Individuals earning seven figures a year typically have a high-income lifestyle, enjoying various luxuries and financial flexibility. This income level can afford a spacious home, luxury cars, high-end travel experiences, fine dining, and the ability to invest in diverse assets.
According to the US Census, about 16% of American households make between $100,000 and $149,999, 9% of households make between $150,000 and $199,999, and another 12% earn $200,000 or more. But those percentages represent total household incomes where 2 or more people in the home might be working.
Facts and Stats About Americans Making More Than Six Figures (Editor's Choice): 13% of American workers aged 15 and above made more than 100k in 2021. The annual income of over 34% of American households exceeds $100,000. In the five years to 2022, American households earning over $100,000 a year increased by 2.9%.
While earning 10 figures is very rare for the average person, extremely successful business owners and other influencers can earn this much in a year or over several years. In fact, many women who have become billionaires started from nothing and are entirely self-made, including Oprah Winfrey and Sarah Blakely.
Person needs nearly six figures to live comfortably
The study found that a person needs an average of $96,500 for sustainable comfort in a major U.S. city.
Is $100,000 Salary a Middle Class Income? This depends on your household size and location. For a single individual, $100,000 would actually put you in the upper-income level in most places. For household sizes between two and four, $100,000 a year would put you squarely in the middle class.
If you're single and earning $200,000 a year, chances are you're able to afford a comfortable life. That level of income is more than three times what the average American worker makes each year. Of course, your cost of living, inflation, and financial obligations also factor into how far the money goes.
Some workers begin earning six figures in their twenties and thirties. Economists nickname them HENRYs, for “high earners, not rich yet.” But for most people, their “peak earning years” are from age 35 to 54. The majority of people who make six figures will do so in their 30s.
Introduction to seven figures
Such income levels are rare, with only about 0.3% of Americans earning a million dollars or more per year.
A gross annual income of $150,000 per year equates to a $576.92 daily salary. This calculation assumes you're working 40 hours per week and eight hours per day. SoFi Relay offers users the ability to connect both SoFi accounts and external accounts using Plaid, Inc.'s service.
That said, corporate lawyers generally stand to make the most and can pull in seven figures a year — if they make partner. For example, according to ALM Global's 2023 Global 100 Ranked by Profits Per Equity Partner, the global law firm Kirkland & Ellis LLP pays their equity partners $7.52 million annually.
If you are making $170,000 a year, you are significantly more well off than the average American — the national median household income is $74,580 per year, according to U.S. Census data.
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.
In 2022, the national middle-income range was about $56,600 to $169,800 annually for a household of three. Lower-income households had incomes less than $56,600, and upper-income households had incomes greater than $169,800. (Incomes are calculated in 2022 dollars.)
Check Out: What Is the Median Household Income for the Upper Middle Class in 2024? Now, there are plenty of places you could live where $200,000 in yearly earnings is considered middle class.
In 2023, around 5.4 million people between 25 and 34 years old whose annual income was 100,000 U.S. dollars or more obtained that income through wages and salary.
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The old benchmark $100,000 salary that once placed Americans into the category of “rich” is coming up short, according to a new report by PYMNTS and LendingClub. As of November, 62% of all U.S. consumers were living paycheck to paycheck, with 20% struggling to pay their bills every month, the report says.
Those will become part of your budget. The 50-30-20 rule recommends putting 50% of your money toward needs, 30% toward wants, and 20% toward savings. The savings category also includes money you will need to realize your future goals.
Depending on the size of your family or household, an $80,000 salary may comfortably cover your living expenses. If other people in your household, such as children, depend on your income, consider how much it costs to pay for their living expenses in addition to your own.
A Rocket Mortgage online tool finds that it costs $50,000 in Los Angeles to maintain the standard of living that a mere $34,674 would buy you in Phoenix.