Is a six-figure salary enough to make anyone feel wealthy these days? How about a $500,000 salary?
In this inflationary era, benchmarks of wealth are moving targets. Everything seems to cost more.
Cumulative inflation has raised prices by 22% since early 2020, according to an analysis by the personal finance site Bankrate. Viewed another way, you would need to spend about $1,220 in late 2024 to leverage the same buying power that $1,000 got you in January 2020.
The average American earns a little less than $60,000 a year, according to federal data. But most of us think you need two or three times that much to achieve financial security, let alone wealth.
“There’s so much that goes into the perception of being wealthy,” said Sarah Foster, an economic analyst at Bankrate. “Inflation is a huge part of it.”
“The idea of having a fancy car in the driveway and a beautiful family home used to be the stereotypical idea of the middle class, and now it’s feeling more and more exclusive,” she said.