WSJ: “They are in the top 10% of earners; but they don’t feel rich”

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American households that make about $250,000 or more are typically considered to be in the top 10% of earners. Many in that bracket realize that the number sounds huge—and by many measures, affluent Americans are indeed thriving. Yet the top-line figures can mask a sense of financial fragility in many high-earning families.

Years of soaring costs for housing, college, insurance and borrowing feel oppressive, even for those with hefty paychecks. They might be sitting on a mountain of home-equity gains, but that doesn’t provide a huge sense of security when companies are getting rid of white-collar workers and it’s the rare employer that offers a guaranteed pension. 

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Killingsworth runs an app that asks tens of thousands of people ongoing questions about their level of happiness. More than a quarter of people whose households earn between $200,000 and $300,000 a year report that they are either “not very satisfied” or “not at all satisfied” with their financial situation, he said.

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This group has also been the main beneficiary of a huge run-up in asset values since the pandemic, even though a lot of the increase is in retirement accounts and home values that they can’t necessarily tap easily. The net worth of the top 20% of earners has risen by more than $35 trillion, or 46%, since the end of 2019, according to Federal Reserve data.

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While 90% of households in the top 10% owned their primary residence in 2022, that is down from more than 94% in 2001, according to the Fed. Many affluent people who locked in low mortgage rates when they bought their homes years ago don’t feel like they can afford to upgrade. 

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