40% of People Earning Over $500,000 Live Paycheck to Paycheck
Key takeaways
- If you re focused on picking the right stocks and ETFs you may be missing the bigger picture: retirement income.
- He was reacting to a Goldman Sachs finding that 40% of Americans earning more than $500,000 a year report living paycheck to paycheck.
- If you make a quarter of what those households earn and assume the income gap solves everything, that statistic should rearrange your thinking.
High earners trap themselves through lifestyle creep by failing to redirect raises into retirement accounts (most max only a Roth IRA at $7,500 when they could shelter up to $72,000 in combined 2026 contributions) and rationalizing spending on upgrades, with U.S. personal savings falling from $1.33 trillion to $942.3 billion as disposable income rose.
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On a recent episode of the Money Guy Show titled Even Smart People Make These Massive Money Mistakes, co-host Bo Hanson delivered the line that should be taped to every high earner s bathroom mirror: "Just because you can doesn t mean you always should", his framing for decisions about upgrading houses, cars, and lifestyle. He was reacting to a Goldman Sachs finding that 40% of Americans earning more than $500,000 a year report living paycheck to paycheck.