How much money is a lot of money?
It depends on multiple factors like your spending habits and healthcare costs, the size of your family, location, the average state income tax, and so on. As such, defining a “good salary” and directly comparing your earnings with another is complicated and impractical.
However, considering the scenario of the United States in 2023, an annual salary of 100K is “good.” For a single person or a small family of 3-4 members, $100,000 is a decent amount for sustenance throughout the year.
But again, the average annual cost for a rented home and your cost of living may vary with the state you live in. Not to forget, the craving and need to earn more and spend more is a basic condition of human existence.
So, here’s how you can determine whether $100,000 is a good salary in the US…
What Is A Good Salary?
Regardless of the factors mentioned above, a “good salary” allows you to live comfortably and pursue your desired lifestyle. Hence, you cannot compare your salary, which is, say, $80,000, to someone who may be earning $100,000 but supporting a much larger family.
So, to understand what a “good salary” is, let’s take a look at the factors that can impact your salary. You can refer to these while determining a fair salary to negotiate with your employer:
It is no surprise that more experience brings more salary. With newer skills and more expertise, any employer will be willing to pay you more. Consequently, you may bag a higher job title, too.
Here’s a look at the national average annual salaries most jobs pay according to your age:
- 16-24 years: $35,620
- 25-34 years: $50,752
- 35-44 years: $61,360
- 45-54 years: $61,412
- 55-64 years: $58,968
- 65+ years: $53,196
Based on where you live, your cost of living will vary, as prices of essentials, property, assets, etc., will be different from state to state. For instance, you live in Texas, and your friend resides in New York (one of the most expensive states in the US). Both of these US states have starkly different costs of living, and hence, your friend may require a higher salary to lead the exact same lifestyle as yours.
Here’s a look at the living wage of US citizens depending on their location:
- San Francisco, California: $86,590
- Washington, D.C.: $80,480
- Atlanta, Georgia: $59,100
- Miami, Florida: $54,790
- New York, NY: $74,150
- Nashville, Tennessee: $53,730
- Chicago, Illinois: $61,860
- Boise, Idaho: $49,440
- Phoenix, Arizona: $56,610
- Austin, Texas: $60,260
- Seattle, Washington: $76,170
- Las Vegas, Nevada: $50,360
The industry you work in can be a major factor in determining your average income. Some industries are more lucrative, while others may offer fluctuating incomes. As such, here’s a list of the gross pay of workers across all industries prevailing in the US:
- Finance: $81,420
- Construction: $61,010
- Science and Tech: $91,150
- Agriculture: $37,210
- Information: $91,930
- Real estate: $54,400
- Healthcare: $60,070
- Education: $61,620
Besides age, pursuing higher education helps expand your knowledge in a particular field and, as such, allows you to earn a higher net income. For instance, if you’re a teacher, regardless of experience, you may be able to earn higher with a master’s degree.
So, here’s an estimation of how much jobs pay in America annually, according to your education level:
- High school: $42,068
- Associate degree: $50,076
- Bachelor’s degree: $69,368
- Master’s degree: $81,848
- Doctoral degree: $99,268
How Much Do You Take Home For A 100K Per Year Salary?
If you’re earning an annual salary of 100K, remember that the entire amount is not your take-home pay. Take-home pay is basically the net income you get after the deduction of taxes, benefits, voluntary contributions, etc. Depending on your location, you will have to pay varying amounts of state income tax, federal taxes, and more.
So, considering all of these tax deductions, someone getting a gross pay of $100,000 per year will be left with a take-home pay of approximately $5,940 each month.
What Can You Afford With An Annual Income Of 100K In The United States?
Although we cannot predict your purchasing power with an annual salary of 100K, one thing is for sure – it will depend on your lifestyle and the various factors discussed above. So, for instance, if you reside in Wichita, your monthly expenses may include the following:
- House rent: $1,000
- Expenses: $600
- Bill: $1,200
- Car payment: $1,200
- Savings: $2,000
Note that this is just a hypothetical example for an inexpensive US state like Kansas, Texas, Idaho, or West Virginia. It is best to reside in these states if you’re looking to save more and ensure lower mortgage expenses.
Is An Annual Salary Of 100K Enough For A Single Person?
Generally, a salary of $90,000 per year makes one a middle to upper-class earner. As such, an annual income of six figures is more than enough to sustain a single person if their spending habits are under control.
For example, with an annual salary of $100,000, the net value you take home after deducting state income tax, state disability insurance, etc., may be around $5,940. Plus, if you live in a cheaper neighborhood or state, your monthly rent (for a single-person house) may be approximately $2,500.
So, overall, managing your personal finance effectively will leave you with $2,440 for the month.
Is 100K A Good Salary For A Family In America?
Now, for households with 3-4 family members, $100,000 is a good amount. Since not a lot of people in the US earn six figures annually, someone who earns $100,000 is generally tagged as an upper-class earner. In fact, according to a report drafted by the US Census Bureau in 2021, the median household income was $70,784.
