Securing each monetary success and profession alternatives comes at a price — one that’s rising annually. Overall, Americans need a mean post-tax earnings of $68,499 to live comfortably in the U.S., in accordance to latest knowledge from SmartAsset.
SmartAsset’s study analyzed the after-tax earnings wanted to live in the nation’s 25 largest metro areas comfortably. To decide the required salary for a single particular person with no children in every metropolis, SmartAsset employed the 50/30/20 rule, which defines a cushty way of life as one in which 50% of after-tax earnings is utilized to primary residing bills (wants), 30% to discretionary earnings (needs) and 20% to financial savings and debt.
The MIT Living Wage Calculator was used to calculate primary residing bills for every metropolis.
The post-tax salary wanted in these 25 areas elevated by round 20% all through 2022, whereas inflation grew about 8%.
Persistent inflation has led Americans to suppose extra consciously about the price of residing all through the nation, Susannah Snider, an authorized monetary planner and managing editor at SmartAsset, tells CNBC Make It.
“Inflation is taking a bigger bite out of their paychecks and the cost of living is rising. What does it take in these cities to really feel not just like you’re surviving financially, but like you’re comfortable? Like you’re thriving?” Snider says.
How a lot Americans need to live comfortably
For the second yr in a row, St. Louis is probably the most reasonably priced metropolis on the checklist, with a required after-tax salary of $57,446. In distinction, San Francisco requires the best take-home pay to preserve a cushty way of life at an after-tax salary of over $84,000.
Income calls for in Southern California rose practically 30% this yr; the Riverside metro space, for instance, had probably the most acute one-year improve in required earnings, up 27.28% from 2022.
Here are the salaries wanted to live comfortably in 15 major U.S. cities:
- San Francisco metro space: $84,026
- San Diego metro space: $79,324
- Boston metro space: $78,752
- New York metro space: $78,524
- Seattle metro space: $77,634
- Los Angeles metro space: $76,710
- Washington, D.C. metro space: $76,194
- Miami metro space: $67,056
- Atlanta metro space: $66,580
- Phoenix metro space: $65,670
- Chicago metro space: $65,500
- Dallas metro space: $64,742
- Houston metro space: $62,260
- Philadelphia metro space: $61,678
- St. Louis metro space: $57,446
Why does San Francisco high the checklist?
In cities like San Francisco, the price of residing comfortably exponentially elevated over the previous yr, from roughly $74,000 in 2022 to about $84,000 in 2023, Snider says.
California cities’ elevated price of residing could be defined, in half, by the state’s excessive earnings, fuel and gross sales taxes. In San Francisco, for instance, residents face a statewide gas tax rate of $0.539 per gallon and a sales tax of 8.625%.
San Francisco’s $10,000 improve “really highlights just how much the rising cost of living might be making [residents] feel like maybe that salary last year, that allowed them to feel like they were living comfortably, isn’t really going as far this year,” Snider says.
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