According to a new study from Goldman Sachs, about 40% of people earning more than $300,000 live paycheck to paycheck.
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Forty percent of workers earning more than $300,000 a year report living paycheck to paycheck, according to a new retirement report from Goldman Sachs Asset Management.
The survey paints a broader picture of financial stress that affects all age groups and income brackets. “Financial stress is not limited to low-income workers,” the report said, noting that lifestyle inflation, debt and high costs of living have eroded savings capacity, even for high earners.
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Among all workers surveyed, about 40% reported living paycheck to paycheck, and 40% said they made only moderate financial progress each year. Goldman Sachs says these groups face significant obstacles when trying to save for retirement.
“About 74% of those who report living paycheck to paycheck also say competing priorities affect their ability to save for retirement,” the report says. These priorities include student loans, child care, health care costs, credit card debt and financial support from family members.
The survey found that people living paycheck to paycheck have the lowest retirement savings-to-income ratios – a metric used to gauge how prepared a person is for retirement. Even making small, regular contributions can be difficult when there is little or no discretionary income left after the bills.
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Interestingly, the trend is not much better among wealthier earners. Among households earning between $200,000 and $300,000, only 16% reported living paycheck to paycheck. But that figure jumps to 41% for those earning between $300,001 and $500,000.
And surprisingly, in the $500,001 and above bracket, 40% of respondents also reported living paycheck to paycheck. According to Goldman Sachs, this could reflect “a lifestyle shift, the phenomenon whereby luxury goods become necessities for certain income groups.”
The report also highlights how major life events, such as having a baby, buying a home or facing financial hardship, often force people to pause their retirement contributions, take out loans on their retirement accounts or delay retirement altogether. About 66% of Gen Z and 59% of Millennials surveyed said they had experienced at least one major life event in the past two years.
