We all grow up intending to have a higher-than-average salary, but how does your income stack up?
You might wonder, ‘What is considered a high salary’ and ‘Do I make enough?’ We’ve compiled information from the Bureau of Labor Statistics and the Census Bureau to help you see how your salary compares.
Table of Contents
What Salary Is Considered Rich?
There isn’t a particular salary that is considered rich. It depends on different factors, and various studies have varying answers.
Each year the IRS notes the top 1% income level. The latest data from the tax year 2020 shows that salaries considered rich are $548,200 or higher, making it fair to assume that any salary higher than $500,000 can be considered rich.
What Factors Affect High Average Yearly Income?
Many factors affect whether your income level is considered high, including the following.
The cost of living varies throughout the United States. For example, it is much more expensive to live in San Francisco than it is to live in Boise, Idaho.
You could hold the same job in both locations, but a good salary in each state would look different. The reasons vary greatly depending on the following:
- Cost of living in the area
- Job demand
- Job prospects
- Job scarcity
However, when comparing salaries in two states, you must consider the cost of living. For example, a good annual income in California must be much higher than in Idaho because you need much more money to live comfortably in California. So even if it’s a good yearly salary, it may not be a high salary if it’s not enough to make living expenses affordable.
Industry and Company
Each industry has different factors affecting the pay range. For example, industries that require extensive schooling or more than a high school diploma usually pay more money because of the education level and training required.
Industry demand also plays a role in the average yearly salary paid. For example, the pay may be higher in an industry with fewer available workers than in an industry saturated with job prospects.
Even within the same industry, though, salaries can differ. The type and size of the company you work for will determine your pay range. Usually, if you work for a larger, more established company, you’ll receive higher pay than from a smaller company simply because smaller companies can’t afford it.
You may have the same credentials for both jobs, qualifying for both, but based on the company’s profits and what they can afford, the average salary paid will differ.
According to the Bureau of Labor Statistics, workers with only a high school diploma earn 40% less than those with a bachelor’s degree. Of course, as you gain more education, your earnings increase. Employees with a Master’s degree make as much as 17% more than those with a Bachelor’s degree.
To have a chance at the highest household income, you’d need a Doctoral degree. On average, those with a doctorate earn 60% more than those with a high school diploma.
Experience can help you earn higher salaries and reach your financial goals. If you stay with the same company or change jobs but stay in the same industry, you can gain experience.
When trying to make more than the average income in the US, you should have 2 – 5 years of experience in your industry. Any experience beyond that will continue helping you become a part of the upper middle class.
Why Is a High Yearly Income Important?
A high yearly income level is essential to help you cover your living expenses while helping you achieve your financial goals. The way to make the most of a high average annual salary is to spend it wisely.
You could ask yourself, ‘Am I rich,’ but the answer doesn’t depend on your income, as long as you make a decent salary. Instead, it depends on your financial habits. If you save and invest money, only spending on the necessities and the occasional splurge, you’ll be able to feel rich.
However, you could be in the top 20 percent income level and still not be rich if you have such high expenses that you can’t save or invest for the future.
What Is the Average American Salary?
According to the US Census Bureau, the average income in the US is $83,135. The US Census Bureau doesn’t differentiate by job, though, so the average income per person could include many sources of income.
What Is the Median Salary in the US for Men?
The median salary for men in the United States is $1,013 per week or $52,676 per year, 15.7% more than the US median salary for women.
What Is the Median Salary in the US for Women?
The United States median income for women is $930 per week or $48,360 annually.
What Is the Median Salary in the US Needed to Live On?
For a family of four with two adults and two children, the median salary needed is $24.16 per hour or $100,498.60 per year.
What Is the Median American Income?
The median earnings for Americans per week is $1,010 as of the 4th quarter of 2021. American Median income is usually lower than the average income because there are outliers on the high and low end of American salaries.
What Is a Good Salary?
Now that we’ve discussed average and median income levels, let’s look at what is a good yearly salary.
Like most financial questions, it doesn’t have a black-and-white answer. A good salary depends on the industry, job title, area, cost of living, education level, and experience.
Is 75K a Good Salary?
The median income level in the United States is $52,520 per year, so the answer is yes when you ask if 75k a year is a good salary. You’re earning more than half of the United States; however, with the high cost of inflation, it could be hard to survive on a $75k salary unless you’re single.
If you have a family, a $75k salary would only work if both spouses worked and split the bills. However, if only one spouse works, it’s essential to live on a strict budget with a lower salary so you spend your money wisely and have enough money to cover fixed and variable expenses, as well as savings and debt payoff.
At $75k, you might not have much to save for retirement right away or have much money to put in the bank unless you are frugal with your spending.
Is 95K a Good Salary?
If you’re making $95k per year, you’re making more than the average salary in the US. However, especially during today’s high inflationary times, you shouldn’t overspend, even with a $95k salary.
If you are a single person, $95k should be plenty for your bills, variable expenses, and financial goals. However, if you have a family, depending on its overall costs, especially if you pay for childcare, $95k may not be enough.
Is 130K a Good Salary?
