Earning $100,000 a year isn’t enough to feel ‘rich’ in the US anymore

While currently based in Pennsylvania, Driver and her husband both work remotely, which allows them to broaden their home search across the US. However, Driver said they’ve still faced significant affordability challenges.

“We’re finding that even in a vast country like the US, housing options that align with our desires for green spaces, a somewhat metropolitan vibe, and cultural vibrancy are surprisingly out of budget,” she said. In addition to high home prices, elevated mortgage rates have propelled the cost of homeownership to record-high unaffordability levels.

Driver is among a group of Americans with six-figure incomes who are struggling to meet some of their financial goals. These people are sometimes called HENRYs — or high earners, not rich yet. In recent years, as the rising costs of housing, food, and childcare have weighed on people’s finances, a $100,000-a-year salary hasn’t gone as far as it used to. Americans say they’d need to earn $233,000 a year to feel financially secure and $483,000 to feel rich, according to a Bankrate survey conducted in June 2023.

For Driver, getting rich isn’t only about boosting one’s income — it’s about reducing one’s expenses.

“If expenses — especially housing costs — were more reasonable, I’d feel much more financially secure and rich,” she said.

To be sure, reaching a six-figure income could still be life-changing for many lower-income Americans. And across pay levels, wages have generally been growing faster than inflation in recent months, which could help make some HENRYs feel a bit richer.

Business Insider asked Driver and two other HENRYs about their financial challenges — and what changes to their incomes and expenses would be necessary for them to feel rich. BI has verified their earnings.

You might have to leave your state to feel rich

Christopher Stroup, a 33-year-old financial advisor based in Santa Monica, California, made roughly $130,000 last year.

However, he said he’s still paying off his student debt and working toward his savings goals for a down payment on a home, starting a family, and retirement. That’s why he feels far from rich.

“I wouldn’t consider myself rich yet because I haven’t achieved any of those goals,” he told BI via email. “Versus the traditional arc of life, I feel behind financially.”

Stroup estimated he’d need an annual income of between $250,000 and $300,000 to feel like his finances were “rather stable.” This would allow him to make significant progress toward his savings goals and have enough money left over to “enjoy life,” he said.

To feel “rich,” he guessed that he’d need an annual income of about $400,000 to $500,000 a year — more than triple his 2023 earnings. At this income level, he estimated that he’d be able to meet his savings goals, enjoy life, and have some extra money left over.

If he can’t boost his income to his desired level, Stroup said there’s another thing that might help him feel rich: moving to an area with lower housing costs. Business Insider has interviewed several Americans who have moved to different states in recent years in search of lower rents or mortgage payments.

“I rent a 450-square-foot alcove studio in Santa Monica for $1,650 a month,” Stroup said. “My sister, who lives in Cincinnati, rents a 1,600-square-foot home with three bedrooms, two-and-a-half bathrooms, and a full backyard for $1,800.”

A high income can come with “lifestyle inflation”

It’s not just high-earning Americans who say they feel far from rich.

Abid Salahi, a 25-year-old software engineer based in Vancouver, Canada, made over $100,000 last year. However, his journey to a six-figure income came with some downsides, he told BI via email.

For example, while going to college helped him become a software engineer, he took out a significant level of student debt. He said he has about $30,000 remaining, and that his debt payments are an extra monthly expense he has to account for during the yearslong repayment process.

Salahi said a high income can also come with another challenge: “lifestyle inflation.” Commonly referred to as “lifestyle creep,” this refers to the practice of increasing one’s spending as one’s income rises — and therefore not increasing one’s level of savings much.

“Without proper management, increased spending can absorb the extra income, leaving you with the same amount of savings as if you were earning a lower salary,” Salahi said.

Due to the high costs of housing and other living expenses in his area, Salahi estimated that he’d need to earn about $200,000 to $300,000 to start feeling rich.

“I think feeling truly rich would mean you don’t have to look at the prices when you go to a restaurant, grocery store, or travel destination,” he said. “You also have a substantial amount of savings and investments that can cover you in cases of emergency.”

Are you making over $100,000 a year? Are you willing to share your story and the impact this income has had on your life? If so, contact this reporter at jzinkula@businessinsider.com.