However, if you want to ensure a comfortable life with a small family on an annual income of 100K, we recommend planning your budget and savings. Practically, it is best to spend on essentials while saving around 20% of your income for emergencies.
Do keep in mind, though, that if you’re living in expensive states like California and New York, making ends meet even with $100,000 can be challenging.
This is because the average monthly rent in these two states is on the steeper side, along with other regular expenditures. After paying federal taxes and other deductions, you may be left with merely $1,000-2,000 until the next paycheck. Clearly, the amount is not enough to sustain a family.
So, although earning 100k annually is quite an accomplishment in America, if you don’t own any property yet, it is best to move to an inexpensive state. With a relatively lower cost of living, you will be able to ensure adequate facilities for your family.
What Type Of Jobs Pay Over 100K A Year?
As mentioned earlier, certain industries pay higher than the rest. So, workers in healthcare, medicine, IT and science, accounting, legal and project management are more likely to make $100,000 annually compared to the rest.
Some jobs that pay an annual income of 100K in America include law, petroleum engineering, nursing, IT management, software development, and financial management. As such, bagging a position in these sectors is the first step to financial independence!
What Percentage Of Americans Make Over 100K?
According to a study conducted by Policy Advice, 15.5% of Americans earned an annual income of $100,000-$149,999 in 2019. Meanwhile, 8.3% of the workers residing in America made $150,000-$199,999 per annum. Finally, 10.3% of the population was living the ultimate American dream by earning over $200,000 every year!
Can You Become Rich If You Make 100K A Year?
To become financially independent and ensure a comfortable future after retirement, you must start saving as early as possible. Because at the end of the day, becoming “rich” does not depend on your income but rather on your savings.
Any financially independent person in the US will testify that it’s not about how much you earn but how much you retain.
Now, considering the national average income, earning $100,000 is quite an accomplishment. It is not a small amount, so consider saving $10,000-20,000 every year, and let the compound interest work in your favor!
How To Bag A High-Paying Job In The US?
Your income largely determines your overall job satisfaction. While it may not always guarantee “happiness,” it does offer financial stability and social security to the worker. Hence, applying for a job in any one of the aforementioned high-paying sectors is essential, and here’s how you should get started:
1. Seek Career Counseling
Getting advice from a mentor will go a long way in advancing in the right career path and achieving professional success. Not to forget, a reliable and helpful mentor will not hesitate to connect you with other resourceful people from the desired field. According to their experience and success, they will be able to guide and motivate you effectively.
So, if your company holds a career counseling or mentorship program, make the most out of it by sharing your doubts, queries, and professional goals.
2. Attend Networking Events
Believe it or not – 70% of job openings are not publicized, and 80% of jobs are filled through connections. Hence, networking is essential in learning industry trends as well as seeking career opportunities. When attending networking events, we recommend carrying your resume or business card to introduce and sell yourself effectively.
3. Gain Expertise
In the United States, the skill gap in the workforce is constantly growing, making it difficult for companies to fill openings for high-skill positions. Thus, it is best to advance your knowledge and expertise to gain the edge over other job applicants and bag the high-paying job role you have always dreamt of.
Consider enrolling for additional training courses, or getting a higher degree. You can also attend webinars to expand your knowledge in a particular field.
4. Future-proof Your Skills
With the boom of sophisticated technology and artificial intelligence, most jobs do not need any human resources at all. As such, it is important to get with the times and develop skills that will “future-proof” your role in the company.
But note that even though technology has replaced manpower in many industries, it can never beat the better judgment of humans! Take information security analysts and data scientists, for example. These job roles are growing immensely in terms of income as cybersecurity issues have reached an all-time high.
So, upskilling is imperative to stay relevant in today’s dynamic job market.
Ways To Increase Your Salary
For instance, you’re already working in a high-paying industry but still haven’t reached the 100K mark. Besides expanding your skill set, as discussed above, here’s what else you must do to achieve your financial goals in 2023:
1. Ask And Negotiate
It really doesn’t get more obvious than this! If your annual income is not at par with the market value, ask your employer for a raise or a promotion. You don’t have to be too uptight and argue; instead, negotiate and explain how you are an asset to the company and deserve higher pay.
2. Switch Jobs
Of course, if your employer refuses a raise/promotion, it’s best to switch to a higher-paying job or industry if you qualify. You may have picked up several transferable skills throughout the years that may make you eligible for various jobs in different industries.
3. Create A Passive Income Stream
Besides saving and investing, you can try starting a side hustle. It can be as simple as renting out a room in your house to create a source of passive income.
As you can see, despite the high state income tax and healthcare costs in certain states, an income of $100,000 is sufficient for a single person. For a small family of 3-4, 100K is a good amount if you live in an inexpensive state like West Virginia.
Regardless, it is best to plan your budget wisely and save a percentage of your income for emergency maintenance, healthcare costs, and the overall sake of your future.
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