Time for a New Income Benchmark: $100,000 Ain’t What It Used to Be

In 2004 my gross annual income crossed the magical $100,000 benchmark for the first time.

Reaching that milestone became a personal goal after graduating with an electrical engineering degree in 1988 and taking my first job at a salary of $31,000. At the time, I figured that once I was earning $100,000 per year, I’d be set for life, and able to buy whatever I wanted, whenever I wanted it.

The funny thing is, once I finally had that coveted six-figure salary, it wasn’t all I had hoped it would be. While I did have more spending power than those who weren’t earning $100,000 per year, I didn’t feel rich. I certainly wasn’t making enough money to stop worrying about how I was spending it.

Even today, with my income significantly higher than it was when I first crossed the $100,000 mark over eight years ago, I still don’t feel rich. Financially free, yes. But rich, no — especially after my paycheck deductions to cover taxes, the mortgage, the money I faithfully set aside for retirement, and my emergency funds.

True, I’m thankful to live in a nice, albeit very modest home, in a safe Southern California neighborhood. But the Honeybee and I still drive our old Hondas: a 2001 Odyssey and 1997 Civic, respectively. We also still shop at places like Costco and Target, cook most of our meals at home, and eat leftovers to save money.

Moving The Goal Posts of Success

The reality is, at one time, earning $100,000 annually used to be a sign of real wealth. The pinnacle of success. Not any more.

Clearly, I’m not the only one who feels that way either.

A recent poll by Gallup found that Americans essentially set the threshold for being “rich” at an income of $150,000 annually. Forty-seven percent of Americans — myself included — think the actual number is somewhere north of that.

Don’t get me wrong, earning $100,000 annually is nothing to sneeze at, and anyone earning six-figures is obviously better off than those who don’t. But it’s not all it’s cracked up to be.

That’s because the dreaded one-two punch of time and inflation has moved the goal posts. So much so that the importance of the old $100,000 measuring stick has been completely obliterated.

In fact, in order to have the equivalent purchasing power that came with a $100,000 salary back in 1988, one would have to have an annual income of approximately $181,892 today.

One example of how rising costs have made the $100,000 benchmark obsolete is the price of housing. According to the US Census Bureau, the median price of a home in 1988 was $112,500; by 2010 it was $221,800 — almost double.

The $100,000 Club Isn’t Very Exclusive Anymore

Of course, inflation has also increased salaries, and more people are earning $100,000 than ever before. But that only serves to further diminish the six-figure income mystique.

For instance, Census data shows that in 1992, approximately five percent of all households were earning at least $100,000 annually. However, by 2007, that figure had quadrupled to 20 percent.

The proof is in the pudding; jobs paying $100,000 or more per year are nowhere near as rare as they used to be 25 years ago. In fact today, they’re quite common.

A quick search over at Salary.com revealed an astounding 853 job titles with median salaries of $100,000 or more — and you definitely don’t have to be a brain surgeon (median salary: $473,854) or rocket scientist ($119,890) either.

Today, you’ll find corporate secretaries ($184,719) in the Hundred Grand Club hobnobbing with senior attorneys ($144,207), and regional chefs ($111,972) mixing it up with dentists ($133,757).

The Bottom Line

True, there are some places where an annual income of $100,000 will go a long way — but there are other places where it won’t.

No matter where you live, the bottom line is this: earning one-hundred grand a year certainly no longer has the cachet it once did. Sorry.

I think it’s finally time for a new benchmark, folks. Two-hundred thousand, anyone?

Photo Credit: US Treasury


  1. 1


    So true that inflation has worked to erode the value of the dollar or 100,000 of them. The same holds true for retirement savings. With the Federal Reserve pumping out the notes, better get used to it.

    • 2

      Len Penzo says

      Hard to argue that, considering that since 1988 the purchasing power of a dollar has been virtually cut in half. And my guess is the devaluation over the next 25 years will be at a much quicker clip!

