Why $75K Feels Broke in 2025

On paper, earning $75,000 to $100,000 a year should place a household squarely in the American middle class.

By historic standards, this income range signaled relative stability. Think: homeownership, college savings and maybe even a summer vacation. Yet today, a startling number of people in this bracket are living paycheck to paycheck, their financial security more precarious than that of their parents or grandparents despite higher nominal earnings.

According to the PYMNTS Intelligence August 2025 edition of the New Reality Check: The Paycheck-to-Paycheck Report, “Financial Fragility in the Middle: How Income and History Shape Consumer Risk,” more than 70% of U.S. consumers report living paycheck to paycheck, with middle-income households making up a rapidly growing share.

This paradox is what we might call the middle class mirage, a condition in which rising incomes no longer guarantee stability. The illusion of prosperity persists, but the lived reality is far more fragile.

Paycheck-to-Paycheck Living as a Moving Target

For professionals earning in the middle bracket, the problem isn’t just math but psychology. A financial cushion has always been the measure of stability: enough savings to handle a medical bill, car repair or short period of unemployment.

What’s most striking is that paycheck-to-paycheck living has increased by 3.5 percentage points in just one month (June to July 2025), mainly among those who can still cover their bills, with no signs of imminent insolvency.

Still, the report highlights that financial fragility is not a fixed state. More than half of those living paycheck to paycheck say they once had savings (53%), suggesting that their current situation reflects a downward shift rather than a permanent condition. Many attribute their slide into fragility to events that occurred during or after the early months of the pandemic. Roughly three in ten respondents who had lost their financial safety net said the decline began before July 2020, marking the crisis as a turning point.

At the same time, the survey finds that some consumers believe they can escape their current situation. About one-quarter of paycheck-to-paycheck households expressed confidence that spending adjustments could improve their circumstances, and these consumers are also the most likely to report having been financially stable at some point in the past. Their confidence reflects lived experience.

Read the report: Financial Fragility in the Middle: How Income and History Shape Consumer Risk

The middle class has long symbolized the promise of the American Dream. If that promise now proves illusory, the question becomes: what replaces it? And who will build the systems that restore stability to the very households that once anchored the nation’s prosperity?

One immediate, and obvious, answer is the employers of these paycheck-to-paycheck individuals.

According to the data, individuals with annual household incomes of at least $90,000 to $95,000 are far more likely to describe paycheck-to-paycheck living as a matter of choice rather than necessity. For individuals, the threshold appears to be $70,000 to $75,000. Below those levels, paycheck-to-paycheck living is often unavoidable.

When asked what factors enabled them to leave financial fragility behind, consumers consistently pointed to higher earnings. Nearly two-thirds of those who reported escaping the cycle said a pay raise was the most important driver, with 38 percent identifying income growth as the primary reason.

Other contributing factors included paying off debt, improved employment conditions or more affordable housing. In the short term, respondents who had recently stabilized their finances cited budgeting and credit use as important tools. Over longer periods, however, sustained income growth remained the most reliable path to resilience.

Karen Webster’s Aug. 20 column “Tariffs. Who Really Pays.” argues that tariffs act as a hidden tax that falls most heavily on America’s middle class, which is already squeezed by inflation, high borrowing costs, and stagnant wages. She says tariffs drive up prices on essentials and discretionary goods alike, forcing households that once had financial breathing room to live paycheck to paycheck. At the same time, businesses face higher supplier costs and eroding margins, creating a feedback loop in which consumers spend less, companies raise prices or cut offerings and economic strain deepens. Her thesis is that tariffs don’t punish foreign suppliers as intended but instead destabilize U.S. consumers and businesses, particularly the middle class, at a moment when they are least able to absorb the blow. It raises the stakes for whether the present moment becomes one of erosion or reinvention.

The PYMNTS Intelligence study shows that consumers are not passive in the face of constraints. Many adopt stricter budgets, restructure debt, or rely on family support to get through difficult periods. Yet the most effective and enduring solutions consistently come back to income growth and employment stability.