When someone asks, “What is a good salary?” they often get vague responses and arbitrary numbers that don’t tell the full story. While many factors influence what makes a salary “good,” you need concrete figures and benchmarks to evaluate your compensation properly.
In this post, we’ll examine exact salary numbers across different scenarios and provide actionable frameworks for assessing whether your compensation truly meets your needs.
What a Good Salary Looks Like
When discussing what constitutes a “good” salary, it’s most helpful to break it down by different living situations and locations. Rather than providing vague ranges, let’s look at specific scenarios and exact numbers that can serve as practical benchmarks.
Single person in a low-cost-of-living area
In urban areas, a salary between $45,000 and $65,000 provides enough for a comfortable lifestyle while maintaining financial responsibility. This range allows for a basic apartment, car payment, student loan payments, groceries, and utilities while still putting money into savings. For example, in cities like Pittsburgh, Indianapolis, or Kansas City, this salary range typically allows for a one-bedroom apartment in a decent neighborhood while maintaining a balanced budget.
Moving to suburban areas, the required salary drops to $35,000-$50,000 for a similar lifestyle, primarily due to lower housing costs. This reduction reflects the significant savings on rent or mortgage payments, though transportation costs might increase slightly due to longer commutes.
Rural areas present the most affordable option, with $30,000-$45,000 providing a comfortable lifestyle while maintaining the ability to save. The dramatically lower housing costs and generally reduced living expenses make this possible, though residents might face higher transportation costs and fewer amenities.
An increasingly popular option is remote work from low-cost areas while earning a high-cost area salary. This arrangement can create significant financial advantages, allowing professionals to maximize their earning potential while minimizing living expenses.
Families of four in a high-cost-of-living city
The salary requirements for a family of four in an urban environment increase substantially. $85,000-$120,000 is typically necessary to maintain a middle-class lifestyle, covering expenses like a three-bedroom home, two cars, childcare, and various insurance needs. This range accounts for the higher costs of urban family living, including increased grocery bills, higher property taxes, and more expensive childcare options.
Suburban families can maintain a similar lifestyle on $70,000-$90,000, benefiting from lower housing costs while accessing quality schools and amenities. This range assumes similar family needs but factors in the reduced costs of suburban living.
Rural families can achieve a middle-class lifestyle on $55,000-$75,000, though this varies significantly by region. This lower range reflects dramatically reduced housing costs and generally lower expenses across most categories, from groceries to activities.
It’s worth noting that dual-income households have become increasingly necessary in high-cost areas. Many families find that having both parents work provides the financial cushion needed for long-term stability and savings.
Freelancers and entrepreneurs with variable income
Self-employed individuals face unique salary considerations. As a general rule, freelancers and entrepreneurs need to earn 25-35% more than their salaried counterparts to maintain an equivalent lifestyle. This increased requirement covers several factors:
- Healthcare costs are significant, typically requiring an additional $5,000-$12,000 annually, depending on coverage levels and family size. Without employer-sponsored health insurance, this becomes a crucial budget consideration.
- Business expenses and equipment need separate budget allocations beyond personal salary considerations. This might include office space, software subscriptions, professional equipment, and ongoing maintenance costs.
- Additionally, variable income patterns require freelancers to maintain a larger emergency fund than traditional employees. While a typical employee might aim for 3-6 months of expenses in emergency savings, freelancers often need 6-12 months’ worth to account for income fluctuations.
These salary ranges serve as practical benchmarks rather than strict rules, and individual circumstances can significantly impact what constitutes a “good” salary. The growing trend of dual-income households, particularly in high-cost areas, reflects the evolving nature of financial stability in modern America.
Factors That Influence What a Good Salary Is
Your salary’s purchasing power and overall adequacy depend on several key factors that can dramatically impact your financial well-being. Let’s examine each one in detail.
Location
Due to housing costs, urban areas require significantly higher salaries and metropolitan regions often demand 30-50% more income for the same lifestyle. State and local taxes also create substantial differences in take-home pay–for instance, someone earning $100,000 in Texas keeps significantly more than someone making the same amount in California.
Beyond taxes, public transportation availability directly affects necessary income, potentially saving or costing thousands annually. Transportation costs interact with regional differences in basic expenses like groceries and utilities, which can vary by up to 25% between areas.
Perhaps most significantly, healthcare costs show dramatic regional variation, with some states offering better coverage options and lower premiums than others.