  2. 3


    Wow Len! You sound just like me. Once we hit six figures I wanted more. However, I felt I was being greedy given the fact that my beginnings was humble. The more you make the more you want. After taxes, retirement and insurance you’re back to making 5 figures. So I will say $200K a year is a good target to strive for.

    • 4

      Len Penzo says

      If I stuck to my original goal, and taking inflation into account, I need to reach an income of $182k. Even that number wouldn’t make me feel rich though, Marie.

    • 6

      Len Penzo says

      I think $250k is getting warmer. If I was a single — it would definitely suffice. With a wife, two school-age kids and a dog, still not there yet.

    • 8

      Len Penzo says

      I’ll say! Since the Federal Reserve took over in 1913, the purchasing power of a buck has dropped 97 percent. I know.

  3. 9

    Wilson says

    I earn over $100k and I feel the same way you do. I think the benchmark today is $250k. Like you said though, it’s constantly moving. In 10 years it will be probably be $400k or more.

  4. 11


    Once you get past the worry of feeding your family and paying bills, the only difference would be making so much you don’t worry at all about what you spend.

    I, like you, have not reached that stage.

    Private jets and all that goes with them…. I can dream, but I don’t worry.

    • 12

      Len Penzo says

      That’s a good way to put it, Dr. Dean. My biggest worry is actually loss of my job. Since I work in a very cyclical (and at the moment, unstable) industry, I end up having to bank a good portion of my salary every year to build cash reserves as protection against a potential layoff. If I didn’t have a family to worry about, I probably wouldn’t set aside so much, and enjoy a little more of it.

      Sometimes I feel like the proverbial ant on steroids!

  5. 13

    Bill says

    Wow, now I feel even poorer than when I woke up this morning. Sure, $100k isn’t what it used to be. Now, see I live in Pennsylvania and have much lower taxes and a much much lower cost of living than So. Cal. I wonder if anyone has devised a conversion rate of California earned dollars to Pennsylvania earned dollars yet? Gasp.

  6. 15



    I think for me the benchmark is anything over 175K. I really liked your notes about inflation. SO many people focus on the numbers and completely forget about “buying” power. Sadly I think this trend is only gong to continue, especially once people start spending their excess capital and true inflation starts to take place.

    Congrats on crossing the threshold and thanks for “putting yourself out there” I’m sure you debated sharing this type of personal info. I think it only adds to your credibility.

    all the best.


    • 16

      Len Penzo says

      Thank you, AG. I’ve always tried to be as open as possible, so I really didn’t debate it too much. This time I think I struck a decent balance, being open, but without giving away exact details (which I think most people realize is for obvious reasons).

  7. 17

    Sam says

    Well said Len! My own post discusses 5 different income levels with $500,0000 as the level that is deemed rich.

    22 year old undergrads now make $100k out of school!

    • 18

      Len Penzo says

      What a way to start after graduating, huh?! Good for them!

      My starting salary in 1988 was the equivalent of $56k today.

      I would have needed to secure a starting salary of $55k in 1988 to have the purchasing power of $100,000 today.

  8. 19


    Several years ago, I had a job where I was making $75K and wow, did I feel rich! I don’t have children, though, which helped matters a lot. Since I only had to support myself and am paying a mortgage on a condo I bought in 1999, I was able to sock most of it away. That came in useful when I was subsequently laid off. Now I’m working for much less money.

    • 20

      Len Penzo says

      Good for you, Pamela! I know a couple people who also have wild swings in their annual income. It requires a lot of discipline from them to save up a good chunk of cash for rainy days during the good times.

      I just hope you didn’t burn through too much of what you were able to sock away.

  9. 21


    Sometimes I feel lucky that I picked a marketable degree in computer science and have made a decent living for myself. But still, I think the salary cap for a software developer is somewhere a little north of 100k in my area so it will still take me some time to reach that point.

