smart spending

$100,000 income: No big deal anymore

Stagnant wage growth

While inflation is a real factor in any economic environment, it has been a bigger problem in recent years because wages have not kept up. According to the BLS, for the fiscal year that ended in December 2012, wages and salaries grew an average of 1.7 percent, while during that same period, consumer prices rose 1.7 percent. From 2000 to 2010, real incomes fell 7 percent. When the newest numbers are released, they're expected to reveal an even further plummet in real incomes.

"We haven't had real wage growth, and with inflation, Americans are not making much more than they were 20 years ago. Some may even be making less," says Adam.

According to 2011 data from the U.S. Census Bureau, only 21 percent of households had an income of $100,000 or more. Adam Koos of Libertas Wealth Management Group near Columbus, Ohio, says members of most households would see a boost in their quality of life by hitting the six-figure benchmark, but they might be surprised to see it doesn't necessarily make them high rollers.

When the term started being thrown around in the '80s, a $100,000-earner might have lived in an elaborate home with a BMW in the driveway. Nowadays, he or she is more likely to live in a 1,500-square-foot house and drive a 7-year-old Toyota.

"Back in the '80s when we were kids, we all looked up to a six-figure income and thought it was huge. People still look up to that and think they're going to be 'rich,' but it's just not the case," says Koos.

Geography

Where a person lives has a tremendous impact on how far a $100,000 income will go. Living on that salary in Texas or Mississippi is dramatically different from living on it in New York or Boston. Roy Laux, president of Synergy Financial Services in McKeesport, Pa., says it's an unavoidable factor that the cost of one's mortgage or rent can make or break that six-figure income.

"Geography is huge. If you're in an area where housing has been historically high, it's just going to take a large portion of that income," says Laux.

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