A six-figure income used to be a hard-earned sign of success, but due to skyrocketing costs and inflation, $100,000 doesn’t have the cachet it once had. Crunching the numbers for standard inflation, it would take $172,000 in 2011 dollars to match a $100,000 salary in 1990.
“What would have cost you $100,000 in 1976 would cost you $381,000 today,” said Mari Adam of Adam Financial Associates to Bankrate. “That’s just the inflation, and there are so many other things that have grown very expensive.” Adam notes that health care, college tuition and housing have become significantly more expensive over the past 30 years, diminishing consumers’ purchasing power even further.
Our standards have living have also evolved to include cellphones, high-speed Internet, sports lessons, laptops, video game consoles, vacations and other luxuries that weren’t an option for the standard household in the 1980s. Let’s also not forget how location drives up costs: the average household earning $100,000 would need to earn $166,500 in San Francisco and $228,300 in New York City to have the same purchasing power and overall lifestyle.
What’s the new magic figure for success? Bankrate declares that many consider $250,000 the new $100,000. Do you agree?
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