When Miriam got her first job offer with a $100,000 salary, she cried tears of joy.
The now 30-year-old spent the earliest years of her career working in nonprofits, earning as little as $25,000. Reaching six figures seemed life-changing.
But after a few paychecks, the novelty wore off, and Miriam, who asked to be referred to by her first name only to protect her privacy, says her lifestyle did not change in any significant way. After taxes and other deductions, she takes home around $2,500 per paycheck, enough to cover her bills in San Francisco and contribute to her 401(k).
“Getting a $100,000 salary was like getting a Fulbright scholarship. This unattainable, life-changing thing,” she tells Fortune. “And I materially feel different than when I made $70,000. But somehow you just sort of settle in, and that becomes normal. Within the first two months I was like, wait what? I thought there’d be a huge pile of money in my checking account.”
Where Miriam, who now works in a nontechnical role at a tech company, feels the biggest difference is in her retirement account—which she acknowledges is a privilege in today’s economy. But it’s hard to fathom the impact of contributing 8% of her paycheck to her 401(k) when she can’t tap into it for so long.
Intellectually, she knows she’s better off than she was before. But day-to-day, not much has changed. If an unexpected bill came up, her 401(k) savings isn’t much help (or shouldn’t be, according to financial planners who advise against tapping into those accounts until retirement).
Despite earning what many would consider a dream salary, Miriam still can’t afford some of the things, like a house, that used to be reflective of a middle-class life—particularly in the city she calls home. While she expected to be able to substantially increase her savings on a six-figure salary, some months, she can’t afford to put anything extra into her emergency fund.
Miriam acknowledges her financial struggles are less severe than what many other Americans face; she doesn’t worry about how she’ll pay all of her bills each month, and she lives in an apartment and city she loves. But living in one of the most expensive cities in the country means her six-figure salary doesn’t stretch much further than that.
She can’t help but feel like it’s not enough to reach all of her goals—and she’s not alone in that feeling: Households earning more than $100,000 a year saw the biggest drop in financial well-being compared with a year ago, according to a new poll from Morning Consult.
A six-figure salary has long been a goal for many workers—a marker of success and achievement. But as Miriam’s experience shows, while it’s above the U.S. median income of $70,784, it’s no longer enough to feel financially secure in many parts of the country, and not even enough to buy a house. Now, some high-earners tell Fortune they’d have to earn much more to actually feel like they’re getting ahead. The American dream is a lot more expensive than it used to be.
‘The standard has shifted’
Of course, there are any number of factors that affect whether a six-figure salary is enough to live comfortably, including location, family size, financial obligations, and other goals—$100,000 in San Francisco is not the same as $100,000 in Detroit. But there’s no question that wherever you live in the U.S., $100,000 doesn’t go as far as it used to.
In 2000, $100,000 would have the purchasing power of $175,000 today, says Nicole Gopoian Wirick, founder of Prosperity Wealth Strategies. And in some cities, $300,000 is the new $100,000, according to personal finance site Smart Asset. Wages have not kept up as the cost of living and inflation in the U.S. have soared, and Americans feel that most acutely in the biggest budget items: housing, food, and transportation.
“In 2000, you probably lived very comfortably” once you hit six figures, Gopoian Wirick tells Fortune. Now, “$100,000 doesn’t go as far as we feel it should.”
It’s in line with how retirement goals are changing. While $1 million was a savings target for many workers for many years, that figure is now much higher.
That’s doubly concerning, considering young people today are shouldering more costs than their parents did in many cases, says Isabel Barrow, financial planning director at Edelman Financial Engines. Few workers are offered pensions anymore, putting the onus for saving for retirement entirely on the worker. Then there’s the sky-high cost of housing and childcare, not to mention ever-growing student loan debt. Even when millennials do hit six figures in income, they have so many other expenses that they’re still living paycheck to paycheck.
For those who are able to save, that leaves less for other goals—or simply to have a little fun.
“When you take into account savings, a 401(k), health care, and rent, you’re not left with a whole heck of a lot," says Barrow. “Taking vacations and not feeling like you’re on a shoestring budget, that’s tough even on a six-figure income these days.”
Evan, who works in sales at a tech company outside Philadelphia, earning $152,000 a year, doesn’t even have enough to remodel his kitchen.
“Doing something like fixing up your home or renovating your kitchen is seen as some huge, decadent thing, when in reality, it shouldn’t be that crazy to want to update something that’s 50 years [old],” the 34-year-old tells Fortune. “Now, anything beyond just getting by or enjoying subtle luxuries is thought of as a bigger achievement than it really should be.”
Like Miriam, Evan’s biggest lifestyle change as he moved up the salary ladder was to contribute more to his retirement accounts. He’s allowed himself one luxury—using earnings from a Dogecoin investment to buy a Tesla, the first new car he’s ever owned.
Evan, who asked to be referred to by his first name so he could talk openly about his earnings, says the growing wealth disparity in the U.S. now makes it difficult for any but the very rich to afford seemingly basic things. While he earns three times the median for Philadelphia, he still can’t imagine what it would take to save substantially for something like college, should he and his wife have children.
“The standard has shifted,” he says. “Should I feel grateful that I can actually save? That should be a given. We should all make enough to live a comfortable life. That shouldn’t be as privileged as it is now.”
Affording peace of mind
Saving for his kids’ college education is also a major stressor for Joseph, a 33-year-old living in Virginia who earns $150,000 per year as the CFO of a small company, plus equity. Joseph, who also asked to be referred to by his first name for privacy reasons, supports his wife and three children, with another on the way.
His wife stopped working when their first child was born; childcare was too expensive for the dual-income family, a problem many families face across the U.S. Without her income, Joseph says, it’s a struggle to make the math work on things like family vacations and buying a home big enough for a soon-to-be six-person household.
“If you really wanted to pay for all of these three kids’ college, it’s crazy that $150,000 is not even enough for that,” says Joseph.
Miriam, Evan, and Joseph all acknowledge they’re lucky to earn as much as they do. Their lives are certainly easier than they were when they made less; all three said they worry less about what they buy at the grocery store than they used to, for example. They are able to sock some money away for retirement, and, in theory, they’re on track to earn more if they keep moving up in their careers.
But for Miriam, the biggest letdown of attaining her six-figure salary goal is that it doesn’t bring the comfort and peace she thought it would. She can afford most of what she needs—rent, retirement contributions, groceries—but not much of what she wants.
“I had really, really high expectations for what life would feel like,” she says. “And there is a bit of lifestyle creep. But I’m living in the same place I was, I haven’t upped my shopping really. It doesn’t have staying power like I thought it would.”
