### High Earners Struggle: One in Five US Households Earning $150,000 Live Paycheck to Paycheck

As living costs continue to rise, even high-earning households are feeling the financial squeeze. According to a recent analysis by Bank of America, a significant 20% of households earning at least $150,000 annually are living paycheck to paycheck. This revelation is based on data from October, which examines spending patterns and account details of U.S.-based customers.

The term "paycheck to paycheck," as defined by Bank of America, refers to those spending over 95% of their income on necessary expenses such as food, utilities, childcare, and rent. The situation is even more dire for lower-income households, with 35% of households earning below $50,000 living paycheck to paycheck, up from 32% in 2019.

The report highlights that even those with six-figure incomes find themselves financially stretched, primarily due to what is known as lifestyle creep. This phenomenon occurs when individuals increase their spending habits as their income rises, often leading to a precarious financial situation despite substantial earnings.

Bank of America notes that households facing this financial strain tend to have much higher necessity spending—over 90% more than those not living paycheck to paycheck. This issue is further exacerbated for higher-income households, which often purchase more expensive homes. These larger homes come with correspondingly larger mortgages, as well as higher insurance costs, property taxes, utilities, and maintenance expenses.

Age also plays a role in financial strain, with the share of paycheck-to-paycheck households increasing as people grow older. Retired baby boomers represent the largest group living paycheck to paycheck. Among working age groups, Gen X has the highest share doing so, reflecting this generation's significant necessity spending.

Overall, the number of households living paycheck to paycheck has risen since 2019, despite a relative cooling of inflation. Currently, one in four households are in this situation. The perception of financial instability remains high, with nearly half of respondents in Bank of America's Market Landscape Insights Study agreeing that they live paycheck to paycheck, a sentiment that has increased over the past two years.

In summary, the findings underscore the pervasive impact of rising living costs and lifestyle inflation, affecting Americans across various income levels and age groups.