Deciding on what is a good salary is relative to where you live, your age, and the size of your family, among other factors. For example, people living in expensive cities like San Francisco or New York might consider a good salary in the rural parts too small to cater to their needs in the city.
In addition, a person with a small family and one with a larger family may have different views of a reasonable annual salary.
Annual earnings of $50,000 is suitable for most parts of the country except in the most significant urban areas such as San Diego, New York, and Los Angeles, where you need an annual income range of about $100,000 or over to live comfortably, own a house, a car, and also support your family.
There are so many factors that determine what a good American income level is. This is because what is good for me is not what is good for you. The size of your family, age, professional experience, and location are just a few things that determine a good average wage.
In this article, I will discuss everything you need to know about what a reasonable salary looks like for income earners in different sects, including for single people and different families, among other things.
Factors That Can Determine A Good Salary
As I mentioned, determining a good median wage depends on many factors. For example, people with different skills, qualifications, college majors, experience levels, lifestyles, and family sizes consider a different view of a good salary.
For instance, if you have worked as an auditor for more than ten years and have furthered your studies within that period, you may view a good salary differently from an auditor in an entry-level position. Therefore, some of the factors that determine an excellent wage include the following:
There is a reason why salaries vary by geographical location. Depending on their location, people in the same profession, career, and experience level may get different salaries. But, of course, no one fixed salary cuts across the other locations since the cost of living varies from one place or city to another.
For instance, the average annual income of an accountant in the United States is $58,768, according to salary statistics. That means some states or cities pay more than others. For example, the average income in New York is $63,058 per year, while in North Carolina, the average income is $54,298, according to the same statistics.
It is also important to note; that the cost of living in different states varies. Some states have the cheapest foods, housing, and Health care costs, while others are expensive.
For instance, New Hampshire is a state with some of the lowest food costs, while Hawaii is a state with some of the highest food costs. As a result, the people in these two states have different views of a reasonable salary. Also, employers pay their employees differently based on the cost of living.
Salary calculators such as the PayScale Cost of Living tool allow you to determine how location can influence hourly wages and salary for full-time workers.
Education is another factor that determines what a good salary looks like. If you have a high school diploma, you cannot compare yourself with someone with an associate degree, bachelor’s, or advanced degree, such as a master’s degree. Therefore, your good salary differs from someone with professional degrees or the highest level of education.
According to the Bureau of Labor Statistics, Individual incomes or salaries vary based on the level of education. Therefore, those with minor educational qualifications earn less than those with higher levels. For instance, those with less than a high school diploma earn less than those with a high school diploma.
In addition, those with a high school diploma earn less than college graduates with associate degrees, bachelor’s degrees, master’s degrees, and doctoral degrees, respectively. That means the higher you climb up the educational ladder, the more you are likely to earn, and the less you will be unemployed.
With more experience, you can earn more. But, of course, you cannot compare someone with an experience of 10 years and an experience of 2 years in terms of their income brackets if they are in the same industry and occupation.
It is also important to note that people in different fields but with the same experience may earn differently. In addition, people working for other employers may earn different median salaries yet have the same years of experience. Therefore, if you work for the same employer and in the same occupation as someone else, your median income may be different if you have different experience levels.
For instance, you cannot compare someone who has worked for over ten years in chemical engineering and a junior chemical engineer with less than five years of experience working for the same employer in terms of their monthly or weekly earnings.
Different industries have salary differences or median earnings. For example, some jobs with rare skillful persons may pay higher than those in flooded areas where the skills are readily available. In addition, the employer is also the determiner of the salaries and hence can vary from employer to employer.
When you compare well-established companies to startups, you will find a tremendous difference in wages and salaries for the employees. Startups usually pay less compared to well-established firms. In addition, non-profit organizations generally pay less than for-profit companies or organizations.
As I have mentioned, industries with less labor supply often pay higher than jobs with more labor supply. That is why you will find a significant variation from one sector to another.
For instance, in the United States, the Bureau of Labor Statistics shows the most well-paying industries are legal, real estate, information technology, health care and medical preparatory programs, engineering occupations, electrical engineering and architecture, and business and financial operations. These industries usually pay a yearly salary of up to $100,000 or even more.
On the other hand, some of the least paying industries include cleaning and maintenance operations, personal care, healthcare support, and food and preparations. These industries usually pay less than an average base salary of $50,000 annually.
Success And Performance
This is one of the factors that I cannot underestimate since most companies reward those who perform extra-ordinarily or achieve the company’s targets. Therefore, if you have always registered great successes and exemplary performance in your field, you can negotiate a better salary and stand a chance for a promotion.
