NEW YORK ( MainStreet) — Arabella Costello earns a six-figure income working for a hedge fund in Washington, D.C. The 35-year-old makes monthly payments on a 2012 Mercedes, owns an $85,000 condominium in Georgetown and maintains timeshares for quarterly vacations in both Aruba and Cabo.

At the end of the day, Costello's $100,000 annual earnings are really only worth half after taxes, retirement savings and paying off debt.

"It seems that my paycheck is shrinking, because of all the taxes and bills I pay," Costello told MainStreet. "I need to earn more money, because $100,000 isn't enough to maintain the lifestyle I've created and save money for retirement."

Inflation-adjusted real wage gains have been stagnant over the past ten years if not negative in some periods.

"In the 1970s and 1980s, a six-figure income was a lot of money," said Wes Moss, chief investment strategist with Capital Investment Advisors. "Earning $100,000 in 1980 was the equivalent today of an estimated $280,000 income today at 3.16% inflation over 33 years. Today that $100,000 is the equivalent of an estimated $36,000 in 1980."

In other words, although Costello's paycheck reflects an income of $100,000 a year, the hedge fund administrator is really only earning $35,000 annually.

"The relationship between inflation and wages is a complex one but over time wages should rise along with inflation. So, while goods and services cost more, generally wages also rise," said Eric Meermann, certified financial planner with Palisades Hudson Financial Group in Scarsdale, New York.

Wealth is defined generally as an abundance of valuable possessions or money.

"Defining wealth by total annual income is a mistake," Meermann said. "Quite a few wealthy people have very low incomes and a large amount of assets. Others earn more than $100,000 but are not wealthy, because they spend it all. Wealth is more of a balance sheet issue than an income statement issue."

Making a dollar worth more than a dollar is extremely difficult in a rising interest rate environment.

"My clients who earn the most amount of money are typically in revenue producing careers," Moss said. "They are in some way tied to the revenue in their company so that the upside of their income is not limited."

For example, the uncapped billable hours of doctors and lawyers in a professional practice can be revenue generation careers.

"Revenue generating careers are positions in which you are responsible for bringing business into the firm," Moss said. "It can be any sales oriented positions, such as a business owner or consultant, where you have unlimited upside."

Finally, what someone with a $100,000 income can afford is different in Manhattan than it is in Portland, for example.

"The notion of wealth is subject to regional cost-of-living differences and overspending.