More than a third of Americans earning at least $250,000 annually say they are living paycheck to paycheck. Approximately 36% of households taking in nearly four times the median U.S. salary devote nearly all of their income to household expenses, according to a survey by industry publication Pymnts.com and LendingClub Corp.
It’s particularly true among millennials, who are now in their mid-20s to early 40s: More than half of top earners in that generation report having little left at the end of the month.
For earners over $250,000 per year, 55.1% of millennials say they are living paycheck to paycheck whilst 21.8% of “boomers” say they are living paycheck to paycheck.
The $250,000-plus income bracket roughly represents the top 5% of earners in the country, according to US Census Bureau data.
Housing expenses, which typically take up large chunks of the budgets of wealthier people, have skyrocketed during the pandemic. For example, in Orange County, California, a top-tier home cost $1.7 million in April, up from $1.2 million in February 2020, based on Zillow Group Inc. data. A mortgage on that house, assuming a 20% down payment, would cost about $100,000 per year. That’s 40% of a $250,000 annual pre-tax income.
Among all consumers surveyed, 61.3% reported living paycheck-to-paycheck in April, a 9 percentage-point increase from a year earlier, LendingClub said in its report.
A separate survey released by the Federal Reserve last week found an overall improvement in the financial well-being of households since the pandemic, bolstered by stimulus aid and surging prices in assets like houses and stocks.
About 78% of Americans said they were doing okay financially or living comfortably — the highest share since the Fed began running the annual survey in 2013.
However one in nine respondents said that they wouldn’t be able to cover a $400 emergency expense by any means, including credit cards, borrowing from family or friends or by selling an asset.
The LendingClub survey was conducted from April 6-13, based on about 4,000 US consumers.
ARTICLE: PAUL MURDOCH
MANAGING EDITOR: CARSON CHOATE
PHOTO CREDITS: BLOOMBERG
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