Even American households that make over $150,000 a year are living paycheck to paycheck, according to a new analysis from Bank of America.
The corporation said about 1 in 5 — or approximately 20% — of households earning well over six figures are spending more than 95% of their income on necessities like food, utilities, housing and transportation, which it defines as living paycheck to paycheck.
The largest group seen living paycheck to paycheck, based on the analysis, were households that earn less than $50,000 annually, accounting for 35% of those stretching their income.
But even as the income level grows, the number of those living paycheck to paycheck only varies slightly, the report said.
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There are a couple of reasons Bank of America said could be an explanation for this.
One is that higher-income households may have bought more expensive homes, which consequently would leave them to have bigger mortgages, higher insurance costs and taxes and higher utility bills.
“It is also possible that as household incomes rise, some households may have more varied sources of income that are hard to capture – such as cash from sales of equities paid into a brokerage account,” the analysis stated.
Paycheck-to-paycheck households also rise with age, according to the report, peaking with Baby Boomers.
People living in what Bank of America referred to as the South Atlantic region — Washington, Delaware, Maryland, Virginia, West Virginia, North Carolina, South Carolina, Georgia and Florida — have the highest number of paycheck-to-paycheck households, the analysis stated.
