Living comfortably might mean pulling your covers up to your chin and watching 9 hours of Veepfor some. The more popular definition, though, is feeling financially stable and secure.
But as the cost of living in the U.S. increased to a 40-year-high in 2022, living comfortably became harder to do. While inflation has started to cool down some this year, simply existing still seems to cost a pretty penny. A recent report from SmartAsset found that youll need to earn an average $68,499 post taxes to live comfortably in Americas 25 biggest metro areas. Thats a 20% increase from a year ago, when you needed just $57,013 after taxes.
But that new average is higher or lower depending on which city you live inespecially if youre in a larger metro area thats already known for a higher cost of living.
SmartAsset looked at the salary needed to live comfortably in the 25 metro areas by using the 50/30/20 budgeting rule (where 50% of post-income goes toward essential living costs like housing, 30% toward discretionary spending, and 20% toward savings or paying off debt). It used MITs Living Wage Calculator from 2022 to calculate the basic cost of living for people without kids in each metro area, defining that as the 50% of essential living expenses. It then calculated the total take-home pay individuals would need to spend an extra 30% on discretionary items and 20% on savings or debt.
The 10 major metro areas that require the highest post-tax salary for comfortable living may come as no surprise:
- San Francisco-Oakland-Berkeley, CA: $84,026
- San Diego-Chula Vista-Carlsbad, CA: $79,324
- Boston-Cambridge-Newton, MA-NH: $78,752
- New York-Newark-Jersey City, NY-NJ-PA: $78,524
- Seattle-Tacoma-Bellevue, WA: $77,634
- Los Angeles-Long Beach-Anaheim, CA: $76,710
- Washington-Arlington-Alexandria, DC-VA-MD-WV: $76,194
- Portland-Vancouver-Hillsboro, OR-WA: $74,086
- Denver-Aurora-Lakewood, CO: $70,892
- Orlando-Kissimmee-Sanford, FL: $67,740
Three are in California, with the San Francisco and San Diego metro areas taking the top spots, where youll respectively need around $84,000 and $79,000 after taxes to live comfortably. It might explain why so many remote workers and ultra-wealthy individuals like Mark Wahlberg fled the state during the pandemic for other states with lower tax rates, better housing markets, and a more affordable cost of living. (Although, it doesnt always turn out to be as sweet of a deal as movers think; Texas still has high property taxes that rival Californias income tax.)
Others stayed in state, moving to more affordable areas nearby. But such migration patterns have created a ripple effect in some areas, disrupting their cost of living. Consider that the income demands to live comfortably in the Riverside-San Bernardino-Ontario metro area, ranked 11th on the list and located near the costlier Los Angeles, had the steepest one-year hike.
High-cost of living and movement typically impacts low-wage workers most. In California, they recently went on strike for better working conditions and salaries. Minimum wage in the state is $15.50 hourly, almost twice the federal requirement but still not enough to match the pace of inflation.
We used to be able to afford to go out to eat, but even fast food is expensive we would donate to the food banks and now were finding ourselves going to those same food banks to get things for ourselves, Tammy Rodriguez, Department of Motor Vehicles employee said in March, as reported by The L.A. Times.
Simply scraping by makes living comfortably seem like a dream.