Lifestyle
How you live is fundamental in determining what constitutes a “good” salary for your situation. Personal choices between minimal and luxury spending habits form the foundation of salary requirements.
At the same time, family obligations and the number of dependents can multiply expenses–each child typically adds $15,000-$25,000 in annual costs. Existing debt obligations like student loans or mortgages impact available income, sometimes claiming 30-40% of take-home pay.
Beyond immediate needs, financial goals affect required savings amounts, whether you’re planning for early retirement or saving for a house down payment. Your hobbies and interests influence spending needs, from gym memberships to travel budgets.
Career stage
Your position along your career journey significantly impacts salary expectations and potential.
Entry-level positions typically offer lower but stable starting salaries with predictable advancement paths. Mid-career professionals can expect significant salary increases as you progress, often seeing 20-50% jumps with each significant career move. At the upper end, senior positions command premium compensation, frequently including substantial bonuses and equity compensation.
Education level influences starting salary and growth potential throughout a career, with advanced degrees often correlated with higher lifetime earnings. Most importantly, industry experience leads to exponential growth opportunities, particularly when combined with specialized skills or leadership capabilities.
Industry standards
Different sectors have vastly different compensation norms, making cross-industry comparisons challenging.
Technology and finance typically offer higher compensation, with starting salaries often 30-50% above other sectors. In contrast, public service and education often trade salary for stability, offering better benefits and work-life balance instead of high pay. Healthcare provides steady growth potential, with specialized roles commanding premium salaries. The manufacturing sector shows perhaps the most variation, ranging from entry-level positions to highly technical roles with corresponding pay scales.
Compensation also varies significantly between startups and established companies. While established companies typically offer higher base salaries and predictable bonuses, startups often provide lower base pay but include company equity (like stock options) as part of the compensation package. This equity could be valuable if the startup succeeds, but it’s also riskier than a guaranteed salary.
Benchmarks for Determining a Good Salary
While personal circumstances vary widely, several established benchmarks can help you evaluate whether your salary meets your needs and matches market standards. These reference points provide a framework for assessing compensation, though they should be considered guidelines rather than rigid rules.
50/30/20 budgeting rule
The 50/30/20 rule provides a practical framework for determining if your salary supports a balanced financial life. This approach suggests that 50% of your after-tax income should cover essential needs like housing, food, and utilities, while 30% goes to wants such as entertainment and dining out. The remaining 20% should be dedicated to savings and debt repayment.
For example, if you earn $60,000 annually after taxes, you should be able to cover your essential needs with $30,000, spend $18,000 on discretionary items, and save $12,000. If your basic needs exceed 50% of your take-home pay, this might indicate that your salary needs adjustment or that you should consider a lower-cost-of-living area.
Income required to achieve financial goals
Understanding the salary needed to achieve your financial milestones requires working backward from your goals. Whether you’re saving for a home down payment, planning for retirement, or funding your children’s education, each goal has specific income requirements.
Consider retirement planning: financial advisors typically recommend saving 15% of your gross income for retirement. If you aim to retire with $1 million by age 65, you can calculate the necessary annual income to achieve this goal through consistent investment. Similarly, if you’re planning to purchase a home, lenders typically require your monthly payment to be no more than 28% of your gross income, helping you determine the salary needed for your target home price.
National and regional median income
The national median household income was $80,610 in 2023, a 4% increase from 2022. However, this number varies dramatically by region. For instance, while Maryland leads the states with a median income of $98,461, Mississippi is at the other end with $52,985. These stark regional differences highlight why location is crucial in salary evaluation.
Your state’s specific median income provides more relevant context than national figures. For example, a $75,000 salary might feel tight in New Jersey (median $97,126) but would stretch much further in Arkansas (median $56,335). Due to increased living costs, urban areas within states typically command higher medians than their state averages.
Industry-specific salary
Industry choice dramatically impacts earning potential, with some sectors consistently offering higher compensation than others. According to recent data, the information technology sector leads with average salaries of $164,400. At the same time, management roles in companies and enterprises follow closely at $150,042. Finance and insurance round out the top three at $138,632.
On the other end of the spectrum, construction workers earn an average of $80,355, while real estate and rental leasing positions average $81,841. These differences highlight why career choice is crucial in salary potential. As discussed in the factors section, your industry can create a salary difference of over $80,000 for full-time workers. When evaluating your compensation, comparing your salary to industry-specific averages rather than general median incomes provides a more accurate negotiation and career planning benchmark.
