Is €100,000 per year salary good? | SoFi (2024)

In most parts of the country, a salary of $100,000 is considered good; maybe even very, very good. It can be more than enough for an individual or even a small family to live comfortably. With $100,000 a year, a person could cover regular expenses, pay off debt, build savings, contribute to retirement, invest, and still have enough money for entertainment, hobbies, and vacations.

But there certainly may be exceptions to whether $100,000 a year is good, as well as ways to grow that salary even more than it otherwise would.

Factors that determine whether a $100,000 salary is right

Is 100,000 euros a good salary? In almost all cases yes. That's well above the poverty line and also above the average American income for both individuals and smaller families. Even in the face of rising inflation, an annual income of $100,000 can typically provide a comfortable lifestyle and financial stability.

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

•Place: While $100,000 can cover expenses in most places in the US, this won't go as far in places with highercost of living. In some of the most expensive cities in the US, a salary of $100,000 can mean spending a significantly higher percentage of your income on housing. For example, in the summer of 2022, the average rent in Manhattan was $5,000 per month.

•Taxes: As an individual, $100,000 per year earns you a 24% federal income taxtax class. That means you'll only take home $76,000 after federal taxes — and even less, depending on state, city and school district taxes. Married individuals with $100,000 in gross earnings are taxed slightly lower (22%), which amounts to $78,000 after Uncle Sam's cut at the federal level.

•Family size: A salary of $100,000 a year can provide a comfortable life for most people, but the larger a family gets, the harder it is to make ends meet. Additional children or other dependents may be the resulthigher grocery bills, utility use, school costs and doctor visits.

How does a $100,000 salary compare to the US median income?

The median household income in the US is about $67,500, according to the latest published US Census results. Recently, the Bureau of Labor Statistics reported that the average weekly income for a full-time employee is $1,037, which equates to an average annual salary of $54,000.

Either way, a $100,000 salary is almost double the American median income. If you live in a so-called DINK household (double income, no children) and your domestic partner also takes home a large salary, you are even higher than the average household income.

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What percentage of Americans earn more than $100,000 annually?

According to the US Census Bureau, only 15.3% of US households earn more than $100,000 annually. However, a "household" can consist of two or more wages totaling $100,000.

Salary distribution of $100,000

Is it good to earn €100,000 a year? It's almost certainly easier thenliving on $20,000 a year. Let's see how it breaks down into monthly, weekly and even daily wages:

•Monthly income: $8.333,33

•Pay a check every week: $3.846,15

•Weekly income: $1.923,08

•Daily income: $384.62 based on 260 working days per year.

Please note that this salary specification uses pre-tax income. The actual salary will probably be lower after deduction of taxes and any health insurance and pension contributions.

Can you live individually with an income of € 100,000?

It is actually possible to live individually with an income of €100,000. With that salary, many people can't provide coverage on their ownbasic cost of livingas well as discretionary expenses, such as eating out and traveling.

People who earn €100,000 annually often have enoughspendable incomepaying off debt, contributing to retirement, working toward multiple savings goals (like homeownership and vacations), and even investing.

How much rent can you afford to get by on an income of €100,000?

The conventional advice abouthow much of your income you should spend on housingdoes not exceed 30%. While economists may need to reassess this figure given current inflation and skyrocketing home prices, it would mean that someone could afford $30,000 in rent each year, or about $2,500 per month, on $100,000 per year.

But for $100,000 a year, someone might consider buying a house instead. A salary of $100,000 can make it easier to save for a down payment and keep up with maintenance costs, property taxes and homeowner's insurance.

The Best Places to Live on a $100,000 Salary

With $100,000 a year, an individual or small family could probably live in most places. In fact, $100,000 is higher than the average annual income ($65,290) in America's most expensive city, Los Angeles.

That said, if you want to make your dollars stretch as far as possible, consider what the US is doing. News has rated the five cheapest cities to live in 2022:

• Hickory, North Carolina

• Green Bay, Wisconsin

• Huntsville, Alabama

• Quad Cities (Davenport-Bettendorf, Iowa en Moline-Rock Island, Illinois)

• Fort Wayne, Indiana

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The Worst Places to Live on a $100,000 Salary

With a salary of $100,000, the cost of living is usually minimal, even in America's most expensive cities. But living in such places can make it harder to build your savings and invest in your future.