Another thing when it comes to success and performance is that most companies are always headhunting for the best employees, and they do that based on the performance and successes of the employees. That means if you have constantly and consistently posted an excellent performance in your role, you stand a chance to work for blue chip companies that pay a good monthly wage and other rewards.
As I mentioned, success and performance can also give you a promotion; therefore, your annual income improves when you are in the hierarchy.
What’s The Average Salary For A Single Person?
The average earnings for a single person is $35,000 per year. This salary is enough to cover basic needs, including food and housing and other expenses such as healthcare and personal expenses. However, as I mentioned earlier, a good salary for a single person differs from a good salary for a married individual. This is because a married person has many more needs to cater to than a single person.
Of course, it would be essential to note that the average salaries that suit a single person can vary from state to state. This is because not all states or cities have the exact cost of living. For instance, you may need to make more money in California, Colorado, New York, Delaware, and Connecticut than in other cities or states with cheap services or food.
In Hawaii, for instance, a single person would need a total income of $40,412 per year after tax due to the high cost of food per month and housing. In this case, the estimated prices for accommodation and food are $16,337 per year, respectively.
What Is A Good Salary For A Single Person?
An average annual wage of $51,480 is a comfortable wage for a single person. This, however, depends on location since some locations have a high cost of living, and you may need more than the mentioned income to live comfortably.
As a single person, your salary should be enough to cater to all your needs and wants. Also, with some left for your savings. A 2022 study by Smart Asset reveals that some locations may need more earnings than others for you to cover all your needs and wants and to have something left to save.
For instance, in San Francisco – Oakland, you will need an income of about $74,282 annually salary after tax to cater to all your needs. In contrast, in St. Louis, MO-IL, you will need an income range of about $46,864 annually to cater to all your needs, with something left for you to put into your savings. The difference is due to the difference in the cost of living.
What Is A Good Salary To Live On?
Across the United States, you will need a median household income of about $57,013 per year to live comfortably in most metropolitan cities, according to Smart Asset and other statistics. This is a good salary that will help you live comfortably.
According to Business Insider, some outlier cities and states require more yearly income to make a good living. This includes states like New York, where you need a comfortable wage of about $95,724 per year to live comfortably. However, the same article shows that you need an average salary of $67,690 per year to live comfortably across all the states.
Therefore, a good salary to live on depends on the location. This is because different states and cities in the United States have different living costs. This includes the cost of food and housing. A good salary should, therefore, be enough to cater to the cost of food and housing and be left with something left over for emergency funds and your savings.
What Is Middle-Class Income In The US?
Middle-class income in the US is well-stated by Pew Research, and it indicates that “middle-class income refers to those whose household income per year is 2/3rd – double the national median.” Therefore, if you are figuring out the income class you belong to, then Pew Research findings can shed some light.
To be more specific on the numbers, Pew Research further classified people in the middle class as those that earn between $43,350 and $130,000 annually. The same study reveals the middle-class average family income for a family of three to be between $52,200 and $156,600 per year, and those earning above that were categorized in the upper-income category.
What Is Considered Middle-Class In The US?
Cambridge dictionary defines the middle class as people who are neither very rich nor poor. As the name suggests, they are in the middle class and include lawyers, doctors, and teachers, among other professionals.
As I have indicated above, middle-class people earn a median household income between $43,350 and $130,000 per year. Of course, it is not easy for anyone to place themselves in the class income stratification. Most of the working class in the United States will think they are in the middle class while they could be in the low-income category.
Research shows that about 72% of the Americans among those sampled and interviewed revealed that they were in the middle-class income category. However, the same research shows that people don’t merely use their income to classify themselves. Still, they also rely on other factors such as their education level, family history, and location.
What Is A Good Salary Increase Per Year?
A good earnings increase is between 4% and 7% per year. Anything above an 8% increase in salary per year is a big raise. However, most companies offer increases in earnings to their employees annually at a rate of 3 % – 5%. With that average salary increase, you may not feel the impact of the increases in earnings due to inflation.
It is also important to note that about 92% of the employees would expect a salary raise of more than 6% per year, as the study reveals. Other studies show that 40% of the employees expect a 6% or more increase in salary, 31% expect an increase of 8%, and 21% of the employees expect an increase of over 10% per year.
This shows that the employees’ expectations are different, which are dictated by factors such as the cost of living and the consumer price index, among other factors. It is also important to note that employers base the annual salary increase on factors like:
- Cost of living – to meet the cost of living adjustment, employers usually consider the trends in the economy and how to adjust to help employees keep up with the rising cost of living.
