A recent analysis from Bank of America has highlighted a troubling trend: many high-income households are struggling financially, with one in five US households earning at least $150,000 a year now living paycheck to paycheck, Fortune reports.
This finding, based on spending data and account information, underscores how rising costs are affecting Americans across income levels, not just those with lower earnings.
For Bank of America, “paycheck to paycheck” refers to households that spend over 95% of their income on essentials like food, utilities, rent, and childcare. While it’s not unexpected that many households earning less than $50,000 a year are struggling (accounting for 35% of the paycheck-to-paycheck population), the report finds that even households with six-figure incomes are increasingly feeling squeezed.
Much of this pressure, the analysis indicates, is linked to lifestyle creep—when rising income leads to more spending on costlier homes, cars, and other expenses.
“Higher-income households may have bought larger, more expensive homes, resulting in bigger mortgages,” Bank of America noted.
This trend has also driven up related costs like property taxes, utilities, insurance, and maintenance, adding to the financial strain.
Generational differences add another layer to the findings. Baby boomers, many of whom are retired, comprise the largest share of paycheck-to-paycheck households. Among working-age groups, Gen X has the highest percentage, with necessity spending making up a significant portion of their budget. Overall, the share of paycheck-to-paycheck households has risen steadily since 2019, with one in four households currently fitting this description, despite recent easing in inflation.
The data further shows that perceptions about finances have shifted. Nearly half of respondents in Bank of America’s Market Landscape Insights Study agreed with the statement, “I am living paycheck to paycheck.” According to Bank of America, this sentiment likely reflects how elevated consumer prices continue to impact Americans’ financial confidence and security.
