I can remember as a kid when Pete Rose made headlines as the first singles hitter to make $100,000 a year. That was in 1970. “Charlie Hustle” made eleven times what the average worker made. 100 grand. One hundred thousand dollars. A “six-figure” salary. That’s been the benchmark for financial success for a long time. Bring home that much money every year and you’ve made it. You can sit back and enjoy life. Nice cars, large house, plenty of vacations, and still have money left over and not worry about sending your kids to college and retirement.
A recent story by Bankrate.com may burst the bubble of those striving for the luxury they hope will come with that six-figure salary. Times have changed. Bankrate says standard inflation, the rising costs of housing, health insurance, college tuition, food, energy, and the necessities of a middle class life have “steadily eroded the real value of a $100,000 income … and that six-figure luxury has quickly turned into six-figure mediocrity.” More from Bankrate:
According to the U.S. Census Bureau, only 6.03 percent of individual over 18 and only 19.9 percent of households had incomes of $100,000 or more in 2010. In fact, the median annual household income for 2010 was $50,046, just more than half of the six-figure benchmark. The overwhelming majority of Americans still look up to a $100,000 income, but the expectations of what comes with that income are rapidly slumping.
Financial planner Mari Adam told Bankrate: “What would have cost you $100,000 in 1976 would cost you $381,000 today.”
I know what many of you are thinking, “I’d love to have the headache of making six figures.” I agree, it would be a nice problem to have. And the financial burdens of the vast majority making a lot less than that are much greater. But the point is, salaries haven’t kept up with the rapidly rising costs of living over the years, and that coveted six-figure income isn’t what it’s cracked up to be anymore.
Want a new benchmark for financial success? Bankrate says “many now consider $250,000 the new $100,000 income.”