Here are the Cities Where a $100K Salary Goes the Furthest
In many cities, residents need to earn more to have the purchasing power of a $100,000 salary.
As real estate developers decide which markets are suitable for their investments they have a wealth of demographic data to help them make a decision. One that may be missing from their arsenal, however, is how rich or well off consumers feel.
SmartAsset, a provider of consumer-focused financial information, took a stab at this with an analysis that measured how far the much-ballyhooed “six-figure salary” of $100,000 — typically cited as a marker of financial success — really goes.
Those with a $100,000 salary earn more than double the median individual income for 2021, but when accounting for taxes and cost of living in America’s largest cities, this salary may not equate to being, or at least feeling, that well off, SmartAsset found. To have the purchasing power of $100,000, residents of many cities will have to earn a substantially higher salary.
The purpose of the study was to determine the salary it takes to feel like $100,000 across the U.S. by analyzing annual salaries in 76 cities and adjusting them for taxes and cost of living.
In three cities — Honolulu, New York City and San Francisco — a person needs to make three times the amount ($300,000 or more) to feel they’re bringing home “the new $100k”. These cities have taxes income roughly 40.5% or higher and a cost of living more than 82% above the national average. In New York City, $100,000 feels more like $35,791, SmartAsset calculated.
On a state basis, high-tax, high-cost Californian cities such as San Francisco, Oakland, Los Angeles, Long Beach and San Diego require the highest gross incomes collectively. Bay Area residents, for example, need to earn at least $147,000 per year to live in comfort.
On the other end of the spectrum,Texan cities offer the greatest odds of $100,000 feeling as such. Salaries in El Paso, Corpus Christi, Lubbock, Houston, San Antonio, Fort Worth and Arlington can be as low as $119,300 while feeling like a true $100,000, due to low income taxes and high affordability.
Among all cities taken into account for the study, Oklahoma City had the lowest cost of living, helping close some of the gap between the real $100,000 and adjusted version. With a cost of living that is only 83.2% of the national average, in Oklahoma City a $100,000 salary in the city is worth $84,498, according to SmartAsset’s formula.
Overall, however, Memphis came out as the city where $100,000 goes the furthest. Adjusted for taxes and cost of living, it feels more like $86,444 for locals. Other cities where the gap between real and perceived income is lowest include El Paso, Corpus Christi, Lubbock, Houston, San Antonio, Fort Worth and Arlington in Texas; and St Louis, MO.