What Living On $100,000 A Year Looks Like

Dec 3, 2017
Originally published on December 6, 2017 12:28 am

A central question of debate leading up to the Senate's passage of a sweeping tax overhaul plan asked which Americans need a boost. Economists say the Republicans' selling point for previous iterations of their legislation, that the plan is designed to benefit the middle class, has a shaky foundation — that the rich are the big winners.

And the middle class is already struggling. The median household income is roughly $59,000 a year. But around the country, even six-figure salaries for some single-person households don't necessarily furnish financial security.

"People feel like they haven't been getting ahead for a long time," says Jim Tankersley, who covers taxes and the economy for The New York Times.

People whose upper-class salaries are not keeping pace with their upper-class standards of living, Tankersley says, are often experiencing a lingering effect of the 2008 financial crisis.

NPR's Lulu Garcia-Navarro spoke to a variety of people in different cities about what their lives look like on $100,000 a year. On paper, that kind of salary is considered well-off. But as we heard from many, it often takes just one major expense for that to not feel like enough: student loans, health care, childcare or housing costs.

Stephanie Culp of Gaithersburg, Md.

For the Culp family, a living on $100,000 a year is "far from destitute — it's just not enough," Stephanie Culp says.

Credit card debt, hospital bills and cut work hours led the Culps to declare bankruptcy. So she moved to Gaithersburg, Md., with her husband, a software programmer, so he could take a higher salary.

With years of mounting debt and no savings, Stephanie Culp continues to make tough choices for her family. "It's either pay these bills or it's — we don't eat," she says. That sometimes means cutting back on electricity bills or temporarily giving up the cellphones.

Culp grew up in a trailer home with her parents, but she says she didn't exactly feel poor. "I mean I knew I didn't have the best clothes like everybody, but we always had Christmas," she says.

"With my husband and I now, we haven't been able to do Christmas in 10 years. We don't even have a tree," she says.

Theresa Sahhar, Olathe, Kan.

Theresa Sahhar lives just outside of Kansas City, Kan., where the cost of living is relatively very reasonable. CNN Money estimates a comparable $100,000 salary in Manhattan, for example, would be almost $250,000.

Her husband is a mechanical engineer, and she works in sales part-time. To afford educational opportunities for her high-school-aged son, she also picks up odd jobs within the gig economy.

While she had accounted for expenses of having a family, she didn't expect her salary to stagnate. "It's embarrassing to say that you have to work overtime in order to make enough money to live on," she says. But in her community, her family isn't alone in struggling to keep up.

"I was really surprised because from the outside, it looks like we have plenty of money," she says. "But then when you really look underneath it all, you see that people are working overtime. They're working second jobs and even third jobs to try to put together the money just to stay in the middle class where they've been in the past."

Sahhar and her husband don't plan to retire. "I expect to work until I'm dead."

And she doesn't think her kids' generation, while working to chip away at "crippling student loans," will have it any easier. "Having experienced both privilege and poverty, I'd much rather live a privileged life," she says. "And that's what I want for my children. I want my children to be able to access a few of the better things in life. I don't expect them to be rich, but I would like them to not be poor."

Taylor Haby, Seattle, Wash.

For a single young man, it might seem that $100,000 could furnish a more-than-comfortable lifestyle. But to Haby, who sells scientific equipment for a living, it doesn't feel like a fortune.

Now in Seattle, he says "it's been a big lifestyle change, having grown up in a small, rural Texas family." He's also sitting on a lot of student debt. Haby's already paid off $15,000 of his $30,000 in loans.

"And now I'm one of those coastal elites, a term, you know, that people in Middle America use. And it feels like betrayal," he says. "But what I've learned in moving to the coast is there's real inequality. And the biggest driver of that inequality is the tax code. The biggest social welfare has been to the rich and powerful, giving them loopholes and abilities to keep money from the government and keep money from the rest of us."

Jacob Hugart, St. Paul, Minn.

Hugart, a supervisor for 3M (Minnesota Mining and Manufacturing), talked about how budgeting for a family of five forced a tough decision: "Have two incomes, and one is essentially dedicated to daycare, or have one income and a stay-at-home parent."

They chose the latter: His wife stayed home to take care of the kids. Looking back, Hugart says, he probably would have tried to keep that two-parent income.

"The ones where both parents are working seem to be doing fairly well," he says. "They will remodel a kitchen. They have multiple cars. The ones who are trying to do the one-parent thing — there's a stretch. They're like us."

Hugart says he makes enough to meet his family's day-to-day needs, but bigger and unexpected expenses are a squeeze — such as his son's college funds or, Hugart says, a recent roof repair: "We ended up cashing out an IRA in order to pay for that because the other alternative was to put it on a credit card."

NPR's Ian Stewart, Adelina Lancianese and Barrie Hardymon produced and edited the audio for this story.



Over the past month on this show, we've been hearing from Americans who are straining to make ends meet. On paper, though, they're well off. They make about $100,000 a year. But it often takes just one major expense for things to get hard - student loans, child care or medical expenses. For Stephanie Culp and her husband, it was debt that just kept adding up.

STEPHANIE CULP: The hot water heater went out. He needed new tires. The garbage disposal went out. And it was just, you know, once you get behind, and you have so much of your income going out, there was just no way to catch up.

GARCIA-NAVARRO: The Culps declared bankruptcy, left their house and moved to Gaithersburg, Md., so that her husband could take a better paying job. They live in an apartment there with their son and daughter - young adults who both have severe nonverbal autism. Stephanie is a stay-at-home mom. Her husband is a software programmer who earns $100,000. I asked her if they'd been able to get control of their debt, if his paychecks covered their many expenses.

