40% of people making 500K/year are living paycheck to paycheck

[Anonymous]

yes i mean we live pay check to paycheck too making 700k\yr. Noting left after maxing out retirements, mega roth, huge chunk to brokerage, vacation fund, college kids rent and expenses, mortgage and home
maintenance. Nothing left 🤣

[Anonymous]

Anonymous wrote:i think the hardest part when i was making that much was full on sandwich generation time: $17,000 a month for two parents in memory care, and $3,000 a month for daycare. parents have now died and kiddo is in public school. but i was running low on money.

That was very generous of you to pay for your parents' care. Many others would have let Medicaid pick up the tab. My family earns less than 17K a month so paying for that ourselves wouldn't have been an option.

[Anonymous]

In the $100k to $300k it feels like paycheck to paycheck because they are putting lots in savings so it’s not really available for daily use. There is still real budgeting going on. This is the range where they know not to depend on social security, don’t expect to get lots in aide for college, healthcare cost share is higher, and taxes are higher. So while yes they can afford some nicer things they are still budgeting, still conscious of the higher price of goods, and yet being looked at as if they are really rich.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:I've seen enough of those "we make $500k but money feels tight" articles to know that most people don't actually know what paycheck to paycheck means

In this case they mean after maxing out all their retirement accounts and setting aside automated brokerage investments, paying private school tuition, paying the mortgage on heir huge house, and setting aside cash for their next big vacation and reno, they feel like they don't have enough left over to spring for guac.

Exactly, we make like 800k and still shop at Aldies because we need to save so much and pay for private college tuition, etc. It's not a glamorous life, everything thinks it is.

If you make 800k and are still pinching Pennie’s at the grocery store you’re doing it wrong. Stop wasting all your money on private school and the idea of private college.

+1 That's a choice. It's actually a glamorous choice! Sending your kids to whatever college they want and get into even if it's 100k a year? That's a lot more glamorous than Whole Foods, babe.

No one, no matter their personal choices, should be complaining about money at 800k. It’s insufferable and gross

or$200k.

[Anonymous]

Anonymous wrote:

Anonymous wrote:Pay check to pay check literally means there are no savings - no retirement - and no money at the end of the pay period.

So many here just do not understand.

Wrong , pay check to pay check means the way the life is setup you spend everything going into your bank account each pay check. .

Yes. But it has to genuinely mean that. You have to be risk of over drafting. That’s paycheck to paycheck. The day before pay day is stressful. That’s paycheck to paycheck.

[Anonymous]

Anonymous wrote:yes i mean we live pay check to paycheck too making 700k\yr. Noting left after maxing out retirements, mega roth, huge chunk to brokerage, vacation fund, college kids rent and expenses, mortgage and home
maintenance. Nothing left 🤣

Yep, we make $800 k and are in the same situation. Plus we have private school expenses for 2 kids.

[Anonymous]

Anonymous wrote:In the $100k to $300k it feels like paycheck to paycheck because they are putting lots in savings so it’s not really available for daily use. There is still real budgeting going on. This is the range where they know not to depend on social security, don’t expect to get lots in aide for college, healthcare cost share is higher, and taxes are higher. So while yes they can afford some nicer things they are still budgeting, still conscious of the higher price of goods, and yet being looked at as if they are really rich.

And yet the people in this range reported much lower rates of feeling "paycheck to paycheck" because somehow these people are still connected to reality enough to understand that having to budget and engage in delayed gratification choices (like putting money in retirement and college accounts instead of buying a boat or flying first class) is not the same as being one missed paycheck away from being evicted or having to rely on credit cards you don't know how you'll pay off just to get through the month.

Somehow, at that 300k threshold, a shocking number of people (around 40%!) lose this attachment to perspective and reality, and come to believe things like private school or foreign travel are necessities, and to actually think they somehow have it harder than people who make half or even just a small fraction of the same income. Apparently 300k is the point at which people start to become Dumb Rich People, which is actually one of the plagues not talked about enough. 40%! By the time incomes are up over 800k, how bad do we think it is? 50%? 60%? 9 in 10 billionaires appear to be DRP, for instance.

