Hitting the six-figure salary mark is a big deal. In 2023, individuals earning $100,000 sat at the 81st percentile of all U.S. earners. 

But how does making $100K change your lifestyle? In a 2023 study, SmartAsset calculated take-home paychecks by removing state, federal, and local taxes from a $100,000 salary, then adjusted the remainder based on each city's relative cost of living – taking into account housing, groceries, utilities, transportation, and miscellaneous goods and services. 

What they found was that a six-figure lifestyle can look very different…depending on where you live. Let’s get into it.

Key points:

• Each city’s cost of living depends on several factors such as taxes, housing, and transportation.
• Don’t take $100,000 salaries at face value. Your salary is different from your take-home pay.
• Browse the highest-paying jobs (including high-paying trade jobs) on our salary database.

Least Expensive Cities in the U.S.

The city that will give you the most bang for your buck is Memphis, Tennessee. This is where a six-figure earner would have the equivalent of $86,444 left after taxes. But why? Tennessee has no state income taxes and a low cost of living of 13.8% below the national average.

Texas is another location with a low cost of living. It’s home to seven out of the top 10 most affordable cities in the U.S. A $100,000 salary on average nets you $77,885 after taxes across the 10 Texas cities.

Most Expensive Cities in the U.S.

For the most expensive cities, New York delivers the toughest blow. It’s ranked dead last in affordability, with a $100,000 salary in the Big Apple amounting to just $35,791 when you factor in taxes and cost of living.

Combined federal, state, and local taxes nab about 41% of your paycheck, and the cost of living is 83.6% higher than the national average.

California is another one that is right up there with New York. It has five of the 10 priciest cities: San Francisco, Los Angeles, Long Beach, San Diego, and Oakland. 

To actually take home $100K a year, you’d need to see a salary of over $300,000+ in more expensive cities like New York, Honolulu, or San Francisco. But to take home $100K in Memphis or El Paso? That salary is much lower and falls just under $120,000.

What does it mean for you? 

Do your research. When comparing jobs in different cities, don’t take the salary at face value. Taxes differ state to state, which means that your take-home pay differs too. Factor in the cost of living (average cost of housing, transportation, and goods and services), and that salary can mean very different lifestyles in different cities. 

Keep in mind that jobs based in the best-bang-for-your-buck cities typically adjust salaries to their affordability. In the Memphis metro area, for instance, the median income is $55,000 per year. This is significantly lower than the national median of nearly $70,000.

At the end of the day, remember that your salary is just a means to build the life you want to live. If you’re location-agnostic and dream of buying a home, you may want to consider an opportunity in Texas. But if you’ve always dreamed of living in New York City, even the sweetest take-home pay in Memphis won’t satisfy you.

What if you already live in one of the least affordable cities? 

No, you don’t need to pack your bags and ship off to Tennessee. You don’t have to move away from a place you love just because it’s expensive. Especially if it’s not the type of place you’ll thrive.

There are a few things you can do to reduce your personal cost of living, no matter your location. 

Max out your retirement accounts. This one’s a double-whammy. Save more for retirement while cutting your tax bill for the current year. As of 2023, the IRS allows up to $22,500 in employee contributions to a 401(k) or a similar workplace plan and $6,500 to an IRA. When you contribute pre-tax, you reduce your taxable income — AKA pay less in taxes.

Avoid lifestyle creep. Living in a more expensive city can cause “lifestyle creep.” Things that once seemed like luxuries are now part of your everyday lifestyle. You find yourself ditching your affordable gym to join your friends in the fancier one with a sauna or catching up with friends over a Michelin-star restaurant meal rather than a home-cooked one…you get it. You deserve to intentionally uplevel your life as you earn more – but you don’t want to accidentally fall into lifestyle creep.

The antidote to lifestyle creep? Budgeting. Think about what you value and where you want your money to go—then make sure it’s actually going there. Build out a budget for the biggest spending buckets in your life, like food, rent, entertainment, and transportation, then stick to that budget. Most importantly, base those numbers on your gross income (post-tax earnings) instead of your salary.

How to Increase Your Salary to Accommodate High Cost-of-Living Locations

When you can’t find any more ways to decrease your own cost of living, check if you’re being paid fairly to begin with. Take our free quiz to find out!

If you find that you aren’t being paid fairly, look for ways to negotiate a higher salary or ask for a raise at work.

Don’t forget about negotiating for things like sign-on bonuses, more paid time off, and health benefits. When you negotiate benefits for a new job along with your salary, you may have the chance to decrease your cost of living with benefits like relocation assistance, remote work, and transportation reimbursements. Need some help? Use our free list of salary negotiation scripts.

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