Americans Struggle With High Costs as $150K Salary Qualifies as ‘Lower Middle Class’ in These Cities

According to a new survey, what it means to be "successful" in the United States is changing as prices for house loans, insurance, and other financial products rise. The survey conducted by the financial website GoBankingRates examined how much people earn vs how much it costs to live in various locations of the country. It discovered that in some locations, even if you make up to $150,000, you may still be classified as "lower-middle class."

Financial strain in high-cost cities

Making more than $100,000 used to be considered quite successful, but this is no longer the case, particularly in high-cost cities. So, even if you make six figures, you may still feel financially strained depending on where you live. The research discovered that in specific areas such as Northern California and Virginia, you would have to earn somewhere between $128,964 and $152,652 to not be considered "lower-middle class." These cities include Arlington, Virginia; San Francisco; San Jose, California; Irvine, California; Seattle; Gilbert, Arizona; Plano, Texas; Scottsdale, Arizona; Washington, D.C.; and Chandler, Arizona.

"Clients I work with in Arlington are seeing that impact with the cost of housing, transportation, healthcare, education, and general lifestyle," financial advisor, Rodney Griffin with Northwestern Mutual, told GoBankingRates. "While $150,000 may be a comfortable salary in some places, high demand from many people with comparative salaries can create an increased cost of living," Griffin said.

Striving for higher incomes

"To climb out of the lower middle class in the top 15 cities, you'd have to earn more than six figures, possibly up to $150,000," GOBankingRates lead content data researcher Andrew Murray told Fox News Digital. "Because of these high-income requirements, many people might prefer living in more affordable cities, where the average earnings are around $75,000."

Impacts of high living costs

The analysis highlighted that the top 25 cities also have notably high costs for housing, childcare, and transportation compared to national averages. According to the data analyst, housing and real estate expenses can have the greatest impact on how affordable a city is and what wealth class one falls into. Eight of the top 25 cities are located in Virginia, Washington, and Arizona.

Although Virginia and Washington generally have higher living costs, the cities on our list all boast exceptionally high median household incomes," Murray noted. Murray explains that Arlington, Virginia, just outside Washington, D.C., has the highest median household income nationwide, nearly hitting $140,000. The typical household income in both Seattle and Gilbert is more than $115,000. Interestingly, all three of Arizona's top 25 cities are part of the Phoenix metro region. California tops the list, accounting for seven of the top 25 positions, owing primarily to its high housing costs. Murray points out that California has some of the highest housing expenses in the country. Californians generally spend about $30,000 per year on housing bills.

Challenges for middle-class families

The report highlights that in these expensive cities, the sky-high costs of necessities such as housing, childcare, and transportation leave middle-class families feeling financially strained, even with relatively high household incomes. This raises important questions about the distinction between being 'rich' and 'middle class' in various regions of the country. According to recent data from the US Bureau of Labor, the average pay for US residents in the fourth quarter of 2023 was $59,384, up more than 5% from the previous year.