Cost-of-living indexes
Your salary needs to be evaluated against your local cost of living to determine its true value. Hawaii tops the national cost-of-living index at 179% of the national average, while Mississippi sits at the bottom at 85.3%. These dramatic differences mean that a $100,000 salary in Mississippi must be nearly doubled to maintain the same lifestyle in Hawaii.
Location-based costs can vary dramatically across key expense categories. For example, housing in California costs nearly twice the national average, while states like Kansas offer housing at just 72.6% of the national average. To determine how far your salary will stretch in your area, you can check detailed cost-of-living indexes by state at World Population Review, which breaks down costs for housing, utilities, groceries, transportation, and healthcare for each region.
Living wage calculations for family sizes
Your salary needs change dramatically based on household size, and location adds another layer of complexity to these calculations. For a single person, the living wage varies from as low as $31,512 annually in South Dakota to $46,072 in Washington, D.C. However, these numbers shift significantly when considering family size.
For instance, while a single person in Massachusetts needs $44,408 annually, a family of four requires $128,086–nearly triple the amount. Even in Mississippi, which has the lowest cost of living index (85.3), a family of four needs $80,766 annually compared to $32,074 for a single person. These calculations factor in essential expenses like housing, childcare, food, transportation, and healthcare, which multiply with each additional family member. For detailed living wage requirements specific to your state and family size, you can reference the comprehensive data available at World Population Review.
How to Assess If Your Salary Is Good for You
The first step is determining whether your salary covers your essential needs while allowing for future growth. Your paycheck should comfortably cover monthly essential expenses, including housing, transportation, groceries, and utilities. Beyond these basics, there should be room for building and maintaining an emergency fund that covers 3-6 months of expenses.
Looking toward the future, a good salary enables meaningful retirement contributions. Financial experts typically recommend setting aside 10-15% of your income for retirement through vehicles like 401(k)s or IRAs. Your salary should also provide enough flexibility for debt management, whether you’re paying off student loans, credit cards, or other obligations.
Professional growth matters, too. A good salary should leave room in your budget for career investments, such as additional certifications, training programs, or educational opportunities that could lead to future advancement.
Consider these key questions when evaluating your salary:
- Does your current income allow you to maintain your desired lifestyle while still saving for important goals? – This includes both short-term objectives like vacation planning and long-term aspirations such as homeownership.
- Are you able to handle unexpected expenses without derailing your financial plans? – Your salary should provide enough cushion to absorb occasional financial surprises without requiring you to take on debt.
- Does your compensation package support both your current needs and future ambitions? – This includes having enough left over after expenses to invest in yourself and your career development.
Your salary assessment should also consider work-life balance. Sometimes, a lower salary with better hours, remote work options, or a shorter commute might provide more value than a higher salary with significant lifestyle sacrifices.
If you feel it’s time to ask for a raise, make sure to read my in-depth guides on the subject:
Negotiating for a Better Salary
Successfully negotiating a higher salary requires careful preparation and strategic timing. The process begins long before you enter any negotiation conversation, and its success often depends on how well you’ve built your case.
Research forms the foundation of any successful salary negotiation. Start by thoroughly understanding market rates for your role, taking into account your location, industry, and experience level. Use reliable salary data from industry reports, professional associations, and reputable websites to establish a realistic target range for your position.
Building a strong case for your worth requires more than just market data. Document your specific achievements, particularly those that have directly impacted your company’s bottom line. Whether you’ve increased revenue, improved efficiency, or led successful projects, these concrete examples demonstrate your value. Include any new skills or certifications you’ve acquired since your last salary adjustment.
The timing of your negotiation can significantly impact its success. Consider these key factors:
- Timing your request with the completion of major projects or achievements gives you concrete examples to support your case and shows you’re delivering value to the organization.
- Understanding your company’s budget cycles and review periods helps you approach the conversation when resources are more likely to be available.
- Being aware of your organization’s financial health ensures you’re requesting at an appropriate time.
Most importantly, enter the negotiation with confidence in your worth and a clear understanding of what you bring to the table. Remember that negotiation is a normal part of professional growth, not a confrontation.
