$100,000 income: No big deal anymore

5 secrets of negotiating raise
By Jean Chatzky

There's something about the figure "$100,000" that just has a magical ring to it. Since the 1980s, a $100,000 income has been a benchmark of financial success. It used to buy a nice house in a posh neighborhood, two cars in the driveway, family vacations, college tuition for the kids and a fair level of luxuries.

Only about 20 percent of American households even break the six-figure mark, according to Census Bureau data. But while many Americans still see that number as a prized income, it doesn't necessarily roll out the red carpet anymore. Due to the rising costs of food, energy, college tuition, health insurance and the growing "necessities" of a middle-class life, a $100,000 salary in some parts of the country covers little more than the essentials.

A six-figure salary is still a great income, but the quality of life it provides is highly dependent on geography, family size and lifestyle. Making a six-figure salary as a single person in Houston is drastically different from raising a family of four on $100,000 in Boston.

Here are five reasons why that prized income no longer buys the high-end lifestyle it once did.



"Everyone spent money on these things 30 years ago, but they're spending a higher percentage of their income on it now, especially housing, health care and tuition," says Mari Adam of Adam Financial Associates in Boca Raton, Florida.

While the cost of everything has gone up, Americans still equate the six-figure milestone to wealth and prosperity. But according to the Bureau of Labor Statistics inflation calculator, for a person to have the same purchasing power in 2014 as a $100,000 income earner in 1980 did, he or she would need to earn nearly $287,000.

"If $100,000 income doesn't even buy half of what it once did, it makes you wonder about people living on the median income (of $51,939)," says Adam. "It underlines the fact that times are getting tougher for everyone."


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