Only 7% of American households earn $250,000 or more. However, for those with high incomes, certain cities will offer the most bang for your buck, and others will offer much less.
The actual purchasing power of a salary of $250,000 depends on the general economy, taxes, and the cost of living in the city. In the United States, $250,000 is worth as much as $203,664 in Memphis, Tennessee, but as little as $83,000 in New York City.
That’s according to a recent report from SmartAsset, which investigated where high income earners lose the most in taxes and cost of living. The study compares after-tax income in 76 of the largest US cities and adjusts the figures for the cost of living.
Data was compiled using the Paycheck Calculator from SmartAsset, which calculates take-home pay after taking into account local, state and federal taxes. Cost of living expenses include housing, groceries, utilities, transportation, and other goods and services.
For the privileged few who earn $250,000 a year, these are the seven cities where their money has the lowest purchasing power, as well as its real value.
- NY: $82,421
- Honolulu: $82,672
- San Francisco: $82,776
- The Angels: $101,635
- Long Beach, Calif.: $101,635
- Washington, D.C.: $101,865
- San Diego: $105,151
Unsurprisingly, $250,000 is the least expensive in cities like NY and Washington, D.C.due to the high cost of living. In New York, the median monthly rent for a studio is $3,500, according to data from RentHop.
In Washington, DC, the median monthly rent for a studio is also high, at just over $2,300, according to data from RentHop. Last year, the nation’s capital was ranked as the Third most expensive major city in the US based on monthly family spending. New York ranked fifth.
Several California cities are also among the places where $250,000 has the lowest buying power, largely due to high tax on state income. In San Francisco, for example, residents pay about six percentage points more in taxes with salaries of $250,000, compared to a salary of $100,000, reports SmartAsset.
On top of that, the cost of living in San Francisco is 82.8% higher than the national average, according to the study. Similarly, Long Beach, California professionals are taxed at a rate of 38%, with a cost of living 52.5% higher than the national average.
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This article It was originally published in English by Isabella Engel for our sister chain CNBC.com. For more from CNBC enter here.
