Important Takeaways:
- Why a $100,000 income no longer buys the American Dream in most places
- The American Dream — which for many people involves some combination of owning a home, getting married, having kids and making enough after expenses to save for retirement and spend on leisure — is becoming increasingly expensive.
- “The benchmark of a six-figure salary used to be the gold standard income,” Sabrina Romanoff, a clinical psychologist, told CNBC. “It represented the tipping point of finally earning a disposable income and building savings and spending based on your wants, not just your needs.”
- A new report from GOBankingRates used that framework to analyze how much money a family of two adults and two children would need in each state to own a home, a car and a pet. The report tallied estimated annual essential expenses for such a family and then doubled that figure.
- Using that framework, GoBankingRates found that all 50 states require more than a $100,000 annual income, according to the report, with 38 states needing more than $140,000.
- “Now people making well over six figures are still living paycheck to paycheck,” Romanoff said. “So what used to symbolize financial freedom is now keeping people stressed about making ends meet.”
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