200k is the New 6-Figures

Everyone always talks about a 6-figure salary as this kind of “gold standard” for a goal, but 6-figures itself is a static goal and doesn’t take into account inflation and the reduction of buying power over time.

I know inflation has been big news and there has been quite a bit of talk about it lately with what happened to prices in our post-pandemic world, but inflation is always a thing. It is usually just less noticeable and flies more under the radar.

I wanted to see what inflation has really meant to that 6-figure “gold standard” and it is interesting and kind of scary for those of us not in the billionaire realm.

The US Bureau of Labor and Statistics has an inflation calculator — https://data.bls.gov/cgi-bin/cpicalc.pl.

Being the numbers geek that I am, I find it kind of interesting to play around with stuff like that, so I plugged in various numbers and dates.

The 6-figure standard of $100,000 in April of 1996 doubles to over $200,000 by April 2024 meaning that you can now buy 1/2 of the products and services that you could have back then.

That being said, if your goal is 6-figures, perhaps you now want to readjust that to be $200k instead, or maybe even more.

If your goal today is higher than $100k, you are probably going to want to double whatever that number is as well.

If you go back a bit further and are thinking that $100k in January of 1978 was what you were shooting for, then as of April 2024, you need over half of a million dollars per year ($500k) to achieve the equivalent spending power.

And because of higher inflation in the 1970’s, you only have to head back an additional 13 years to March of 1965 for it to double again, and that $100k now requires over $1 million dollars per year to achieve the equivalent purchasing power.