It's a problem.

[Anonymous]

Anonymous wrote:

Anonymous wrote:In the $100k to $300k it feels like paycheck to paycheck because they are putting lots in savings so it’s not really available for daily use. There is still real budgeting going on. This is the range where they know not to depend on social security, don’t expect to get lots in aide for college, healthcare cost share is higher, and taxes are higher. So while yes they can afford some nicer things they are still budgeting, still conscious of the higher price of goods, and yet being looked at as if they are really rich.

And yet the people in this range reported much lower rates of feeling "paycheck to paycheck" because somehow these people are still connected to reality enough to understand that having to budget and engage in delayed gratification choices (like putting money in retirement and college accounts instead of buying a boat or flying first class) is not the same as being one missed paycheck away from being evicted or having to rely on credit cards you don't know how you'll pay off just to get through the month.

Somehow, at that 300k threshold, a shocking number of people (around 40%!) lose this attachment to perspective and reality, and come to believe things like private school or foreign travel are necessities, and to actually think they somehow have it harder than people who make half or even just a small fraction of the same income. Apparently 300k is the point at which people start to become Dumb Rich People, which is actually one of the plagues not talked about enough. 40%! By the time incomes are up over 800k, how bad do we think it is? 50%? 60%? 9 in 10 billionaires appear to be DRP, for instance.

It's a problem.

Hah, yes, eventually the "millionaire next door" driving the old car will be considered "paycheck to paycheck."

[Anonymous]

People in that $400K range are in a tougher spot than it looks. On paper, it seems like a big jump from $250K–$300K, but the math doesn’t play out that way. A $250K–$300K household might take home around $180K–$210K after taxes. A $400K household might net about $240K–$260K. So the gap after taxes is already much smaller than people expect.

Now layer in retirement. The Social Security Administration replaces a meaningful portion of income for mid-level earners, but much less for higher earners. At $250K–$300K, you might only need to save $20K–$40K a year. At $400K, that jumps to $60K–$90K+ because you have to self-fund most of your retirement.

Once you subtract that, the numbers start to converge. A $250K–$300K household could have around $150K–$180K to spend. A $400K household, saving what they need to, could end up in a very similar range, roughly $150K–$170K. That’s the surprising part. You’re earning a lot more, but not necessarily living on a lot more.

The result is a compressed outcome. The system takes more in taxes on the way up, and at the same time expects higher earners to save significantly more because they get less relative support later. So a large portion of that additional income is effectively locked away.

That’s why it can feel like a tough tradeoff. You push into that “entry rich” range, but the real, usable income doesn’t scale the way people assume.

[Anonymous]

Anonymous wrote:People in that $400K range are in a tougher spot than it looks. On paper, it seems like a big jump from $250K–$300K, but the math doesn’t play out that way. A $250K–$300K household might take home around $180K–$210K after taxes. A $400K household might net about $240K–$260K. So the gap after taxes is already much smaller than people expect.

Now layer in retirement. The Social Security Administration replaces a meaningful portion of income for mid-level earners, but much less for higher earners. At $250K–$300K, you might only need to save $20K–$40K a year. At $400K, that jumps to $60K–$90K+ because you have to self-fund most of your retirement.

Once you subtract that, the numbers start to converge. A $250K–$300K household could have around $150K–$180K to spend. A $400K household, saving what they need to, could end up in a very similar range, roughly $150K–$170K. That’s the surprising part. You’re earning a lot more, but not necessarily living on a lot more.

The result is a compressed outcome. The system takes more in taxes on the way up, and at the same time expects higher earners to save significantly more because they get less relative support later. So a large portion of that additional income is effectively locked away.

That’s why it can feel like a tough tradeoff. You push into that “entry rich” range, but the real, usable income doesn’t scale the way people assume.

And here’s the part people really don’t see coming.

Lower and mid-income households still get credits and tax advantages that phase out as income rises. Once you’re in the $300K+ range, most of these are gone.

