Is $100,000 a Good Salary in 2022? [In America]


Once upon a time in the United States, a $100,000 salary was considered a mark of success. But what about now?

This post takes an informed look at how $100,000 per year in the United States stacks up in 2022. 

Comparatively speaking, in the US, $100,000 a year is a great salary. However, geography, lifestyle, and spending habits each play a role in how far a $100,000 salary goes. A family or single person won’t accumulate massive wealth on this wage alone, but with proper saving and investing strategies, one can stretch $100,000 a long way.

For example, a family or individual living in California will not enjoy the same disposable income on $100,000 as a family or individual residing in Texas. We’ll take a closer look at these two states as examples with a comparative analysis.

But for now, let’s examine this $100,000 salary a bit further.

Quick Note: The figures in this post are based on 2021 statistics, depending on when you read this post, this data has likely changed.

What Percentage of Americans Make Over $100K?

The national average salary hovers around $74,378, while most salaries exist between $44,500 and $97,000.

The District of Columbia, Massachusetts, Connecticut, and New Jersey boast the highest average salaries, with the District of Columbia topping the list at $88,702. Mississippi, West Virginia, Kentucky, and New Mexico have the lowest average salaries, with Mississippi coming in at $41,776. 

Across the US the majority of earners gross less than $100,000. According to labor statistics, in 2020 only 30.7% of all households earned over $100,000. The national median salary for an individual worker in 2021’s second quarter was $51,480. 

What Types of Jobs Pay Over 100K?

The list is too extensive to complete in one post, so here’s a snapshot of some industries that pay $100,000 per year:

  • Medicine
  • Legal
  • Technology
  • Science
  • Human Resources
  • Accounting
  • Healthcare
  • Project Management

Looking a little closer, here are some specific jobs that pay $100,000 per year: 

  • Medical and Health Services Manager
  • Software Developer
  • Nurse Practitioner
  • Pilot
  • Lawyer
  • Financial Manager
  • Petroleum Engineer
  • IT Manager

What Can You Afford with a $100,000 Salary?

Wealth is value attained separate from income. Individuals informally polled stated that $100,000 per year was a great salary to live on comfortably. Yet some correctly stated that in today’s economy, $100,000 per year won’t generate great wealth and is the minimum salary necessary for retirement savings. 

Several variables exists, such as location, whether one is single or has a family, or desires to own real property or travel, etc.  

Taxes

At $100,000, federal taxes in California would be $15,009, state income tax $6,601, with Social Security, Medicare, and California’s State Disability Insurance totaling another $8,850 per year. Total taxes would be $30,460, netting $69,540 or 69.5% of gross pay for the year. 

Conversely, a Texas resident earning $100,000 a year pays $15,009 in federal taxes, but pays zero state income tax or state disability insurance. While Social Security and Medicare costs remain the same, a Texan’s total taxes at $100,000 salary is  $22,659.00, with a net income of $77,341, or 77.3% of gross pay.

That’s a location-based savings of $7,801 to the Texas resident!

While it’s true that Texans pay property taxes based on the assessed value of their real property, exemptions exist that may help deflect those costs. 

Although one could perform a similar analysis between other states, between California and Texas the earner is left with between 69.5% and 77.3% of their gross pay. Now let’s examine where that money will go. 

Geographic Location

If you want a California beach condo, you’ll likely need other income sources. If you want a simple country life in picturesque Texas, a $100k salary alone should be sufficient. Of course, many state-to-state comparisons are possible, but the contrasts between these two states illustrate the importance of location in the life of a dollar. 

Cost of Living

The average building price per square foot (sq ft) of a best standard single family home in California is $172.92, while the same home in Texas would cost an average of $166.57 per sq ft. Consider a 2,000 sq ft home: In California it would cost you $345,840, whereas in Texas the same home would cost $333,140, or a difference of $12,700. 

Renting a home or an apartment has a different breakdown but the same analysis. A renter in Austin, Texas, might pay an average of $1.95 per sq ft, or about $2,340 monthly rent for a 1,200 sq ft apartment. By comparison, the same size apartment in San Diego might cost $2.97 per sq ft, or $3,564 per month. 

Debts and Student Loans

Debts, including student loans to attain a $100,000 per year job, will eat away at your disposable income.

If you owe hundreds per month dedicated to student loans or high-interest credit debts, your $100,000 salary’s ability to accumulate wealth dwindles.  

That’s just common sense! But of course, some times you have to spend money to make money. But just be careful, do you really need to go to Harvard for your undergrad?

Things to Consider When Living Off $100,000 per Year

Job Satisfaction

The zeros behind your income may not be worth the hassle. A $100,000 salary for the 65% of Americans satisfied with their job, or the 20% who are passionate about their jobs, is better than $150,000 for a person who hates their job.

In my opinion anyway!

Hours worked, time off with family, and responsibilities of the job all need to be considered. 

Again, common sense. But like most people, I’d rather make less and be generally passionate about my job then make a little more and dread it. Think about the amount of time we spend working, how can someone who hates their job be truly happy?

Transportation Costs

A gallon of gas in California today averages $4.54, soaring $1.16 above the national average. Fueling a car with a 16-gallon tank in California would cost $72.64, while topping off the same car in Texas is $54.08, a savings of $18.56. For a person filling up once a week, the annual difference is $965.12.

Maintenance, registration, insurance, and toll fees also add up to several thousand a year, taking another chunk of your annual net-pay. And again, the cost of living in different geographical locations will impact the values of these costs.

Quick Reminder: The data in this post are based on 2021 statistics, depending on when you read this article, this data will have likely changed.

Living Expenses

Increased housing and fuel costs drive up others. Healthcare, groceries, clothing, and entertainment costs differ by state. A single adult Texan eating at a cost of $3,177 per year would pay $3,792 for the same food in California.

Healthcare costs also vary greatly state-to-state, and this is certainly the case between California and Texas. Referencing the previously mentioned study, an individual has to have 28.5% more income for a living wage in California when compared to Texas costs, such as healthcare. 

Saving and Planning for Retirement

Inflation, the loss of purchasing power of time, rose 6.2% in the US in 2021. In any state, a $100,000 per year earner will be more limited in their yearly savings and investment potential as each year passes. 

Thanks a lot inflation…

With that said, the recommended retirement amount for an American in their 60s is anywhere from 8-10 times their annual salary.

So assuming you saved $10,000/year at a 6% for 30 years, compounded annually, a person would have $895,542 at retirement. With this alone or an additional employer retirement account, retiring comfortably while making $100,000 a year for your career is very doable.

Thanks a lot compound interest!!!

Conclusion: The $100,000 per Year Dream

Landing a job paying $100,000 per year is quite an accomplishment. So if you’ve managed this, bravo.

At this salary, an earner is making nearly twice as much as the median salaried worker in the United States in 2021. However, as examined in this post, whether $100,000 accumulates a large amount of wealth depends on geography, lifestyle, spending and investing habits, and overall job satisfaction.

Geek, out.

Noel

Noel is the founder and main contributor for his blog - Noel's passion for personal finance has helped him amass over 600k readers to his Financial Geek blog.

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