Is $130k a Good Salary (Expert Guide)
Salaries and Incomes are somewhat heightened subjects these days. The ongoing cost of living crisis puts many households on edge and forces decisions on how to manage their income and what to spend their disposable income on.
While incomes have been rising as seen in the Atlanta Fed’s wage tracker by above 6% it is not matching current inflation which is currently trending at just above 8% compared to a year ago.
Whether your salary is good enough really depends on how you want to compare yourself. Do you want to know whether it’s a good salary for the job and role you are being employed for? Or is it to check whether you can support certain living standards in the city or state you are about to move to?
We have gone through the pages and statistics of the BLS (Bureau of Labour Statistics) and the US Census Bureau to analyze the millions of statistics and data in order to answer your question. So stay tuned and let’s dig in!
Is $130k a year rich?
According to the Census of 2021, the median yearly income in the US is $ 70,784 while the average stands at $102,316. Looking purely at those numbers you could consider yourself better off than most of your fellow Americans indeed.
Being rich, of course, is a very subjective definition. Some would consider earning $130k a year being rich, others less so. From my own experience, earning more will usually get you to move to more affluent neighbourhoods, upgrade your overall lifestyle and by definition will move you towards wanting to earn more in order to afford the next higher income and lifestyle bracket. Sound familiar? Yeah, well, I have been there.
Looking purely across the distribution of earnings, being midway in the $100k to $150k category puts you in the top 25-30% of all households in the US.
If you, however, live in a major city on either the East or West coast those comparisons might not put you in a similar bracket. As generally higher living costs are associated with either New York, San Francisco or Miami you might still be above average but not really feel rich with a similar income compared to somewhere more rural.
The following table from the 2021 Census report “Income in the United States 2021” sheds more light in terms of median incomes through the lens of race, school degree but also regional associations. As you can see from the table, there can also be 20-25% income differences based on whether you are located on either coast for example or in the South of the US.
Of course, I can hear you say, that would not tell me whether I could consider myself living in Manhattan or Beverly Hills. That is true and from personal experience, those cities will mean you would have to multiply those numbers by probably 2 to be regarded rich on a comparative basis.
Luckily our friends from Nerdwallet have put together a handy calculator which will help you understand those factors when considering moving to another city or place but wanting to maintain your living standards.
Having a very solid $130,000 income in Atlanta, Georgia will according to their numbers mean a needed income of $319,000 in New York City just to maintain similar standards of living. Rich is indeed a very “it depends” term isn’t it just?
What is considered a good salary in the US?
Again, that really depends on where you live. In general, I think it is safe to say that a salary of more than $100k-$120k a year is generally regarded as a good salary in order to afford a relatively good lifestyle.
As the statistics above and on the BLS’ website demonstrate a salary of this proportion will comfortably put you in the top 25-30% of the income distribution. Sure, you won’t drive expensive cars and go holidaying on luxury yachts, but you will still be able to afford nice things and a lifestyle that many can simply not.
In an article we also recently researched and published, we researched which jobs can indeed pay you half a million dollars a year which would put you in the top 1% of all earners in the country. Have a read here.
What income is considered rich a year?
It should come as no surprise that income inequality is very high and seemingly increasing, not only in the US but also globally.
In order to consider yourself rich, it is advisable to look at the overall income distribution as we have done in the above table. If you want to belong to the top 10% of highest-earning households in the US, for example, you would need to earn $211,956 a year which is more than 13 times the income of the bottom 10% or earners who live off incomes of $15,660 and below according to census statistics of 2021.
It is estimated that the top 1% of earners have annual incomes of more than $500,000 a year.
What income level is wealthy?
Wealth is the accounting measurement of someone’s assets and monetary values accumulated over time. That, at least, is my personal definition of monetary wealth. Of course, that does not mean that people with fewer monetary possessions are not necessarily wealthy. More philosophically speaking I see wealth as a way more encompassing term than merely measured by someone’s bank balance.
I see wealth equally in the ability to spend time with your loved ones and I consider people with vast circles of great relationships as extremely wealthy. Equally, someone’s healthy living can be regarded as wealthier as the pursuit for monetary recognition at the expense of healthy living.
Anyway, let’s not digress. Being monetary wealthy usually means being in the top 1% of earners in your country. For the US, as we have established here, that means an annual income of $500,000.
Conclusion
It really depends on how you want to compare yourself. Do you want to know whether it’s a good salary for the job and role you are being employed for? Or is it to check whether you can support certain living standards in the city or state you are about to move to?
The median yearly income in the US is $ 70,784 while the average stands at $102,316. If you, however, live in a major city on either the East or West coast those comparisons might not put you in a similar bracket. A salary of more than $100k-$120k a year is generally regarded as a good salary in order to afford a relatively good lifestyle.
In order to consider yourself rich, it is advisable to look at the overall income distribution. Wealth is the accounting measurement of someone’s assets and monetary values accumulated over time. Being monetary wealthy usually means being in the top 1% of earners in your country.
