Why six figures might not mean what it used to
Whether you’re just starting out or you’ve been working for years, you might have thought that once you hit that six-figure salary, you made it: you could eat out at fancy restaurants, shop designer brands, and take several vacations each year. But more than half of six-figure earners are now finding that their salary doesn’t stretch as far as they thought it would, according to a recent report.1 With rising costs and changing values, the six-figure “success” story isn’t the reality for most anymore.
The cost of living keeps climbing
Even though your income may have inched upward every year, somehow, it seems, your money always runs out before the month is over. Years of inflation have raised the price of groceries, gas, and other necessities at a faster pace, crushing the six-figure dream. For example, today’s prices are at least 24% higher than at the start of 2020.2 Home prices for one, have played a big role in the rising cost of living, growing much faster than incomes over the last 40 years. Between 1985 and 2023, the median household income in the US grew 241% to $80,610. The median price of houses sold in the country climbed 408% over the same period, reaching $428,600 in 2023.3
Child care costs, which are climbing faster than most people’s incomes, are putting serious pressure on family budgets and forcing many households to rethink how they spend. For some families, child care regularly equals at least 50% to 70% of what they pay for housing, making it one of the biggest monthly expenses they face.4 Health care costs keep rising too, with organizations expecting a 10% jump in 2026 — up from the 8% increase employers projected for 2025 — so everyone, including those earning six figures and higher, are feeling the squeeze as more of their paycheck gets eaten up by essentials.5
For the biggest bang for your buck, location matters
How far your six figures goes also depends on where you live. A $100,000 salary looks very different in high-cost metropolitan areas versus other parts of the country. A 2025 analysis by LendingTree found that a family earning six figures in many American cities could still end up struggling to pay bills. In fact, more Americans live in cities where making six figures is considered “middle income.” And the range is wide: middle-class starts at roughly $36,000 in Mississippi to nearly $200,000 in Massachusetts and New Jersey.
Mounting debt makes it harder to get ahead
The more debt you’re carrying, the harder it is to get ahead or even stay afloat if you’re hit with an unexpected medical, car, home repair, or other bill that eats into your disposable income and squeezes your budget. If you’re already having a hard time making ends meet, those unforeseen costs can stretch your six figures even further. A single unexpected bill can wipe out savings, push expenses onto credit cards, and force you into choosing which essentials to scale back. In fact, our research found that about 20% of Americans would have to borrow to pay a medical bill above $999, and about 68% would have to borrow to pay a medical bill above $9,999.6
Redefining success: it isn’t just about salary
What it means to be successful is evolving — today’s definition leans more into well-being, balance over burnout, mental health, and purposeful work rather than a big paycheck. The latest Mind, Body, and Wallet® report also suggests that the key to better financial wellness — and higher overall well-being — is about better financial habits and planning ahead, not just about having more money.
Navigating this new reality
Since it’s clear that a six-figure salary isn’t what it used to be, what can you do if earning more isn’t an option at the moment? The good news is that feeling more in control doesn’t always come from a bigger paycheck and often starts with building better money habits. Simple steps like using budgeting tools, living within your means, and planning ahead with a financial advisor like me can go a long way in improving your financial wellness. They also help you shape your own definition of success — one that’s based on stability, confidence, and what matters most to you.
Disclosure:
1 Michael Baynes, The New Reality of Being "Well-Off, Clarify Capital, February 2026 https://clarifycapital.com/the-new-well-off
2 Sarah Foster, Inflation stayed steady last month as Trump’s tariffs hit some prices — here’s what might feel most expensive, Bankrate, August 2025
https://www.bankrate.com/banking/federal-reserve/latest-inflation-statistics/
3 Felix Richter, House Prices Outpaced Income Growth Over the Past 40 Years, Statista, May 2025 https://www.statista.com/chart/34534/median-house-price-versus-median-income-in-the-us/?srsltid=AfmBOoqLVakGzHR5M2q29UquKO6MEL9G4iys94vb3yC8pAdhMzYZ7_JQ
4 Kyle Ross and Kennedy Andara, Child Care Expenses Push an Estimated 134,000 Families Into Poverty Each Year, The Center for American Progress, October 2024 https://www.americanprogress.org/article/child-care-expenses-push-an-estimated-134000-families-into-poverty-each-year/
5 Kathryn Mayer, Employers Project 10% Jump in Health Care Costs for 2026, SHRM, September 2025 https://www.shrm.org/topics-tools/news/benefits-compensation/employers-project-big-jump-health-care-costs-2026
6 Guardian's 2025 Mind, Body, and Wallet® report, Guardian Workplace Benefits Study, 2025 https://connect.guardiangroupbenefits.com/l/503851/2025-05-06/724fdd/503851/17465615037Zdyi3RI/Guardian14thAnnualWBS_Mind_Body_Wallet_2025.pdf
Material discussed is meant for general informational purposes only and is not to be construed as tax, legal, or investment advice. Although the information has been gathered from sources believed to be reliable, please note that individual situations can vary. Therefore, the information should be relied upon only when coordinated with individual professional advice.
"Financial advisor” / “advisor” is used generally to describe insurance/annuity and investment sales and advisory professionals who may hold varied licensing as insurance agents, registered representatives of broker-dealers, and investment advisory representatives (IAR) of registered investment advisors, respectively. Only those representatives who use Advisor in their title or otherwise disclose their status and meet the necessary licensing or registration requirements provide investment advisory services.
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