Determining what salary is considered “good” at any age is a complex question with many factors to consider. However, for Americans around the age of 40, there are some general benchmarks that provide a helpful starting point.
In your 40s, certain financial goals become especially important. These include saving for retirement, paying off debt, building an emergency fund, and potentially supporting children and aging parents. Therefore, when evaluating salary sufficiency at this stage of life, key considerations are:
- Meeting basic needs for housing, food, transportation, healthcare, etc.
- Having enough disposable income to achieve financial goals
- Earning enough to maintain your lifestyle
- Keeping up with inflation and cost of living increases
With those factors in mind, let’s explore some data-driven perspectives on what could be considered a “good” salary at age 40.
Average and Median Incomes
One approach is to look at national averages and medians. According to the U.S. Census Bureau, the median household income for householders aged 35-44 in 2021 was $76,832. The median represents the midpoint of incomes—half earned more and half earned less.
The average (mean) income for the same age group was $102,801. Averages are higher due to very high earners skewing the data upwards.
So purely statistically, incomes in the range of $75,000 to $100,000 could be considered solidly middle-class for Americans around 40. However, keep in mind that these broad figures encompass all locations, household types, education levels, and occupations. You may need to earn significantly more or less depending on your specific circumstances.
Income by Location
Cost of living varies tremendously between different parts of the country. While the national median household income is around $77,000, here are the median incomes for 40-44 year-olds in select metropolitan areas according to 2021 Census data:
- San Francisco, CA: $141,417
- Washington, DC: $122,516
- New York, NY: $102,646
- Los Angeles, CA: $78,672
- Chicago, IL: $75,947
- Dallas, TX: $72,330
As you can see, salaries considered solidly middle-class on a national level could mean struggling to get by in a high cost-of-living area like San Francisco. Or conversely, an amount that feels tight in Chicago could offer relative affluence in a city like Dallas. Location matters significantly.
Income by Household Type
Household composition is another key factor influencing adequate income. Single adults have different financial needs than married couples, and parents supporting minor children require even more resources.
Here are the median incomes for 40-44 year-olds based on household type:
- Married couple household: $102,037
- Male householder, no spouse: $61,679
- Female householder, no spouse: $47,037
Two incomes clearly provide more earnings potential. And single parents face greater financial strain, especially single mothers according to the data. A salary producing a comfortable middle-class lifestyle for a dual-income family may not suffice for a single parent.
Income by Education
Education level attained has a significant correlation to earnings. Here are the median incomes for 40-44 year-olds based on education level, according to Census data:
- Less than high school diploma: $36,124
- High school graduate: $56,858
- Some college or associate degree: $67,300
- Bachelor’s degree: $97,069
- Graduate or professional degree: $121,656
The difference in salary between those with no degree versus an advanced degree is substantial. A middle-class income with a high school diploma may qualify as poverty-level for someone with substantial student loans to repay. Education is a key factor in income potential.
Income Recommendations by Age
Several government and nonprofit organizations publish recommended income guidelines based on factors like age, location, household size, and more.
These income recommendations aim to define earnings needed to cover basic necessities and maintain a modest standard of living. Here are some examples specifically for age 40:
Federal Poverty Level
The U.S. Federal Poverty Level (FPL) for 2023 defines poverty as earning below $13,590 for a single person or $27,750 for a family of four. This threshold is used to determine eligibility for many government assistance programs. An income even twice the FPL or more could still be very tight in higher cost areas.
MIT Living Wage Calculator
MIT provides a Living Wage Calculator that estimates the minimum income needed to meet basic needs based on location, household size, and other inputs.
For example, the living wage for a single adult with no children in Cincinnati is $31,594. In San Francisco it is $65,295 – more than double. This calculator can estimate localized incomes needed for a basic but decent standard of living.
Economic Policy Institute Family Budget Calculator
The Economic Policy Institute publishes annual Family Budget Calculators determining adequate incomes for households ranging from 1 to 5 people.
Unlike the poverty level or living wage, these recommendations aim to support a “modest yet adequate standard of living”. Budgets include savings, recreation, healthcare, and other necessities.
For a 2-adult, 2-child family, their 2022 adequate income estimate was $107,640 nationally. That rose to $166,231 in the expensive San Francisco area. This gives a more comfortable target for supporting a family in different parts of the country.
75th Percentile of Earners
Rather than looking at minimum recommended incomes, another approach is benchmarking against top earners. Income data indicates that households earning above the 75th percentile in their area achieve financial stability and discretionary spending.
Nationally, 75th percentile incomes are around $115,000 for 40-44 year-olds. But top earning thresholds again vary significantly by location:
- San Francisco: $218,933
- DC: $191,978
- Seattle: $161,227
- Los Angeles: $132,755
- Chicago: $120,922
- Dallas: $113,102
Earning in the top 25% locally supports financial flexibility and home ownership in almost all areas. This benchmark provides a view of a “good” salary that offers more than just making ends meet.
Income Needed for Major Purchases
Your specific income needs also depend on personal lifestyle and spending choices. Here are some typical major purchases people make in their 40s and the recommended salaries needed to support them:
| Purchase | Recommended Minimum Salary |
|---|---|
| New car | $50,000 |
| European luxury car | $150,000 |
| Downpayment on a median home | $75,000 |
| Luxury home downpayment | $250,000 |
| Full college tuition | $80,000 |
| Lavish annual family vacation | $120,000 |
As you can see, being able to afford major expenses often requires earning significantly more than average salaries. Prioritizing your own lifestyle, family, and spending choices determines how much income you really need.
Conclusion
What constitutes a “good” salary at age 40 depends heavily on your individual circumstances. For a single person in Texas, $60,000 could provide a solid middle-class lifestyle. A family of five in California may struggle on $150,000. And aspirations for home ownership, travel, luxury vehicles or other major expenses will drive income needs even higher.
While national median and average incomes provide some guidance, looking at localized data by household size and education level offers a more personalized perspective. Comparing your income to minimum living wage recommendations and top earning thresholds can indicate whether you are earning enough for basic needs or financial flexibility. And thinking through your own priorities and upcoming major expenses establishes an ideal target income range to aim for in your 40s and beyond.