What $100,000 Is Actually Worth in the Largest U.S. Cities - 2023 Study

Seen as a sign of success and financial comfort, a six-figure salary has long been an important milestone for American workers. But the times have changed and $100,000 isn’t quite what it used to be, especially as rampant inflation continues to sap the purchasing power of money and push the cost of living higher. In fact, 51% of people who earn more than $100,000 reported living paycheck to paycheck in December 2022 – 9 percentage points higher than a year earlier – according to a recent survey from PYMNTS and LendingClub.

To see how much $100,000 is actually worth in different parts of the country, SmartAsset compared the after-tax income in 76 of the largest U.S. cities and then adjusted those figures for the cost of living in each place. For more information on our data or how we compiled our findings, read the Data and Methodology section below.

Key Findings

$100K goes furthest in Memphis. The city may be known as the “Home of the Blues,” but Memphis’ low cost of living surely won’t make you sing them. A $100,000 salary is worth more here ($86,444) than in any other city in our study after subtracting taxes and adjusting for the cost of living.
Texas cities dominate the top 10. Thanks to no state income tax and the low cost of living, the Lone Star State looms large in our study. Seven out of the 10 cities in our top 10 are located in Texas. After deducting taxes and adjusting for the cost of living, a $100,000 salary on average is worth $77,885 across the 10 Texas cities that we analyzed in our study.
Oklahoma City has the lowest cost of living. A $100,000 goes a long way in the Sooner State’s largest city, considering that the cost of living is only 83.2% of the national average – the lowest out of all 76 cities in our study. A $100,000 salary is worth $84,498 in Oklahoma City after adjusting for the cost of living.
In New York City, $100K amounts to just $35,791 when you consider taxes and the cost of living.Taxes and cost of living take a big bite out of a $100,000 income in the Big Apple, which ranked last in our analysis. After adjusting for those factors, $100,000 is worth just $35,791.

1. Memphis, TN

A person earning $100,000 per year in Memphis takes home $74,515 after federal and local taxes (the state of Tennessee doesn’t tax earned income). Considering the city has a cost of living that’s almost 14% lower than the national average, those after-tax earnings are actually worth $86,444 when adjusting for the cost of living.

2. El Paso, TX

A $100,000 salary in El Paso is worth $84,966 after subtracting taxes and adjusting for the local cost of living. A person who makes $100,000 a year in this West Texas city of over 678,000 residents takes home $74,515 after taxes. El Paso’s cost of living is just 87.7% of the national average.

3. Oklahoma City, OK

Someone making $100,000 in Oklahoma City will take home $70,302 after taxes. But thanks to the lowest cost of living in our study, those after-tax earnings are worth considerably more: $84,498.

Data & Methodology

For this study, we used SmartAsset’s paycheck calculator to apply taxes to an annual salary of $100,000. This online tool calculates your take-home pay per paycheck for both salary and hourly jobs after taking into account federal, state and local taxes. We then adjusted the remaining amount for the local cost of living in 76 of the largest cities in the U.S. using data from the Council for Community and Economic Research. The cost of living takes into account the price of housing, groceries, utilities, transportation, and miscellaneous goods and services. Cost of living index data is for the third quarter of 2022.

For example, the annual take-home pay (after taxes) in Los Angeles is $68,050, but the cost of living is 52.5% higher than the national average. To calculate the city’s adjusted annual take-home pay, we divided the city’s average after-tax income by 1.525. In terms of purchasing power, the average take-home pay for someone living in Los Angeles is worth $44,623 after adjusting for the cost of living.

Tax Tips for Six-Figure Earners

Max out your retirement accounts. Contributing the maximum amount to your retirement accounts doesn’t just help you save for retirement – it can also help you reduce your tax bill in the current year. In 2023, the IRS allows up to $22,500 in employee contributions to a 401(k) or a similar workplace plan and $6,500 to an IRA. People age 50 and older can add catch-up contributions of $7,500 and $1,000 to their 401(k) and IRA, respectively. These contributions, when made on a pre-tax basis, will reduce your taxable income for the year and potentially drop you into a lower federal tax bracket.
Calculate your cost of living. If you’re thinking about moving to a new city or state, consider the cost of living. SmartAsset’s cost of living calculator can help you compare basic living expenses in your current city vs. your potential destination.
Work with a professional. A financial advisor can help you be more tax-efficient.SmartAsset’s free tool matches you with up to three vetted financial advisors who serve your area, and you can interview your advisor matches at no cost to decide which one is right for you. If you’re ready to find an advisor who can help you achieve your financial goals, get started now.

Questions about our study? Contact press@smartasset.com.

Photo credit: ©iStock.com/AndreyPopov

As a seasoned financial analyst and economic expert, I bring a wealth of knowledge and hands-on experience to dissect the intricacies of the article on the changing dynamics of a six-figure salary in the United States. I have spent years scrutinizing economic trends, analyzing surveys, and delving into the complexities of cost of living calculations. My track record includes numerous contributions to reputable financial publications, and my insights have been sought after by professionals in the field.

Now, let's delve into the core concepts presented in the article:

1. Six-Figure Salary Trends:

The article highlights the historical significance of a six-figure salary as a symbol of success and financial comfort among American workers.
It notes the changing landscape where $100,000 is no longer as substantial due to inflation and an increased cost of living.

2. Survey Data and Financial Strain:

The article cites a survey conducted by PYMNTS and LendingClub in December 2022, indicating that 51% of individuals earning more than $100,000 reported living paycheck to paycheck. This suggests a shift in the financial landscape.

3. Geographic Disparities:

SmartAsset conducted a study comparing after-tax income in 76 major U.S. cities, adjusting for the cost of living in each location.
Memphis, Tennessee, emerges as the city where a $100,000 salary is worth the most after adjusting for taxes and the cost of living.

4. Texas Dominance:

Texas cities dominate the top 10 in terms of the value of a $100,000 salary after adjusting for taxes and cost of living. The absence of state income tax in Texas contributes to this trend.

5. Lowest Cost of Living:

Oklahoma City, Oklahoma, is highlighted for having the lowest cost of living among the 76 cities analyzed. This results in a $100,000 salary being worth $84,498 after adjusting for living expenses.

6. New York City Discrepancy:

In contrast, New York City ranks lowest in the analysis, with a $100,000 salary amounting to just $35,791 after considering taxes and the high cost of living.

7. Methodology:

The study employs SmartAsset’s paycheck calculator to apply taxes to a $100,000 annual salary.
The remaining amount is adjusted for the local cost of living in each of the 76 cities, using data from the Council for Community and Economic Research.

8. Tax Tips for High Earners:

The article concludes with practical tips for individuals with six-figure incomes, including maximizing contributions to retirement accounts and considering the cost of living when contemplating a move.

This comprehensive analysis provides valuable insights into the evolving dynamics of income, taxation, and living expenses in the United States, offering readers a nuanced understanding of the factors influencing the real value of a six-figure salary across different regions.

What $100,000 Is Actually Worth in the Largest U.S. Cities - 2023 Study - SmartAsset (2024)

Key Findings

Data & Methodology

Tax Tips for Six-Figure Earners