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Maximizing Your Salary: Best Cities for $100k Income

a person holding a bunch of money in their hands
Source: Lala Azizli / Unsplash

Living on a $100,000 salary can offer a comfortable lifestyle in some cities and a more modest one in others. The significant variance in purchasing power is primarily due to variations in taxes and the cost of living. A study conducted across 72 of the largest U.S. cities adjusted the $100,000 income for federal, state, and local taxes, as well as local cost of living premiums to find the purchasing power in each location.

Disparities Across U.S. Cities

The study revealed that the purchasing power of a $100,000 salary varies drastically depending on the city you live in. For instance, in El Paso, TX, this income offers the highest purchasing power at $88,840 after adjusting for taxes and cost of living. This is attributed to the absence of state or local income taxes and a lower cost of living compared to other cities.

On the other end of the spectrum is Manhattan, NY, where a $100k salary only translates to $30,914 in purchasing power due to the high cost of living and income taxes. This stark difference highlights how geographical location significantly impacts an individual’s financial standing.

Moreover, states like Texas and Oklahoma are among the places where $100k goes the farthest due to lower living expenses and tax rates. In contrast, cities in New York and California are among the least advantageous places for the same salary due to high costs of living and substantial tax burdens.

Impact of Taxes and Cost of Living

The study also emphasized how local taxes and cost of living affect the value of a $100k salary. Residents in states that forgo income tax collection face a standard 22% federal rate, which can significantly impact their overall purchasing power. For example, residents in Baltimore face potential losses of up to 32.7% of their income at the $100k level due to high income taxes.

Furthermore, rental costs play a crucial role in determining the overall purchasing power of a $100k salary in different cities. For instance, cities like San Francisco, Los Angeles, San Diego, and Oakland experience a drastic reduction in purchasing power due to high housing costs.

In addition to taxes and housing expenses, other factors such as healthcare costs, transportation expenses, and general affordability contribute to the overall cost of living index data that was averaged across 2023 for the 72 largest U.S. cities examined in the study.

Top Cities for High Income Earners

For individuals earning a substantial income, it’s essential to consider where their money will go furthest. The study identified several cities where a $100k income has considerable value due to lower taxes and living expenses. Aside from El Paso, TX, other top cities offering high purchasing power for a $100k salary include Oklahoma City, OK; Memphis, TN; Corpus Christi, TX; San Antonio, TX; Lubbock, TX; Tulsa, OK; Jacksonville, FL; Houston, TX; and St. Louis, MO.

Conversely, residents in Manhattan, NY; Honolulu, HI; San Francisco, CA; Brooklyn, NY; Los Angeles, CA; Washington DC; Queens, NY; San Diego CA; Boston MA; and Oakland CA experience significantly reduced purchasing power for a $100k salary after adjusting for taxes and cost of living premiums.

In conclusion, understanding the impact of local taxes and cost of living is crucial for individuals aiming to make informed decisions about their financial well-being when considering relocation or job opportunities across different U.S. cities.

The information provided is for general informational purposes only and should not be considered as financial advice.

Purchasing Power
Location Impact
Cost of Living
High Income
Geographic Advantage
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