Money / Financial Planning
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Is earning a six-figure salary the new benchmark for financial happiness? Surveyed Americans say, in a recent Harris Poll survey commissioned by Personal Capital and Empower, that a person needs to make $122,000 a year to feel financially healthy.
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A six-figure salary is nearly double the national average. It’s an achievable goal to attain the skills and job that pays, but are we really financially happy, or healthy, when earning a six-figure income?
Six-Figure Incomes: Setting a High Bar for Financial Security
David Frederick, director of client success and advice at First Bank, said that the pedestal on which we place the six-figure salary is built by a combination of our need for a little more money and our love of round numbers.
In 2021, the average U.S. household income was $79,900, per the U.S. Department of Housing and Urban Development. Frederick said everyone making around this income level would like just a little bit more money to feel safe, secure and happy. A little bit more money could be put towards the kids’ education, building a retirement fund, paying for home repairs or taking a nice vacation.
If a little bit more money makes us happy, how much more do we need? Frederick said that without a precise dollar amount in mind, we are tempted to think of the next round dollar amount and the next zero on the end of our income.
“It’s not a big leap for people making around $80,000 per year to want just a little bit more to be happy and set their sights on $100,000,” said Frederick.
Ultimately, however, a six-figure income is an arbitrary number.
“A six-figure income is just an arbitrary number that does not offer substantially more security than a number just below it or less security than a number just above it,” said Frederick.
What It Means To Earn Six Figures Today
While the six-figure income is an arbitrary number, it is often tied to the subject of financial security and plays a significant role in managing how we deal with inflation.
Six Figures and Inflation
Inflation — and daily financial woes — are hitting Americans hard. A new report from the American Psychological Association shows 87% of U.S. adults cite rising costs of everyday items, like groceries and gas, as a significant source of stress.
“Inflation is a hard game because it hits everyone in the same proportion. It’s …….