A recent analysis found that living comfortably in any of the country's major cities would cost a lot of money.
A recent analysis found that living comfortably in any of the country's major cities would cost a lot of money. (Photo : by Mario Tama/Getty Images)
Insights from SmartAsset
According to personal finance website SmartAsset, an individual needs to make $96,500 before taxes each year in order to pay for housing, groceries, transportation, and entertainment, as well as to pay off debt and save a portion of their income. A two-parent home with two kids need a total of $235,000 to live comfortably, according to a report published on Thursday by SmartAsset.
According to a survey by SmartAsset, such wage levels only apply to Americans who live in the 99 largest cities in the country. The report also mentioned that living in huge metropolises like Boston and New York requires an even greater salary.
Housing and rising consumer prices have "wreaked havoc on the cost of living in cities," according to Jaclyn DeJohn, managing editor of Economic Analysis for SmartAsset, which is one of the main reasons Americans require such high incomes.
The income statistics provided by SmartAsset are impressive in light of the fact that the great majority of Americans do not make quite that much money. According to the most recent statistics available from the Bureau of Labor Statistics, the average annual salary for an American is between $62,000 and $73,000. The median household income in the United States is estimated to be $77,397.
According to 2023 statistics from employment website Zippia, just 18% of individual Americans earn more than $100,000 annually. According to Zippia, about 34% of American households make more over $100,000 annually.
However, for many Americans with greater incomes, earning six figures hasn't brought about the degree of comfort they had hoped for. According to a 2023 LendingTree survey, over 4 out of 10 Americans who make $100,000 or more are still living paycheck to paycheck.
In order to conduct its analysis, SmartAsset used data on living wages from MIT and the "50-30-20" rule of budgeting, which states that one should set aside 50% of one's income for needs like housing and food, another 30% for wants like trips or spa days, and the remaining 20% for debt and savings.
According to SmartAsset's analysis of individual U.S. cities, the cost of living comfortably is highest in several metropolitan areas. Topping the list is New York City, where it would cost approximately $138,570 for an individual and $318,406 for a family of four to maintain a comfortable lifestyle.
Following closely behind is San Jose, California, with estimated costs of $136,739 for an individual and $334,547 for a family of four. Irvine and Santa Ana, also located in California, rank next, with living expenses amounting to $126,797 for an individual and $291,450 for a family of four. Boston rounds out the list, where living comfortably is estimated to cost around $124,966 for an individual and $319,738 for a family of four.
