Is a $100,000 salary good?

Is a $100,000 salary good?

Is a $100,000 salary good?

In most of the country, a $100,000 salary is considered good; maybe even very, very good. More than enough for one person or even a small family to live comfortably.

With $100,000 a year, a person can cover general expenses, pay off debt, build savings, contribute to retirement, invest, and still have enough money for entertainment, hobbies, and vacations.

But there are bound to be exceptions to whether $100,000 a year is a good idea, and ways to make that salary go further than it would otherwise. Here, we’ll take a closer look at that salary, including:

  • How does a $100,000 salary compare to the US median income
  • Percentage of people earning $100,000 a year
  • How a $100,000 salary breaks down
  • What are the best and worst places to live with an annual income of $100,000
  • Tips for living on $100,000 a year.

Factors That Determine If a $100,000 Salary Is Right

Is $100,000 a good salary? In almost all cases, yes. It is well above the poverty line and the median income for individuals and small households in the United States. An annual income of $100,000 often provides a comfortable lifestyle and financial stability even in the face of rising inflation.

Here are some factors that determine if $100,000 is a good salary:

  • Location: While $100,000 will cover most of the US, it won’t go that far in places with a higher cost of living. In some of the most expensive cities in the U.S., a $100,000 salary can mean spending a significant portion of your income on housing. For example, in the summer of 2022, the average rent in Manhattan will reach $5,000 per month.
  • Taxes: As an individual, $100,000 per year nets you 24% federal income tax. That means you’ll only be taking home $76,000 after federal taxes — or even less, depending on state, city and school district taxes. Married individuals bring in a slightly lower rate (22%) on $100,000 in gross income, or $78,000 after cutting Uncle Sam at the federal level.
  • Family size: Most people can live comfortably on $100,000 a year, but the larger the family, the harder it is to earn that money. Additional children or other dependents can lead to higher grocery bills, utility bills, school fees, and doctor visits.

How does a $100,000 salary compare to the median income in the United States?

According to the most recently released US Census results, the median US household income is approximately $67,500. Most recently, the Bureau of Labor Statistics reported that the median weekly earnings of full-time workers was $1,037, which equates to a median annual salary of $54,000.

Either way, a $100,000 salary is nearly double the median U.S. income. If you live in a so-called DINK household (dual income, no kids) and your common-law partner also brings home a decent salary, your median household income is even higher.

How many Americans earn more than $100,000 a year?

According to the U.S. Census Bureau, only 15.3 percent of U.S. households earn more than $100,000 a year. However, a “household” may consist of two or more wages totaling $100,000.

$100,000 Salary Breakdown

So how about making $100,000 a year? That’s almost certainly easier than living on $20,000 a year. Let’s see how it breaks down into monthly, weekly and even daily salaries:

  • Monthly income: $8,333.33
  • Biweekly salary: $3,846.15
  • Weekly earnings: $1,923.08
  • Daily earnings: $384.62, based on 260 working days per year.

Keep in mind that this payroll statement uses pre-tax earnings. Actual salary after taxes may be lower, net of any health insurance premiums and retirement benefits.

Can you live independently on an income of $100,000?

It is indeed possible to live independently on an income of $100,000. With such a salary, many people can cover not only basic living expenses but also discretionary expenses such as eating out and travel.

Individuals earning $100,000 a year typically have enough disposable income to pay off debt, contribute to retirement, work toward multiple savings goals (such as home ownership and vacations), and even invest.

How much rent can you afford living on $100,000?

The general recommendation is to spend no more than 30% of your income on housing. Economists may need to reassess that figure given current inflation and soaring home prices, but it means a person could pay $30,000 a year in rent, or about $2,500 a month, or $100,000 a year.

However, at $100,000 per year, an individual could consider buying a home. A $100,000 salary might be easier to save for a down payment and keep up with maintenance, property taxes, and homeowners insurance.

Best Places to Live for $100,000 Annual Salary

For $100,000 a year, one person or a small family can probably live in most places. In fact, $100,000 is higher than the median annual income ($65,290) of Los Angeles, the most expensive city in the United States.

That said, if you want to get the most out of your money, consider U.S. News’ five cities with the lowest cost of living in 2022:

  • Hickory, NC
  • Green Bay, Wisconsin
  • Huntsville, Alabama
  • Quad Cities (Davenport-Bettendorf, Iowa and Moline-Rock Island, IL)
  • Fort Wayne, Indiana

The worst places to live on a $100,000 salary

Even in America’s most expensive cities, a $100,000 salary can usually cover at least basic living expenses. However, living in such a place can make it harder for you to accumulate savings and invest in the future.

If you want to live comfortably on $100,000 a year, you’d be wise to avoid the cities considered to be the most expensive to live in America in 2022:

  • Los Angeles, CA
  • Miami, Florida
  • San Diego, CA
  • Salinas, CA
  • Santa Barbara, CA

Is a $100,000 salary considered rich?

Many people may think a $100,000 salary is rich. However, “rich” is a relative concept with a vague definition, meaning rich in wealth and assets. A lot depends on where you live and how you use your income (spending, saving or investing).

Also, consider how individual circumstances may vary. If you make $100,000 a year, your spouse doesn’t work, and you’re raising three kids and a relative with medical needs, the high pay probably won’t last that long.

Add in some student loans, a huge mortgage, and a car payment, and you realize that someone making $100,000 a year probably isn’t rich by most estimates. They may be barely making ends meet.

Tips for Living on a $100,000 Budget

How to get the most out of a $100,000 salary? Here are some tips for living on a $100,000 budget:


Regardless of your salary, it’s a good idea to design a monthly budget. At the very least, track your monthly expenses versus your monthly income. After you’ve figured out all of your mandatory expenses (like your mortgage and groceries), you can figure out your remaining discretionary spending (life “wants”), savings, debt repayment, and investments.

Save money

It’s a good idea to have at least emergency savings; being able to cover expenses for three to six months without any inflow of income is ideal.

In addition to emergency savings, you may want to allocate money in your budget each month for other savings goals, including a down payment on a house or car, weddings, vacations, or home improvements. Having a high-interest savings account with automatic savings can help you reach your goals faster.

Get out of debt

When you have room in your budget, paying off debt can be a good use of money, especially if your credit card debt is particularly high in interest. When you have multiple sources of debt or even considering a credit card debt consolidation loan, you can weigh options like the debt avalanche method versus the debt snowball method.

Make a retirement plan

If you’re wondering, “When should I start saving for retirement?” many financial experts would probably say the answer is “yesterday.” The sooner you start saving, the sooner your money can grow through compound interest.

If your employer offers a 401(k) match and you have the ability to put a percentage of your paycheck into a retirement account, opting in is usually a smart idea. But an employer-sponsored 401(k) isn’t your only retirement option. Depending on your situation, it might be a good idea to take advantage of a rolling or traditional IRA and other retirement strategies.

Invest your money

Investing isn’t just for retirement. If you’re making $100,000 a year and have extra money after you’ve built up your emergency savings and paid off your debt, you might benefit from investing in the stock market or even real estate.

Learning how to invest can be intimidating; if you’re not sure where to start, it might be a good idea to work with a trusted investment broker.


For most individuals and small families, the answer to “Is a $100,000 salary good?” is a resounding “yes.” Cost of living and family size can affect what the $100,000 is for, but generally speaking, you can live comfortably on $100,000 a year.

Leave a Reply

Your email address will not be published. Required fields are marked *