Why earning $100k a year in USA doesn’t put you in the wealthy category anymore
Inflation has been a big concern across the globe and USA is no different when it comes to suffering from its impact. As per a report by Forbes, purchasing power of $100k a decade ago was a lot more than what it is today. The report points to data from the Bureau of Labor Statistics, as per which today’s $130,000 has the purchasing power of $100k a decade ago.
Moreover, the purchasing power of $100k varies from place to place in USA. In present times, if a US citizen earns $100k in Manhattan, his spending costs will be very high given the high rent prices and exorbitant tax rates at the place. For any particular person, if we factor in the burden of loans, credit card bills and any health calamity, the $100k will look very less.
According to a recent report from PYMNTS and LendingClub, more than half of Americans who earn over $100k a year live paycheck to paycheck. The report points out that financial situation will worsen in 2023.
SmartAsset compared the after-tax income in some of USA’s biggest cities and adjusted for the cost of living. Here is how much earning $100k a year is worth in different parts of USA.
Where a $100k salary goes the furthest and the take-home pay:
- Memphis, Tenn.: $86,444
- El Paso, Texas: $84,966
- Oklahoma City, Okla.: $84,498
- Corpus Christi, Texas: $83,443
- Lubbok, Texas: $83,350
- Houston, Texas: $81,171
- San Antonio, Texas (Tie): $80,124
- Fort Worth, Texas (Tie): $80,124
- Arlington, Texas (Tie): $80,124
- St. Louis, Mo.: $79,921
Where a $100k salary is worth less and the take-home pay:
- New York, N.Y.: $35,791
- Honolulu, Hawaii: $36,026
- San Francisco, Calif.: $36,445
- Washington, D.C.: $44,307
- Long Beach, Calif. (Tie): $44,623
- Los Angeles, Calif. (Tie): $44,623
- San Diego, Calif.: $46,167
- Oakland, Calif.: $46,198
- Boston, Mass.: $46,588
- Seattle, Wash.: $48,959
Meanwhile, there are over 24.4 million people in the United States with wealth greater than $1 million, thus making up about 8.8% of the total population. As per Forbes, finance and investments are the sectors which produce America’s richest persons. In recent times, entrepreneurship, including building tech startups have been the forces behind the wealth gain by many new millionaries.
As per a wealth expert named Tim Corley who has interviewed hundreds of millionaires, many accumulated wealth by practicing frugality and regularly saving and investing about 20% or more of their income.
