New York City has always come with a brutal cost of living — but many may not know that the Pacific paradise of Honolulu is just as bank-busting.
And to even consider living in either city, it now comes at a higher price.
According to a new 2023 study by Smart Asset, an investment adviser company, the average American would need to earn at least $300,000 per year to meet the demands and cost of living.
This is a huge leap from just five years ago, when a six-figure salary was considered an important milestone for workers.
As rampant inflation continues to erode the purchasing power of money, 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 Lending Club survey.
Specifically, the findings show that people earning $100,000 in New York City amounts to just $35,791 when you consider taxes and the cost of living. And in Honolulu, $100,000 gets you $36,025 take-home pay.
Meanwhile, to have a $100,000 purchasing power in Honolulu, an individual would need to make $312,000 per year — and about $300,000 for the same in New York City.
San Francisco takes third place as the priciest city.
|1||New York, NY||$35,791|
|3||San Francisco, CA||$36,445|
|5||Long Beach, CA (Tie), Los Angeles, CA (Tie)||$44,623|
|6||San Diego, CA||$46,167|
What $100,000 gets you in the priciest cities in America after federal, state and local taxes.
To get out of the paycheck-to-paycheck lifestyle, you would need to earn a salary of about $310,000 per per year in Honolulu, New York and San Francisco — which would equate to $100,000 once taxes and the increased costs of living are considered.
That ranking is heavily influenced by local taxes. The most expensive states, California, Hawaii and New York, all have high income tax.
By contrast, the cities that go farthest on a $100,000 salary include Memphis, Tenn. — with seven of the top being cities in Texas.
|2||El Paso, TX||$84,966|
|3||Oklahoma City, OK||$84,498|
|4||Corpus Christi, TX||$83,443|
|7||San Antonio, TX (Tie), Fort Worth, TX (Tie), Arlington, TX (Tie)||$80,124|
|8||St. Louis, MO||$79,921|
Cities where $100,000 goes the furthest
The states with the cheapest cities, Tennessee and Texas, have no income tax. Meanwhile, Oklahoma’s income tax is relatively low — with about 4% on a $120,000-a-year income.
In Memphis, El Paso and Oklahoma City, a comparatively low salary of around $120,000 will offer the same sense of financial freedom, or the “new” $100,000.
SmartAsset reviewed 76 American cities in total to determine which were the cheapest and most expensive to live in.
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The study follows a recent Douglas Elliman report which showed the median rental price in Manhattan has topped $4,150 for the first time in Big Apple history.
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