REVEALED: The cities where earning $150k a year is not even enough to be middle class anymore – fascinating study reveals how soaring inflation has eaten into six-figure salaries

A six-figure salary could one day be considered the benchmark for a comfortable lifestyle in the US.

But a new report shows that in 15 major U.S. cities, where the cost of living is particularly high, an annual income of $100,000 is only enough to qualify as “lower middle class.”

To put that in plain terms, if you earn six figures in these areas, it means you are in the poorest 40 percent – ​​and do not meet the definition of middle class.

In three of the most expensive cities—Arlington, San Francisco, and San Jose—an income of $150,000 a year isn’t even enough to step out of the “lower middle class” and be considered fully middle class. See the definitions in the box below.

The findings, from the personal finance website GoBanking Ratesexpose how much rampant inflation is putting pressure on even high-income families.

Crippling increases in the costs of groceries, housing, child care and transportation have hit all of America, and some areas more than others.

Arlington, Virginia emerged as the most expensive city, with households needing at least $91,591 to be considered “lower middle class.” Only when they reach $152,652 do they qualify as middle class.

Arlington, VA, emerged as the most expensive city, with households needing between $91,591 and $152,652 to be considered “lower middle class.”

Jeff Rose said that even with a sizable down payment, monthly payments on a $1.2 million home can easily exceed $5,000 or more

They would need even more to reach the middle and upper middle classes.

The city’s cost of living is 41 percent higher than the national average and 121 percent higher if you focus just on housing, researchers said.

Financial advisor Rodney Griffin said, “Clients I work with in Arlington are seeing that impact on the costs of housing, transportation, healthcare, education and overall lifestyle.

“While $150,000 may be a comfortable salary in some places, the high demand from many people with similar salaries can lead to a higher cost of living.”

It was followed by San Francisco, CA, where families need between $91,126 and $151,877. San Jose, Irvine, CA and Seattle, WA rounded out the top five.

GoBanking Rates used the PEW Research Center’s definition of middle class, which means earning two-thirds to double an area’s median income.

The study looked at U.S. Census Bureau data from the 100 largest U.S. cities.

Notably, New York City did not appear in the top 15 cities where it achieved middle class status.

The Big Apple ranks at number 33, as residents only need between $51,700 and $85,100 to qualify as “lower middle class.”

By comparison, Cleveland, OH, had the lowest income threshold. Citizens there would have to earn more than $42,000 to escape the “lower middle class.”

The rising cost of living in major American cities is mainly due to rising house prices.

In San Francisco, for example, the median home price in December 2023 was $1.2 million.

Jeff Rose, founder of Alliance Wealth Management, said GoBanking Rates: ‘Monthly payments on a $1.2 million home, even with a significant down payment, can easily top $5,000 or more, depending on mortgage terms and interest rates.

“This could make up more than 40 percent of your gross monthly income if you make $150,000.”

San Francisco, CA, families need between $91,126 and $151,877 to be considered lower middle class

San Jose, CA, requires the third highest salary to qualify as “lower middle class.” Employees must earn between $90,673 and $151,122

Annual inflation was 3.1 percent in January, down from 3.4 percent in December but still 0.2 percent higher than expected

Financial planners generally recommend that employees spend no more than 30 percent of their pre-tax income on housing.

It comes after a separate study by HelpAdvisor analyzed how the cost of grocery shopping varies by state.

The data showed that the average household now spends $1,080 on monthly groceries.

California households spent the most money, averaging $297.72 per week, or $1,190 per month.

It was followed by Nevada, Mississippi and Washington, where weekly spending was $294.76, $290.64 and $287.67, respectively.

Figures released last week by the U.S. Bureau of Labor Statistics show the annual inflation rate fell to 3.1 percent nationally in January.

The costs for food at home in particular have risen by 2.6 percent over the past twelve months.