New York (Washington Insider Magazine) — In the United States, a 100K salary a year can be considered to be a great salary. However, geography, lifestyle, and spending habits play an important role in determining how good a 100K salary is for a person. If you do proper saving and investing strategies, then you will be able to stretch the 100K salary and go with it a long way to achieve the life of your dreams.
Is 100K A Good Salary?
Individuals who have 100K salaries can live a lavish life and enjoy all the modern amenities. It is a great salary figure that will allow you to live your life comfortably. In today’s economy, 100 K per year will not generate great wealth as it is the minimum salary suitable for just your retirement savings.
What Can You Afford With A 100 K Salary?
Here is the breakdown of expenses that a 100K Salary person normally has to pay:
1.Taxes
With an average salary of 100K, the individual has to pay federal taxes in California. The state income tax is around $6,601. Social Security, Medicare, and California’s State Disability Insurance amount to another $8,850 per year. The total taxes that a 100K salary person has to pay is around $30,460. A Texas resident earning $100K a year pays $15,009 in federal taxes. A Texan’s total taxes is $100,000.
2. Geographic Location
If you want to live in a California beach condo, then you will need other income sources. If you want a simple country life, then a $100k salary can be sufficient.
3. Cost of Living
The average building price of a good standard for a single-family home in California is $172.92. if you are looking for a home in Texas then that would cost an average of $166.57 per sq ft. A rented apartment in Austin, Texas, will be available at an average price of $2,340 monthly rent. The same size apartment in San Diego will cost you around $3,564 per month.
4. Debts and Student Loans
Debts, which include student loans can take away disposable income. If you owe hundreds per month then your $100,000 salary will not be sufficient.
5. Transportation Costs
A gallon of gas in California costs $4.54, and it has been soaring $1.16 above the national average. Fueling a car with gas in California would cost $72.64. The same fuel in Texas will cost $54.08 and will allow you to do savings of $18.56. If you use public transport, then you are likely to save a lot of money. It is best to save your salary and invest less in transportation as this will allow you to afford a better living in the future.
6. Living Expenses
Increased housing and fuel costs can increase the cost of your living. If you like to live a luxurious lifestyle, then your living costs are likely to rise a lot. The Healthcare, groceries, clothing, and entertainment costs can differ a lot from person to person. A single adult living in Texas is likely to spend a lot if they like to eat out at a restaurant.
Healthcare costs also vary from state to state. The health care systems are expensive all over the United States. If you fall sick and don’t have any insurance, then you might have to pay a lot to get treated at a good hospital.
7. Saving and Planning for Retirement
Every person earning a salary of 100K wants to save some money for their life after retirement. It is better to plan ahead of time as this will help you to live your life comfortably. A person earning $100,000 can have limited savings per year.
The yearly savings and investment potential for a 100K salary individual is not that much. The recommended retirement amount that an American must save for their life after retirement should be 8-10 times their annual salary.
If you have saved at a 6% for 30 years, then a person would have an estimated income of around $895,542 at the age of retirement. With this much saving $100,000 salary earners can live their life comfortably after retirement.
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Final Words
If you are working at a company that pays you $100,000 per year then it is quite an accomplishment for you. So if you’ve managed this, bravo. At this salary, you can enjoy an urban lifestyle.
A 100 K salary person in the United States can expect to save a lot of money if they don’t spend too much on daily basis. However, the spending on your daily activities determines your savings and the life you will live after retirement.