- Retention – a company that does not give a raise to their employees, may not retain them since employees are usually looking for greener pastures. According to some studies, about 40% of the employees who left their previous employers for another job did so because of a raise of 10% and above. Therefore, since most employers know this fact, they thus offer annual salary increases of a specific rate to retain their employees.
- Length of the service – some employees also consider the employees who have stayed for long in the company. For instance, a company may base salary increases on the years you have worked, and those that have stayed longer, for example, over five years, may get a good raise compared to the other employees.
- Merit or performance – of course, every employer would want to retain their employees, mostly the best. Therefore, the only way to motivate those that are posting good performance is to give them a raise.
Frequently Asked Questions:
There are many questions surrounding what makes a good salary in the United States. Here it is important to note that what was a good salary in 2020 does not necessarily mean it is a good salary in 2022 in the years to come.
A good salary depends on many factors that I have discussed above. Also, a good wage for a single or less experienced person may not be suitable for a person with a family and a more experienced person. Some of the other frequently asked questions, therefore, include the following:
What Is Considered A High Salary?
The American economic class is divided into three: the low income, the middle income, and the upper income. A high salary is above the average of the national income. According to our research, a high salary is above $80,000 per year but can differ with various high-paying careers and locations.
According to Money News of the United States, the upper-middle-class United States median earnings are between $106,827 and $373,894 annually. This is a high salary since it is way above the national income thresholds average.
A high salary is, however, relative to many factors, including family size, geographical location, and experience level.
Is $70,000 A Good Salary For A Single Person?
A salary of $70,000 is a comfortable salary for a single person and an individual with a family. It is way more than the national household income average. As I noted before, according to Pew Research, the national average salary per year is $53,490.
Therefore, earning a salary of $70,000 as a single person is enough to cater to all your needs, including basic needs, wants, and also be left with something reasonable for your savings. On class stratification, a salary of $70,000 puts you in the middle-class income category. In addition to that, $70,000 can give you a decent and comfortable living in any state or city.
Can You Live Comfortably On $60,000 A Year?
A salary of $60,000 per year is good enough to give you a decent and comfortable lifestyle in most parts of the world. In the United States, that is enough to cater to your needs and wants and to give you a comfortable living. However, this depends on the size of your family and the location where you live.
According to CNBC, some cities where you can live comfortably with a salary of $60,000 per year include Atlanta, Columbus, Oklahoma, Houston, Louisville, Buffalo, NY, Kansas, Birmingham, Indianapolis, and Cleveland, among others. That means an income of $60,000 per year is a good one to live in, in most cities of the United States.
For a single person, this salary is more to give you a decent living in any part of the world than for an individual with a large family. For instance, if you live in New York or prime cities with a high cost of living, this salary may not give you a decent and comfortable lifestyle, especially if you have a family to take care of or have long-term financial plans.
What Is A Good Starting Salary For Your First Job?
A good average starting salary for an entry-level position is $40,153 per year. This is according to Indeed job statistics for entry-level positions. However, as I mentioned before, what is a good salary for me may not necessarily be good for you. This is because different people working in various industries may not start with the same pay.
In addition, a good salary depends on many factors, such as your job title and your level of education, among others. For example, you may not start on the same bar as a degree holder if you have a high school diploma. Also, the entry-level salary depends on the location since not all states, even for the same occupation, have the same or fixed salary for entry-level employees.
What Is A Good Income For A Family Of 4?
If you are a family of 4, you definitely need a good income to live comfortably in any state or city in the United States. However, it is important to note that some cities or states are more expensive than others.
For instance, a good salary for a family of 4 living in Texas should be $61,501 annually before taxes. This may be a bit higher in California, where you need an income of about $81,056 annually to cover the high cost of housing and food. This is according to CNBC statistics for different states.
The cheapest states to live in are Mississippi, Tennessee, and South Carolina, where you will need about $54,933, $58,199, and $59,902 per year, respectively. These cities, among a few others that I have not mentioned, have slightly lower food and housing costs, making living comfortably as a large family on the wages that I have mentioned.
Therefore, a good salary for a family of 4 can range from over $55,000 to over $80,000 annually, depending on your location.
As I wrap up, you must understand that no fixed salary is universally good. This is because what is good for you may not be suitable for me due to several factors. As I mentioned, a good salary depends on many factors, such as years of experience, career path, education level, location, and family size.
Therefore, a good salary depends on my mentioned factors, and most importantly, your location. This is because different areas come with different costs of food and housing. Therefore, if your location has cheap housing and food, you need a lower income to make a comfortable living than someone living in a city where food and prices for housing are expensive.