Examples of what phases out:

Child Tax Credit: up to $2K per child
0% capital gains bracket (vs 15–20% for higher earners)
Premium tax credits (health insurance subsidies, can be thousands/year)
Student loan interest deduction
Saver’s Credit for retirement contributions

Now look at the math:
$275K household (2 kids)
Take-home after taxes: ~$195K
Child tax credits: +$4K
Lower capital gains taxes / other breaks: +$3K–$5K
Savings needed: ~$25K
Spendable: ~$175K–$180K

$400K household (2 kids)
Take-home after taxes: ~$250K
Credits: $0 (phased out)
Higher capital gains taxes
Savings needed: ~$70K–$90K
Spendable: ~$160K–$180K
The wild part

After taxes, lost credits, and required savings:
A $275K household can end up with the same or even slightly more usable money than a $400K household.

That’s the real compression. Higher income looks much bigger on paper, but a lot of it disappears through taxes, lost benefits, and the need to self-fund retirement.

This is the problem of our budensome tax system unitl you can break out to the 1m+ you really are just the same as 250-300k

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:My spouse took a fed VERa and we have taken a 25 % hit to our net HHI as he is figuring out what’s next.

We literally just sat down and went through what we are cutting in our budget. Our budget is “tight”, but it still accounts for retirement savings and savings for our big ticket items over the course of the year. HHI was 450K, the drop was probably 1/3 but because of tax shifts it is only a 1/4 drop in net.

In any event, we can make it work with some adjustments to our spending and we continue to save. Accounting for every dollar through either budget or savings is not paycheck to paycheck.

are you rich? can you fly first class (not business) to europe or have a private jet?

I know you're being sarcastic, but the cost jump from first class to private is HUGE. It's typically $10k per hour with up front >$200k investments.


It's unlikely even the typical very rich DCUM person flies private.

And also highly unlikely dcum people are flying business much at $500k level unless it's just two people and they don't have kids.

[Anonymous]

Anonymous wrote:

Anonymous wrote:Pay check to pay check literally means there are no savings - no retirement - and no money at the end of the pay period.

So many here just do not understand.

Wrong , pay check to pay check means the way the life is setup you spend everything going into your bank account each pay check. .

But if you are saving for retirement and other stuff that is not paycheck to paycheck.

However I do get that many in that range are budgeted to spend everything with minimal savings (relative to income).

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:I've seen enough of those "we make $500k but money feels tight" articles to know that most people don't actually know what paycheck to paycheck means

In this case they mean after maxing out all their retirement accounts and setting aside automated brokerage investments, paying private school tuition, paying the mortgage on heir huge house, and setting aside cash for their next big vacation and reno, they feel like they don't have enough left over to spring for guac.

Exactly, we make like 800k and still shop at Aldies because we need to save so much and pay for private college tuition, etc. It's not a glamorous life, everything thinks it is.

If you make 800k and are still pinching Pennie’s at the grocery store you’re doing it wrong. Stop wasting all your money on private school and the idea of private college.

Or how about planning. If you are making $800k and cannot figure out how to save for $90k+ college for your kids you have a budget problem. And if you want private k-12 you have to plan for that as well. But if doing either for both of those makes you stress over food, then you need to find areas to cut back. And it shouldn't be difficult

[Anonymous]

Anonymous wrote:

Anonymous wrote:$500k from one earner is MUCH different from 2 earners.

how so???

Because social security tax comes out in the first $180k for each. So if it's an even split you are paying double SS

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:Pay check to pay check literally means there are no savings - no retirement - and no money at the end of the pay period.

So many here just do not understand.

Wrong , pay check to pay check means the way the life is setup you spend everything going into your bank account each pay check. .

Yes. But it has to genuinely mean that. You have to be risk of over drafting. That’s paycheck to paycheck. The day before pay day is stressful. That’s paycheck to paycheck.

+1. If you can pull from savings or sell stock to cover the gap, you aren’t paycheck to paycheck, you’re just overextended or diverting too much to savings/investments. It’s not the same thing. When I was growing up, sometimes we had to drive over to the electric company’s office in person before 5pm to make a payment because we were a couple months behind and if we didn’t our power was being cut the next day. THAT’s paycheck to paycheck.