Once you cross the $100k threshold, you can rest assured that your salary is considered ‘good.’ At $130K, you’re entering the phase where you may be able to care for your entire family on your salary alone, but again, it depends on your family size. If you have 3+ kids, for example, you may need more money to cover your expenses and achieve your family’s financial goals.
If you’re a single person, a $130k salary is great. Depending on your lifestyle and other factors, you may have more than enough money to cover your bills, save for the future, and spend on certain luxuries.
Is 160K a Good Salary?
In most areas, $150k is considered middle class, so at $160k, you are just above middle-class income.
If you make $160k, you’re likely working in advanced positions that significantly impact the company that employs you.
Like any income level, $160K may not be enough if you have big spending habits. Look at your budget to determine if $130k is a good yearly salary. Do you have a lot of disposable income each month, or are you living paycheck to paycheck?
Believe it or not, even people who make more than the average salary in the US still live paycheck to paycheck.
Is 170K a Good Salary?
As your income nears $200K a year, you are in an even better financial position. However, if you make $170K a year and are the only adult in the house that works, it may be less than you’d think.
While it’s much more than the median household income in the US or even the national average, you may not make enough if you have a lot of expenses or a large family. A key factor to consider is your net worth. At $170k per year, you should have a high net worth or at least be on your way to building one.
However, if you spend more than you make or try to ‘keep up with the Joneses,’ you may not have as much money as you’d hoped.
Is 200K a Good Salary
A $200k household income should cover most expenses and leave enough room for savings. But, again, at $200k a year, you make much more than the median wage, and again as long as you don’t overspend, you should have plenty of money to get the most out of your paycheck.
How to Make More Than the Average American Income
The national average salary is $83,135, which means most people can find positions to make this salary easily, or at least with a few years of experience. But how do you make more than the average income in the US?
Here are some top tips.
Regardless of your field, always stay at the forefront of what’s happening. Of course, some careers, such as nursing, require ongoing education, but every professional could benefit from continued education.
Consider returning to school to earn a higher degree, learn a new skill set, or brush up on your skills. The more recent your education is, the more valuable it is for employers. Your current employer may even give you a raise if you earn another degree while working there.
Keep Up With Future Technology
Technology is constantly changing, so it’s crucial to stay at the forefront of it. In addition, with the onslaught of artificial intelligence and new technology, it’s essential to handle the changes and show your employer what you can do.
Staying marketable and providing employers with a desired skill set will put you at the forefront of the competition, allowing you to get the top-paying jobs no matter the local job demand.
Network as Much as Possible
Networking is essential in any career. Even if you’re happy with your current employer, always putting yourself out there and letting others know about your capabilities is essential. You never know when new opportunities may arise that will help you make much more than the average income in America.
What Is a Good Annual Income for You?
Determining a good annual income for yourself is subjective. No two people will need the same salary to consider themselves well off.
To determine a good salary for yourself, consider these factors:
- Current bills – Your income should cover your bills, at the least. If your bills are excessive, you can consider cutting back, but to determine when you have a good yearly salary, you should be able to handle all bills.
- Debt – If you have debt, your salary should be able to cover it, allowing you to pay it off faster than making the minimum payments allow. The quicker you can pay off your debts, the higher your net worth will be.
- Goals – A good annual income should allow you to save money for your future, for both retirement and other goals. How much you need will vary depending on what you want to achieve. Consider short and long-term goals when deciding how much you should save.
- Self-esteem – Everyone has a number they think they deserve for their career. Your average monthly income should make you feel good about yourself and your ability to meet your financial needs.
What Is Considered a High Salary – FAQs
How Much Money Makes You Rich?
Rich and wealthy don’t mean the same thing. If you’re rich, you may have a salary much higher than the average US household income, but that doesn’t make you wealthy.
If you spend all your pay without investing or saving, you likely won’t have enough net worth to consider yourself wealthy. While being considered rich is a great feeling, it doesn’t define you or your ability to handle your finances.
How Much Does the Average American Make a Month?
The average American household makes $6,927 per month or $83,135 per year.
What’s a Good Starting Salary?
The average person between ages 16 – 24 starting their career makes a median income of $717 per week or $37,284 per year. This is well below the average or United States median income, but it’s a starting salary that, with the proper steps, can be increased over time.
How Many People Make Over 200K?
According to Zippa, over 10 million people make over $200k. That means 10 million people make much more than the average or median income in the US.
When determining what is considered a high salary, focus on what you need to make to take care of your family’s size and financial needs. While making more than the average monthly salary in the US is a good goal, you should focus on what you and your family need to determine what makes a good salary.
Samantha Hawrylack is a personal finance expert and full-time entrepreneur with a passion for writing and SEO. She holds a Bachelor’s in Finance and Master’s in Business Administration and previously worked for Vanguard, where she held Series 7 and 63 licenses. Her work has been featured in publications like Grow, MSN, CNBC, Ladders, Rocket Mortgage, Quicken Loans, Clever Girl Finance, Credit Donkey, Crediful, Investing Answers, Well Kept Wallet, AllCards, Mama and Money, and Concreit, among others. She writes in personal finance, real estate, credit, entrepreneurship, credit card, student loan, mortgage, personal loan, insurance, debt management, business, productivity, and career niches.