    • 22

      Len Penzo says

      Remember, your salary may have a cap, but that doesn’t mean you can’t increase your income by doing things on the side!

  10. 23


    Well, as Yogi Berra said, “the future ain’t what it used to be”. I have a feeling we’ll settle on the often bandied ‘$200,000 for a single and $250,000 for a couple is a millionaire’ rhetoric which is in vogue, and not index it to inflation. Slowly, more and more people will find themselves in the ‘millionaire’ category, not knowing that they bought into the hype that’s now engulfing them.

    On that note, ‘millionaire’ isn’t all it’s cracked up to be anymore now, is it?

  11. 25

    Erik L says

    As true that it maybe that $100,000 in not what is used to be. I believe that it still a great attainable goal since the median family income in this country (regardless of what state you live in) is well below that. A majority of households would love to reach that benchmark some time in their lives.

    • 26

      Len Penzo says

      Absolutely, Erik. I believe the median household income in America today is approximately $50,000, so making $100,000 is still a very worthy goal everyone should be shooting for.

      It’s doesn’t work anymore though, when it comes to the old idea of $100,000 being used as a benchmark for real wealth. At least that’s my story — and I’m sticking to it! :-)

  12. 27


    I stopped thinking about my gross pay and focus on what I save. It is what I do with it that is important. I used to think how much I made was a scorecard. The more I made the more I felt successful and prosperous. The better measure is what I do with the money and how much I can put to work for me.

    • 28

      Len Penzo says

      Absolutely, KC. There are plenty of folks making over $100k who are much worse off than others making a fraction of that.

      You and I both know you can be financially free at virtually any income level. It eventually all comes down to how much you spend, as opposed to how much you make.

  13. 29


    I don’t think anyone ever gets that “feeling” that they are rich. when you think deeply about it the whole idea of rich/poor is determined by what others think it should be defined as. even the poverty line is not by our own definition by by the definition government gives it. I know a lot of people who would be defined as poor by that standard but they do not “feel” that they are poor.

    to me the whole concept is nothing but fodder for the promotion of class division and for political purpose.

    • 30

      Len Penzo says

      So true. Even that Gallup poll I referenced essentially found that folks generally would only consider themselves rich once they reached an income level around double what they were currently earning — even if they were already making over six-figures.

  14. 31


    So the $100K today deflates to about $55K in 1988. You’re ahead of inflation, and improved your situation, especially with the cost of money less than 1/2 what it was. I recall 30 year fixed was 9% in Apr 1987.

    You are right, $100K is not what it was when Andrew Tobias wrote his “Getting by on $100000 a Year.”

    • 32

      Len Penzo says

      I’d definitely believe the 9 percent figure, Joe. Funny how that seems almost unbelievable now.

      And Andrew Tobias is one of my favorite money writers.

  15. 33

    Debbie Van Doorne says

    I remember that when I was a kid, another benchmark was the concept of the millionaire. People who actually had a million dollars was still pretty uncommon and that was something to aspire to!

  16. 35


    When I was making $15/hour I dreamed of being rich and making $25/hour. When I passed that and still didn’t feel quite rich, I started to dream of being rich and make $100/hour. The scary part is that if I ever make that much, I fear that I still won’t feel rich. I made all the mistakes I could: my salary went up, my expenses went up, my life style changed. I think there are people who can be happy and feeling rich making 40K a year. And there are those who won’t ever feel rich no matter how much they make. It is all relative.

  17. 38

    TMS says

    I work on straight commission. My wife makes decent money, but went through a 6-month period of unemployment from late 2008 through mid-2009 – at the same exact time my income fell like a rock

    My experience is that as long as you live well beneath your means, there’s surprisingly little difference between $110K a year and $250K a year family income. Who’da thunk it.

    Once you start making real money; income taxes bite hard. Every time our income dropped, the lower tax burden made the drop much more tolerable.