For detailed scripts and step-by-step guidance on what to say during your salary negotiation, read my comprehensive guide: How To Negotiate Your Salary (exact scripts to use for ANY job).
Beyond the Paycheck: Other Factors That Contribute to a Good Salary
While base salary often gets the most attention, a comprehensive compensation package includes numerous other elements that can significantly impact your overall financial well-being.
Health benefits value
The quality and cost of health insurance can dramatically affect your take-home pay. Premium coverage portions paid by employers represent significant value–for instance, a company covering 100% of a $800 monthly premium adds $9,600 to your annual compensation. Deductible and out-of-pocket maximum levels vary widely, potentially saving or costing you thousands annually.
Comprehensive packages often include dental and vision coverage, and family coverage costs can make a substantial difference in total compensation–adding a family to your plan might cost $200 monthly at one company versus $800 at another.
HSA or FSA availability, especially with employer contributions, provides additional tax advantages and healthcare savings opportunities. Some employers contribute up to $1,500 annually to these accounts.
Retirement benefits
Long-term financial security depends heavily on employer retirement benefits, and compensation differences can amount to tens of thousands of dollars annually.
- 401(k) matches vary dramatically between employers, from basic 50% matches up to 6% of salary to generous dollar-for-dollar matches up to 8% or higher. On a $75,000 salary, this difference could mean $2,250 versus $6,000 in annual employer contributions.
- Pension plans, though rare, provide guaranteed retirement income – typically 1-2% of your final salary multiplied by years of service. A 30-year employee making $100,000 might receive $60,000 annually in retirement.
- Stock purchase plans often come with 10-15% discounts on company stock, effectively providing an immediate return on investment through payroll deductions.
Additional options like profit-sharing programs and retirement planning resources add another layer of value to your compensation package.
Time off value
The monetary value of paid time off is often overlooked in compensation discussions but represents a substantial portion of your total package. When you break down the numbers, each week of paid vacation equals about 2% of your annual salary–a benefit that quickly adds up for companies offering generous vacation policies.
Beyond standard vacation time, comprehensive sick leave policies provide crucial financial protection during health challenges, ensuring you don’t have to choose between your well-being and your paycheck. The value extends further with paid holidays–while the typical 10 paid holidays might seem standard, they represent nearly 4% of your annual salary, a significant benefit many take for granted.
In recent years, parental leave benefits have become increasingly important as companies recognize the need to support employees through major life changes. While some companies offer several months of paid leave, truly progressive organizations go even further, providing sabbatical options for long-term employees. This benefit offers both personal rejuvenation and professional growth opportunities.
Work environment
While harder to quantify than salary or benefits, your work environment is crucial to job satisfaction and career growth. Think of it as the foundation that supports or hinders your professional success.
For instance, the quality of your office space and equipment goes far beyond mere comfort–it directly impacts your daily productivity and ability to perform at your best. Similarly, your team’s size and support structure shape your daily work experience and your ability to learn and grow from those around you.
Leadership accessibility and recognition systems create the framework for your professional development. In organizations where leaders maintain open-door policies and regularly recognize employee contributions, you’re more likely to receive the mentorship and visibility needed for career advancement.
This environment, combined with formal professional development programs and training opportunities, creates a comprehensive ecosystem for career growth that can be as valuable as monetary compensation.
Career growth
The long-term value of career development opportunities often exceeds immediate salary considerations and can dramatically impact your earning trajectory.
- Training and certification budgets can provide substantial value. Some employers offer $5,000-$10,000 annually for professional development. This might cover advanced technical certifications, leadership programs, or industry-specific training that could increase your market value by 15-25%.
- Clear promotion tracks with defined salary bands help project future earnings. For example, moving from Senior Engineer to Engineering Manager might represent a $30,000-50,000 salary increase, with subsequent jumps to Director level adding another $40,000-60,000.
- Conference and speaking opportunities build expertise and industry recognition, with employers covering expenses ranging from $3,000-8,000 per major conference, including travel and accommodation costs.
Remember, these benefits represent 20-40% of your compensation package. Consider how these elements work together to create your complete compensation picture when evaluating a job offer or current position. For instance, a position offering $10,000 less in base salary might provide $20,000 more in total value through superior benefits and growth opportunities.
With this knowledge about salary benchmarks, benefits, and growth opportunities, you’ll be better equipped to evaluate and negotiate your compensation package.
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