200,000 salary proves the OP's point. That's more than 6 times the median annual income in the US.

Pew Research considers middle class to be $56,000 to $156,000 for families of three. Thus, a family of three on $20,000 is not middle-class; it's actually below the poverty level. While an individual on $20,000 a year is not below the poverty line, they are still not considered middle-class.

According to the U.S. Census, only 15.3% of American households make more than $100,000 annually. A $100,000 salary can yield a monthly income of $8,333.33, a biweekly paycheck of $3,846.15, a weekly income of $1,923.08, and a daily income of $384.62 based on 260 working days per year.

Most American households have at least $1,000 in checking or savings accounts. But only about 12% have more than $100,000 in checking and savings.

Bottom Line. With $100,000 you should budget for a retirement income of around $5,000 to $8,000 on top of Social Security, depending on how you have invested your money. Much more than this will likely cause you to run out of money within 25 – 30 years, which is potentially within the lifespan of the average retiree.

The majority of people who make six figures will do so in their 30s.

Is a 6 figure salary good anymore? ›

A six-figure salary is no longer a guarantee of financial success — and it hasn't been for a while. With the cost of living in America rising still further, it's time to be strategic about the money you bring in.

How Many People Make 6-Figure Salaries in the US? A minority of Americans make over $100,000 a year. According to Zippia, roughly 33.6% of Americans make six figures annually. And 15% of those earn between $100,000 to $150,000.

Based on that figure, an annual income of $500,000 or more would make you rich. The Economic Policy Institute uses a different baseline to determine who constitutes the top 1% and the top 5%. For 2021, you're in the top 1% if you earn $819,324 or more each year. The top 5% of income earners make $335,891 per year.

$100,000 a year is how much an hour? If you make $100,000 a year, your hourly salary would be $48.08.

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.

Poor budget choices and failure to follow basic financial principles can send even the richest people with a high net worth into debt. Millionaires have more money than most of us can imagine. To put into perspective $1 million equates to 588 months, or 49 years, of the average rent price in America.

So, who are low-income, high net worth individuals? They are people who have over $1 million in investable assets, but earn below the median income for their area. They may have inherited their wealth, or built it over time through strategic investing and financial planning.

HENRYs are labeled the "working rich" as their rich status is largely attributed to their working income, not their accumulated wealth. HENRYs can move to wealth by reducing debt and increasing savings and investments.

High-income earners are the likeliest to say they lack good saving habits. 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.