    I’m thinking got-it-made territory for a middle age working family in flyover country is at least $350K, but ONLY if you REALLY control your expenses.

    • 39

      Len Penzo says

      Amen on the tax impacts, TMS. One of the biggest hits are the tax credits that get gradually phased out — especially as your income rises above $100k.

  18. 40


    Good points, Len. This totally applies to retirement savings as well. The amount that one can retire on has changed over the years, but I’m not sure that many people realize just how much. While wages increase, so do costs. Inflation is something we all know about, but often lose sight of.

  19. 41


    This post makes me sad only because I’m so close to hitting that six figure mark – and I really want to be there. Unfortunately, you’re right, it’s not that much. In fact, it wouldn’t really help me THAT much in my finances but it would be something. I think the number is more of a benchmark than anything else – once I hit it, I’ll be just trying to go for $150,000. Kind of sad but it’s a never ending cycle.

    • 42


      @Young Professional Finances — Cheer up! I don’t think that’s sad at all. I think you’re doing the right thing. It’s great to set incremental goals.

      If you run a 9-minute mile, you wouldn’t set a goal to run the 6-minute mile … you’d set a goal to run the 8 min, 30 second mile. And once you got that, you’d set a goal for the 8-minute mile. And so on.

  20. 44


    I think it largely depends on how many dependents you have. Are we talking about a $100K household income for a family of four? That doesn’t sound “rich” to me. But if we’re talking about $100K for a single person with no dependents, then — wow!

    • 45

      Len Penzo says

      No doubt the number of dependents you have makes a big difference, Paula! If it was just me or even me and the Honeybee, we’d be golden right now. Dare I say I would probably even consider myself rich. Probably.

  21. 46

    Money_Illusion says

    Well Len I make 1/2 of 100k and I feel I’m far wealthier than many of my co-workers and friends who make much more. We focused on being debt free and building a recession proof lifestyle. I have a ranch in Texas mortgage free which we bought many years ago. Drilled a water well, put in a septic system, I burn my own trash, planted a huge garden and fruit trees. My property taxes this year came to $108 (because of ag-exemption) yet the ranch is appraised for $500,000. Our house was paid for in cash (sold our house in the city & used the money for the 2nd house). The only thing I lack which I’m working on is adding solar power. I have no mortgage, no car payments (always bought used in cash), no water bill, no sewer bill, no trash pickup bill, low food bill, our electric bill usually comes in about $70 a month. My wife is a stay at home mom. We could probably live good on $400- $500 a month easy. While many of my friends focused on buying McMansions, new cars every few years and a high consumer lifestyle we went the opposite way and now are enjoying the pay off. My friends constantly worry about their debt and fear being laid off. Both spouses work just to make ends meet. An income goal (100k, 250k, whatever) may seem to be the answer to being financially wealthy I disagree. That’s only 1/2 of the equation. While your income was going up you should of focused on making your expenses go down. Most people don’t work on that part.

    • 47

      Len Penzo says

      That is absolutely beautiful, Money_Illusion. You’ve done a great job illustrating what it is like to be financially free. The best part is — and I say it here all the time — financial freedom is achievable at virtually any income level.

      Conversely, a million-dollar salary doesn’t automatically immunize anyone from becoming a slave to their creditors.

      People have written me who have five kids and a household income of $25,000 but still manage to make ends meet (and have little or no debt) because, as you’ve pointed out, they’ve learned how to keep their expenses low.

      Thanks for the great comment!

    • 48

      CRG says

      Money Illusion – you are a BadAss! Your story really fires me up!

      I mirror your statement “while your income was going up you should have focused on making your expenses go down.” I use a football analogy on this one (being a fellow Texan how else would I make the comparison?)…Income Generation is like playing Offense (scoring points) in football. Just as important if not more is PLAYING DEFENSE (Debt Abolishment AND Expense Minimization).


Leave a Reply

Your email address will not be published. Required fields are marked *