I was having an interesting conversation with some friends this weekend and thought I’d bring it here for discussion. What do you consider to be a “good” salary where you live? I know this varies by location and perspective… but I’m curious. In comparison… What would be a “great” salary?
Anything that is sufficiently higher than your spending habits that you automatically have a cushion for unplanned expenses and the ability to comfortably save and invest for longer term goals.
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In my area, if you’re a public employee and make over $55K, your name is published in the paper. I’d consider that to be good. If I counted correctly, 27 people (out of 1200) made over 100K. I would consider that great. And 4 made at or over $150K (3 just barely) and 0 were over $200K.
Edit: I’m not in the 27 but close enough that my office lovingly calls ms “(locality name) rich.” Half my office doesn’t make the paper despite 10-30 years of experience
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It’s a distinct concept from “good salary” but I wish people talked more about a “living wage” and how it can vary based on location, cost of living, personal circumstances, et cetera. Obviously there are various methods of calculation but I like livingwage.mit.edu. A living wage is enough for basic needs across the board, so I’d say a “good salary” is a living wage plus enough for some fun and some saving/investing, as @ucbalumnus said above.
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If good salary = being able to afford a median priced house, and if we use the mortgage rule of “3X salary with 20% down”, to qualify for that loan amount, the loan applicant needs to make about $300k. 
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In our state, salaries are way below what folks would need to afford a home. 
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Here is the thing. It depends on when you purchased the home. Lets say you’re a parent living in say LA. You just got transferred a year or so ago. It may mean a good salary must be at least $300k or more. Same area, same age but you’ve lived there for 20 years. A good salary for you might be $150k because you bought the house when it was 1/4 to a 1/3 of it’s current worth.
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I think it varies not only state to state but city to city within a state. Salary and cost of living is going to be quite a bit different in my blue collar city in Ohio than my daughters salary/cost of living in Columbus.
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And it depends on the size of your family.
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Oh, absolutely!! I mentioned to my friend in a conversation that this one role pays an average of like 87k here and that it was a good paying job. He kinda laughed at me and told me that’s an OK paying job and is about average. I think he’s out of touch with what people who are not software engineers like him actually make in this area. We aren’t an area with salaries or COL like NYC or San Fran. Our states Median Household Income is something like 63k and the Average Household Income is about 87k. However, a lot of households have more than one income in them to get to those values. My friend does not live in a high cost of living area, so salaries there would be lower than the State Median and State Average. They are a bit higher here in my part of the state. It got me curious what other peoples perspectives were. 
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Median household income in my state is $74K. $82k in my town, with an average home price at $353k. My daughter will be making more than that as a single person straight out of college. I consider that a good salary. 
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Hmm…I misunderstood the original question. I thought the OP was interested in what constituted a good salary for recent grads in our area…which would probably be easier to answer.
When it comes to the area where I live (Chicago suburb), it’s very hard to make a guess what “good” means in general, because as others pointed out there’s a lot of variability and much of it depends on your stage of life. If you bought years ago, as we did, you need much less than if you were looking to buy today. We haven’t drawn a salary for quite a while, but are financially comfortable. It’s complicated.
Edited to add the median household income is reported to be ~$125K.
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I just looked our area up. Median household income is $37K vs $76K for the state. Our houses are cheap, but the quality of those homes is also not good since they are old and usually not well maintained. Utility costs are high. And we’ve long been a city of rentals even before this latest bubble. Only 50% of homes are owner occupied.
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It’s crazy in my head with regards to the cost of the housing market making such a difference. I bought when the market had crashed 13 years ago, so my mortgage is lightyears less than people who are buying today.
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My kids both make a bit less than 41K. That is pretty typical for their cohort (late 20’s/early 30) , throwing out the doctors. They are lucky in that they have no student debt, but owning a house (or even buying a car) is nearly unattainable.
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Assume you are a new grad.
I think it really depends on where you live.
Say you live in Manhattan (as an example). Assume you are single.
Say you share a 2 bedroom apartment with one other person.
Say 750 sft apartment. Rent per year is 75000 – 37500 per person.
Food – cook half the time. Eat out half the time. Groceries are 200 a month. Eating out not expensively 10 meals a week is 300.
Transportation costs 400 a month including some Ubers
Going out twice a week socially 200 x 2 x4 = 1600 a month.
Clothes – 2000 a year; Travel 3000 a year; Medical insurance – assume is covered by employer with a 1000 copay.
We are talking about a post tax expense of ~ 2500*12 + 6000 + 37500 ~ 73500
Assume an average tax rate of 25% (not marginal). So pre tax income needed = 73500/0.75 ~ 100,000.
This is before you count preferred annual saving. I think young people should consider saving a third of their income. So pre-tax income of 150,000 in Manhattan for a new grad is pretty good. This assumes no student loans.
A great income would be 1.5x or 2x of this.
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Yes. And people tend to complain about high property taxes, but everything is relative. (I say that a lot.) We pay about $10k now, but when we moved from TX ~25yrs ago our taxes didn’t go up a whole lot. Why? Because the home we had in the Houston area was in a new-ish master planned community. They were still building infrastructure, so taxes were higher than the general Houston area.
Our house and probably most of my friends’ (late 50s, early 60s) homes have been paid off. The resentment I see in some of them stems from the fact their children are unlikely to be able to afford homes close by…if their children even want to live here.
https://livingwage.mit.edu/ that was mentioned by @HazelEnvirons suggests that kids are expensive.
The link above does break the estimates into various categories, including housing. So you could look at the estimates and replace housing cost with a cost based on your actual housing cost, or one based on assumptions of when a purchased house was bought, to get estimates for various housing situations.
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I really have no idea as I have no clue what anyone other than those in my immediate family make/made (me, DH, son) so, like several posts above, I can only look up what the published averages for our state and his state are:
Arizona Household Income
According to the Census ACS 1-year survey, the median household income for Arizona was $62,055 in 2019, the latest figures available. Compared to the median US household income, Arizona median household income is $3,657 lower.
People seem to like the term “six figures” to describe a great salary so I’d say that, for AZ, $75K would be a good salary and anything north of $100K would be a great salary. Georgia appears to be similar:
Georgia Household Income
According to the Census ACS 1-year survey, the median household income for Georgia was $61,980 in 2019, the latest figures available. Compared to the median US household income, Georgia median household income is $3,732 lower.
Personally, I think most people I know would say that what they make is a good salary and twice that would be a great salary.
Remember DINK? Dual income, no kids can still be very helpful.
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