In New York City, a $100,000 Salary Feels Like $36,000
After taxes and adjusting for the sky-high cost of living, a six-figure paycheck doesn’t take you as far you might expect.
Jo ConstantzMarch 15, 2023 at 10:58 AM EDT
The Manhattan skyline from Gantry Plaza State Park in the Long Island City neighborhood in the Queens borough of New York.
Photographer: Ismail Ferdous/Bloomberg
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For many, earning a salary topping $100,000 feels like a mark of success — but how far it goes depends on where you live. In New York City, that annual paycheck is worth just $36,000, after taxes and accounting for the steep cost of living.
That’s according to an analysis of 76 of the largest US cities to see where $100,000 goes furthest by SmartAsset, a consumer-focused financial information provider. New York ranked last, with take-home pay of $35,791. It was joined in the bottom 10 by other notoriously expensive cities like San Francisco, Washington, DC, Los Angeles, Boston and Seattle. Memphis, Tennessee, took the No. 1 spot on SmartAsset’s list, with $86,444 in take-home pay after taxes and adjusting for cost of living.
Cities Where $100,000 Doesn't Go Far
Where take-home pay is worth least after taxes and adjusting for cost of livingSource: SmartAsset
Note: SmartAsset used its paycheck calculator to apply federal, state and local taxes to an annual salary of $100,000. It then adjusted the remaining amount for the local cost of living using data from the Council for Community and Economic Research for the third quarter of 2022. Cost of living data includes the price of housing, groceries, utilities, transportation and other goods and services.
SmartAsset used its paycheck calculator to apply federal, state and local taxes to an annual salary of $100,000. Then, it adjusted the remaining amount for the local cost of living, which includes the price of housing, groceries, utilities, transportation and other goods and services, using data from the Council for Community and Economic Research for the third quarter of 2022.
“I think it’s intuitive: $100,000, a six-figure income — it feels like this big milestone, but it also feels very different depending on where you live,” said Susannah Snider, a financial planner and the managing editor of financial education at SmartAsset. “But to really break it down city-by-city reveals some of the quirks in what a difference where you live makes — and how the tax landscape of where you live really impacts what a six-figure salary feels like.”
Read more: The 10 Top US Cities Where a $100,000 Salary Goes the Furthest
Of course, high salaries are more common in New York City than in Memphis. The median household income in New York was a little over $70,000 in 2021, according to the US Census Bureau. In Memphis, the median household income was about $44,000.
But high prices, high taxes and astronomical rent, coupled with slowing wage gains and nearly two years of persistent inflation, have prompted many big city residents to reevaluate. New York City alone lost over 300,000 residents from July 2020 to July 2021, according to the US Census Bureau, and rents are now rising faster than in any other US city.
Taxes are a particular point of concern: state comptroller Thomas DiNapoli has cautioned against raising taxesfurther as New York’s may already be pushing out wealthy residents, who make up an important revenue base.
Many New Yorkers have migrated to low-tax areas, like Texas and Florida, especially as remote work allows for greater freedom to move. It might not be a bad financial decision: Texas claimed seven of SmartAsset’s 10 highest-ranked cities.
Source:https://www.bloomberg.com/news/arti...ial&utm_source=instagram&utm_content=business
