How Much is Six Figures? Not Enough: Why the 6-Figure Salary No Longer Pays Enough

As young adults, we all dreamed of making six figures. That 6 figure salary stood trophy-like on the horizon, symbolizing achieving the American Dream and “making it” in society. 

Today, six figures isn’t what it used to be. Although people still strive for a 6 figure salary, it’s no longer proof you’ve made it; it’s now nearly the bare minimum you need to survive. 

How Much is Six Figures?

People making six figures earn over $100,000 per year. The six-figure amount refers to the dollar amount of an annual salary. There are six numbers in 100,000. Thus, it’s a six-figure salary. A five-figure salary would be anything under $100,000 per year. 

How Much is Six Figures Per Month?

A yearly salary doesn’t tell the full story. People should know how much six figures provides per month after deductions. 

For example, we’ll use the lowest possible six-figure salary, $100,000. 

To determine your gross monthly salary, you’d simply divide by 12. People making the low end of six figures gross about $8,333 monthly. 

How Much Tax Do You Pay on Six Figures?

A six-figure salary falls under the 24% tax bracket. A single person without dependents would see $2,000 chopped off their monthly salary. Now, they only have about $6,333 per month in spending.

Of course, the tax code is incredibly complicated, and this is a massive simplification. Many people have deductions or dependents that change their withholdings, but this example provides a general idea of how much money someone will have to spend if they earn six figures. 

Other Deductions on a 6-Figure Salary

Typically, people earning 6 figures will have other deductions as well. Many of these are optional, so an employee could take home $6,300 per month, but most see the value in the other deductions, and some are mandatory. 

First, there are state income taxes, which take another small percentage of your income. Most states withhold this tax directly from income, but it varies widely based on the state. Some states have no income tax and some charge up to 10% for high earners. 

We will assume a low state tax rate of 3% for simplicity. 

Next, there’s healthcare and retirement. Although technically optional, most companies automatically enroll you. That’s another 5-10% of salary workers will never even see. 

For our math, we’ll assume 7%. 

After these deductions, employees are left with an annual income of $66,000, about $5,500 per month. 

That’s a Lot of Money!!

People earning less than six figures probably consider that a lot of money. 

And it is, except, of course, after considering the rising cost of everything. 


The average cost of rent is over $1700, and the average apartment size is less than 1000 square feet.  But let’s be real, that’s skewed by the low cost of living areas that still have cheap rents but lack six-figure jobs. 

A person making a six-figure salary probably lives in a high-cost-of-living area where rents are even higher. 

Average rents in New York, Chicago, Los Angeles, Seattle, Washington DC, Boston, Miami, and Philadelphia exceed $ 2,000 per month and, in some cases, are over $ 3,000. 

If we assume the low end of the scale and, say, a person earning a six-figure salary pays $2000 in rent, that leaves them with $3500 per month. 

Other Costs

Now, they have to pay for transportation, insurance, and utilities. A person earning six figures likely has student loan debt to pay, or kids in daycare, costs that eat away even more of their salary. 

Rising food costs affect them as well. 

After all these costs, people earning $100,000 per year are lucky if they have extra spending money for a few nights out a month or to put in an emergency savings account. 

Six Figures Enough To Survive

Of course, earning six figures is far better than the alternative of making the average US salary, which is a little less than $60,000. 

People earning over $100,000 can survive and typically put money into retirement accounts to plan for the future, whereas people making less must decide between retirement and emergency savings or debt repayment and healthcare. 

6 Figures Not Enough for an Easy Life

Although six figures is enough to survive, it’s no longer sufficient to thrive. 

It’s not the dream anymore; it’s almost a need. People earning less rely on a partner, parents, or credit to afford life. 

Money for Happiness

The disconnect between a six-figure salary and the amount of money needed to thrive is apparent in the new research showing how much money people need for happiness. 

Ten years ago, it was less than six figures (about $75,000). Recent studies put the number closer to $200,000, showcasing that the low end of six figures isn’t nearly enough. 

Strive for Six Figures and Beyond

That isn’t to say you shouldn’t strive for a six-figure salary. It’s better to make enough money for survival than the alternative. 

However, know that people earning six figures are also struggling. The impressive salary isn’t what it used to be, as even wages at the high end of the scale haven’t kept up with inflation. 

Author: Melanie Allen

Title: Journalist

Expertise: Pursuing Your Passions, Travel, Wellness, Hobbies, Finance, Gaming, Happiness

Melanie Allen is an American journalist and happiness expert. She has bylines on MSN, the AP News Wire, Wealth of Geeks, Media Decision, and numerous media outlets across the nation and is a certified happiness life coach. She covers a wide range of topics centered around self-actualization and the quest for a fulfilling life.