That’s as far as a $100,000 salary goes in the cheapest — and least affordable — US cities
- March 17, 2023
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A six-figure salary has long been considered an indicator of financial success. But with the ever-rising cost of living, $100,000 doesn’t offer much financial security in some major US cities.
In the most expensive areas — New York, San Francisco and Honolulu — $100,000 gives you the same quality of life as someone making $36,000 a year almost anywhere else in the country, according to a new analysis by the Personal Finance Journal Smart Asset website.
For the report, SmartAsset used its paycheck calculator to subtract state, state, and local taxes from a $100,000 salary, then adjusted the rest based on each city’s relative cost of living.
The place that offers the best bang for your buck? Memphis, Tennessee, where a six-figure earner would have the equivalent of $86,000 left over after taxes. Tennessee has no personal income taxes, leaving the hypothetical employee with $74,500 after federal taxes. But the low cost of living in Memphis equates to a net salary of $86,400 elsewhere in the US
Most locals earn far less than this amount, it’s worth noting. The average household in the Memphis metro area makes $55,000 a year, less than the national average of nearly $70,000.
Texas was another big winner in SmartAsset’s ranking, with seven of the top 10 cheapest cities included in the calculation: El Paso, Corpus Christi, Lubbock, Houston, San Antonio, Fort Worth, and Arlington.
At the other end of the spectrum, New York ranks last in terms of affordability, with a salary of $100,000 in the Big Apple equating to just $36,000 in net pay elsewhere in the nation.
California ranks high on the list of least affordable cities, with the top 10 most expensive cities including San Francisco, Los Angeles, Long Beach, San Diego and Oakland. About 4 in 10 households in the state make over $100,000, census data shows, but home prices in the state have skyrocketed enough for a family of four earning a six-figure income to be eligible for federal assistance in San Francisco and other parts of the state State has Bay area.