Making $100,000 a year or more used to be a milestone that denoted success and financial freedom. However, with inflation and the rising cost of living, many people are wondering if a $100k salary is still considered a good salary in today’s economy.
Is a $100k salary a good salary?
Whether or not a $100k salary is considered good depends greatly on where you live. In lower cost-of-living areas in the Midwest and South, a $100k salary would allow you to live very comfortably. However, in expensive coastal cities like New York and San Francisco, it may be challenging to maintain a middle-class lifestyle on this salary.
Here are some key factors that determine whether a $100k salary is still good in today’s economy:
- Cost of living – Huge variances exist based on location.
- Your household size – More mouths to feed means you need higher income.
- Your existing debts – Large debt payments make that salary not go as far.
- Your personal lifestyle – Frugal people can do more with less.
How far does a $100k salary go in different cities?
To demonstrate the massive impact location has, here’s how far a $100k salary goes in different U.S. cities according to a cost of living calculator:
| City | Equivalent Salary Needed |
|---|---|
| San Francisco, CA | $223,148 |
| New York, NY | $186,628 |
| Washington, DC | $123,349 |
| Denver, CO | $112,656 |
| Austin, TX | $107,210 |
| Atlanta, GA | $91,430 |
| Chicago, IL | $88,027 |
| Dallas, TX | $85,442 |
| St. Louis, MO | $79,337 |
As you can see, $100,000 in San Francisco is equivalent to only $45,009 in St. Louis when accounting for cost of living differences. Location makes a huge impact on how far your salary will go.
What is considered a good salary in major U.S. cities?
Based on the table above, here are some good rule of thumb salary ranges for major U.S. cities:
- High cost areas (SF, NYC): $150k+ is good
- Medium cost areas (Denver, Austin): $100k-$150k is good
- Lower cost areas (St. Louis, Atlanta): $70k-$100k is good
Of course, you can live on less depending on your household size and expenses. But in general, these are good benchmarks for salaries that allow a comfortable middle-class lifestyle.
Factors impacting the value of a $100k salary
Setting location aside, here are some other factors that impact whether a $100k salary is considered good in today’s economy:
Household size
A $100k salary goes a lot further for a single person than for a family of five. The number of people you need to support greatly impacts the purchasing power of your salary.
Existing debt obligations
Large student loan, credit card, or car payments can reduce the amount of income you actually have available for other expenses. $100k minus $2k per month in debt payments does not provide as much financial flexibility.
Your personal lifestyle
Frugal people can live well on less income. If you’re accustomed to living large with expensive tastes, you may feel limited by a $100k salary. Your savings and spending rates are what matter most.
Conclusion
At the end of the day, a $100k salary is still considered a very solid income. However, due to rising costs and your specific circumstances, it may not mean living a life of luxury. Focus on keeping debt low, living within your means, and choosing an affordable location if you want a $100k salary to go far.
