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This budget shows how a $350,000 salary barely qualifies as middle class

Most Americans would probably have a hard time wrapping their heads around a $350,000 salary. In fact, government data cited by Sam Dogen of the Financial Samurai blog shows that some 95% of U.S. households don’t pull in that much. The median household income in the U.S. is $57,782, with places like San Francisco and New York City showing medians income for a family at $96,265 and $79,781, respectively, according to the U.S. Census Bureau.

Also see: ‘This money has been a life changer’ — a woman living on the poverty line inherited $150K and shares her financial plan

The thing is, that kind of income, while relatively huge, is barely enough, according to Dogen, for a family to lead a comfortable life in coastal counties — where almost half of the nation’s population calls home.

“You can certainly live a middle-class lifestyle earning less, but it won’t be easy if your goal is to raise a family, save for your children’s education, save for your own home and save for retirement (so you can actually retire by a reasonable age),” he wrote in a post published on CNBC on Wednesday.

Dogen uses this budget to illustrate his view:

He said that the numbers have been vetted by thousands of Financial Samurai readers who face raising their families in expensive cities like San Francisco, Los Angeles, New York, Boston and Washington, D.C.

As you can see, the annual cash flow ends up being only $1,456, which doesn’t go very far should unexpected expenses pop up. As they do. Along with making for stressful bill paying, this doesn’t bode well for an early exit from the proverbial rat race.

Read: This Kansas couple’s budget problem is even more troubling

“Unfortunately, despite making $350,000 a year, this couple will be unable to retire before 60 because they aren’t building an after-tax investment portfolio to generate passive income,” Dogen wrote. “In order for this couple to achieve financial independence, they need to accumulate a net worth equal to at least 25 times their annual expenses — or 20 times their annual gross income.”

Dogen says that means the couple has to build up between $5.5 million and $7 million in net worth if their income and expenses remain unchanged.

“That’s tough to do with so little in savings per year,” he said.

Dogen says if the goal is to amass wealth and hit the FIRE goal (financial independence, retire early), the couple needs to consider moving to a more affordable area, go to public school, limit vacations, eat at home more often and track it all so they get to understand their situation and their goals.

“We all deserve to live a middle-class lifestyle,” he wrote on CNBC. “Unfortunately, we’ve first got to sacrifice more than ever to get there today.”

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