CULP: I'm going to say no, being as we don't have a single piece of furniture in this apartment (laughter). We just struggle to get it paycheck to paycheck. That's pretty much how we live.

GARCIA-NAVARRO: How do you pay your bills?

CULP: I'm in charge of the finances. So, sometimes, things have to wait. I have to make judgment calls on what we absolutely have to have, what I can maybe double up on next month because we can't afford to pay it all at once.

GARCIA-NAVARRO: So what are the choices that you're sometimes making? What things do you have to kind of delay?

CULP: Sometimes, it's the cell phones. But I, you know, hate to do without those in case the school needs me or if my - you know, if my husband gets in a wreck, I'm not comfortable doing without those. Sometimes we push the electricity back. Sometimes, it's the insurance because it's either pay these bills, or it's we don't eat. So, you know, what do I cut back on?

GARCIA-NAVARRO: Is it so expensive because of where you're living? Or are there other additional costs to do with your children and other issues?

CULP: It's partly because, you know, of where we're living. Gaithersburg is a booming area. It would honestly - we discovered it would be cheaper if we were able to buy a townhome. But because we have a recent bankruptcy, there's not going to be a bank to look at us sideways for years. So I'm grateful to be here. It's just that it's a lot more expensive than I ever thought it was going to be.

GARCIA-NAVARRO: Tell me about the bankruptcy. What happened?

CULP: A myriad of things - too many credit cards, too many major hospitalizations. I was working at the time, but my hours continually got cut. And my husband's job cut out the overtime. We couldn't afford all the payments. And it just snowballed out of control.

GARCIA-NAVARRO: Did you have any savings?

CULP: No, we never have savings.

GARCIA-NAVARRO: Tell me about your kids.

CULP: They are 19 and 20. I have a boy and a girl. My son is the youngest. Along with the autism, he just has severe anger problems. He hits things. He hits himself. He hits me, his sister. And it doesn't take anything to set him off. We finally got him into a school that seems to be really helping him. But they also do not sleep at night. So he cannot ride the bus in the morning because he probably just went to sleep. So I have to take him every morning, and I have to pick him up every afternoon. It's stressful.

GARCIA-NAVARRO: Yeah. Does your husband expect that he's going to retire?

CULP: No. He has told me multiple times that he will work until he drops dead because we just - there's no affording it.

GARCIA-NAVARRO: How did you grow up?

CULP: I grew up with both my parents. But, you know, we lived in a trailer with a one-room air conditioner. And I didn't really feel that we were poor. I mean, I knew I didn't have the best clothes like everybody, but we always had Christmas. With my husband and I now, we haven't been able to do Christmas in 10 years. We don't even have a tree.

GARCIA-NAVARRO: Does that surprise you when you grew up thinking that, you know, you might have better things, and you earn $100,000 now, and you can't have a Christmas tree?

CULP: It's absolutely awful because I feel like we should. I mean, we're not homeless. We don't live out of our vehicles. We could save a lot of money if we did. We make $100,000 a year. So it's far from destitute. It's just not enough.

GARCIA-NAVARRO: That was Stephanie Culp of Gaithersburg, Md.

JIM TANKERSLEY: People feel like they haven't been getting ahead for a long time.

GARCIA-NAVARRO: Jim Tankersley covers taxes and the economy for The New York Times. He told us that the stories we've heard of people struggling to get by, even on six figures, often are a lingering result of the financial crisis of 2008.

TANKERSLEY: The sort of raises they were used to, especially in the late 1990s, just haven't happened in the wake of the Great Recession. And so for a lot of people, whether they're making the median or just under 100,000, they feel like, hey, my quality of life is not advancing nearly as fast as I think it should be based on what I've seen in the past.

GARCIA-NAVARRO: And people in America don't have a lot of savings, do they?

TANKERSLEY: They don't. We've seen the savings rate drop over time. We see there are a large number of families who can't even get by if they've missed two paychecks. This is a problem that predates the recession. It's actually been a problem throughout the 2000s, where people borrowed, and they overspent, perhaps, relative to what they should have been saving just to keep pace with, again - with those quality-of-life improvements that they had been accustomed to in the past.

GARCIA-NAVARRO: One of the things that these families talk about is the expenses that they can't really mitigate - child care, medical expenses.

TANKERSLEY: And those are expenses that we see, in particular, policymakers now being more interested in trying to figure out solutions for, whether those are market-based solutions to get more competition or whether they're government solutions to help people, whether through subsidies or other ways of bringing down those costs. Education, child care - these are things that have been increasing faster than overall costs in the economy. And they are very visible costs to working families. And I think that's why policymakers are so tuned into them now.

GARCIA-NAVARRO: How does this fit in with what we're seeing now? We see the stock market at record levels. The economy has picked up again. It's growing. We see unemployment at very low levels. What does that mean for the average family?

TANKERSLEY: Well, I'm going to do something that economics reporters - and particularly, this economics reporter - don't often do and be a little bit optimistic here for a second. We know that things get better faster for families and working families when the economy is in what we call full employment, where unemployment is very low, when there's a lot of pressure on companies to raise wages to keep workers.

And so if we can maintain that period for a while again, like we did in the late '90s, that would be great for these families. They might actually start to see faster and sustained wage increases in a way that really does start to feel like, hey, getting ahead again.

GARCIA-NAVARRO: Jim Tankersley, tax and economics reporter at The New York Times, thank you very much.

TANKERSLEY: My pleasure.

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