If you want to live comfortably on $100,000 a year, it may be wise to avoid what are considered America's most expensive cities in 2022:

• Los Angeles, California

• Miami, Florida

• San Diego, California

• Salinas, California

• Santa Barbara, California

Is a salary of $100,000 considered rich?

Many people might consider a $100,000 salary to be rich. But “rich” is a relative term with a vague definition, meaning an abundance of wealth and possessions. A lot depends on where you live and how you spend your income (spending versus saving versus investing).

Also consider how personal circ*mstances may vary. If you make $100,000 a year, your spouse doesn't work outside the home, and you support three children as well as a dependent with medical needs, the high salary may not go that far. Add some student loans, a large loan, and car payments to the picture, and you realize that someone making $100,000 a year might not qualify as wealthy by most people's standards. They may barely be able to make ends meet.

Tips for Living on a $100,000 Budget

How can you get the most out of a €100,000 salary? Here are a few tips for living on a $100,000 budget:

Get on a budget

Regardless of your salary, it's a good idea to create a monthly budget. In any case, keep track of your monthly expenses and your monthly income. After you have accounted for all your mandatory expenses, such as your mortgage and groceries, you can calculate what you have leftdiscretionary expenses("wishes" in life), saving, paying off debts and investing.

Save your money

It's a good idea to haveemergency savingsat least; it is ideal to be able to cover three to six months of expenses without any income coming in.

In addition to emergency savings, it can be a good idea to set aside money in your budget each month for other savings goals, such as a down payment on a house or car, a wedding, a vacation, or a home renovation. To have onehigh interest savings accountautomatic savings features help you reach your goal faster.

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Getting out of debt

Paying off debt can be a good use of money if you have room in your budget, especially if you have particularly high-interest credit card debt. You can weigh options such as debt versus debt.Debt snowball methodwhen you have multiple sources of debt or even considering a credit card debt consolidation loan.

Setting up a pension scheme

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

If your employer offers a 401(k) match and you can afford to transfer a percentage of your paycheck to a retirement account, it's often a smart idea to sign up. But employer-sponsored 401(k) accounts aren't your only retirement option. Depending on your situation, it may be a good idea to use onerollover or traditional IRAand other retirement strategies.

Investing your money

Investing is not only intended for your pension. If you make $100,000 a year and have extra money after building up emergency savings and paying off your debts, you may want to invest in the stock market or even real estate.

Learning to invest can be scary; If you're not sure where to start, it can be a good idea to work with someone you trustinvestment broker.

Take off

For most individuals and small families, the answer to the question "Is $100,000 a good salary?" is a resounding 'yes'. Cost of living and family size can affect how far $100,000 goes, but generally speaking, you can live comfortably on $100,000 a year.

Do you want to get the most out of your salary? Think of a bank accountSoFi banking. When you open with direct deposit, you'll earn a competitive APY and pay no monthly account fees, allowing your money to grow faster. Additionally, qualified SoFi accounts offer access to pay stubs up to two days in advance. You benefit from other rewards, such as money back on local purchases and free overdrafts.

FAQ

What jobs pay more than $100,000?

Many jobs pay more than $100,000 per year in various fields. These jobs include doctors, lawyers, software engineers, business managers, pharmacists, psychologists, IT managers, financial managers and many others. People from the creative sector, from writers to hairstylists, can also earn that salary.

Is it common to earn $100,000 a year?

Earning $100,000 a year is not common in the United States. According to the US Census Bureau, only 15.3% of US households earn more than $100,000.

Can you live comfortably on $100,000 a year?

Most people can live comfortably on $100,000 a year. If you live in an area with a high cost of living and/or have a large family or very high expenses and/or debt, it may be more difficult to live comfortably on $100,000 a year. In either case, it is usually not difficult to pay basic living expenses.

What is considered rich in the US?

Americans said in a survey that they believe it takes a net worth of $2.2 million to be considered “rich.” When calculating net worth, you want to consider more than just income; it also includes assets (such as a house and a retirement account), minus any debts and obligations.

Fotokredit: iStock/Inside Creative House