The salary you need to live comfortably in 15 major U.S. cities | Hacker News Reader

The salary you need to live comfortably in 15 major U.S. cities

cnbc.com

22 pointsianai40 comments

"Metro area" is doing a lot of work in this article. Remember metro area is generally a catchment that includes all sorts of outlying suburbs you mentally discount. So $78K "metro area NYC" is going as far out as Suffolk county on LI, Ocean county, NJ and Putnam county, NY... none of which are normal commute-to-NYC residences.

Note its also a very narrow definition, that fits people in their early 20s mostly: "SmartAsset’s study analyzed the after-tax income needed to live in the nation’s 25 largest metro areas comfortably. To determine the required salary for a single individual with no kids in each city, SmartAsset employed the 50/30/20 rule, which defines a comfortable lifestyle as one in which 50% of after-tax income is applied to basic living expenses (needs), 30% to discretionary income (wants) and 20% to savings and debt."

In other words, a couple with kids probably needs about 2-3x to "live comfortably".. And actual NYC 5-boroughs-only would apply another multiplier. And desirable-to-HN-readers hoods like Manhattan below 96th St, North/West Brooklyn, etc .. yet another multiplier.

I still laugh when I think about the guy I worked with who was like "my father in law said we gotta make $1M gross to own a place & raise a family in Manhattan (ie - UES)". Initially I thought he was deranged. Now I think he was probably right or at least within the order of magnitude.

I also totally missed the definition as being "post tax". So right off the bat they are basically saying $100-110k for "metro area NYC"..

Within an order of magnitude is $100k to $10mm. That’s so wide as to be meaningless.

I know people in Yorkville with kids and a coop making $300k ish. If you want west of lex and private schools, you probably need to double that. 1mm as the minimum is still outlandish even for the UES.

Maintaining a NYC lifestyle on $300K household income makes sense for a family with multiple kids attending public school(s). But owning a place in most desirable locations (including Yorkville) seems to require that additional cushion that had to come from somewhere (extreme saving discipline, investments, inheritance, liquidity event, $1MM HH income, etc.).

Yeah I mean, $300K HHI in a 2-3 BR coop in Manhattan with multiple kids is tight, right. People in that category are probably "house poor". Easily spending north of 50% of monthly income on housing, with most of their savings tied up in home equity. I had a friend like this who lived in a $2M condo and conceded the down payment came from family (even after flipping up other condos for a decade) and that he didn't really have a 6 month savings cushion.

$300K in Manhattan..after-tax you're looking at $180K/year maybe, so $15k/mo. $3k alone on RE Tax, maintenance & insurance on a 2-3BR coop in Manhattan, forever, whether you have mortgage or not. $5k on mortgage probably, even if they've owned a while with a good entry price and high down payment.. probably $1M mortgage.

So now you have 53% of your money immediately just to having a roof over your head. Hopefully you are saving 20% for retirement, your kids college, and a rainy day. Which brings you down to having $4k/mo for electricity, internet, phone, food, clothes, transport, holidays and basically everything for a family, in a place where everything costs a lot of money.

Hopefully you don't do something dumb like own a car and spend another $1k/mo on loan/insurance/garage.

I think people also underestimate the variance of experience of NYC public schools before overleveraging themselves like this.

K-5 is basically zoned, provided there is space. So you can buy yourself into a good school, unless a lot of other people did first and you get shunted off to an adjacent not-so-great one.

6-12, it gets into grades/test/interest/lottery/preferential treatment based placement. Your kid has to apply to middle school and then again to high school, much in the same way they do for college.

You might live in a rich enough neighborhood that your PTA, no joke, has a multi-million-dollar budget.. and famous actors showing up to school events/donating things/etc.

After 5th grade though, your kid could end up anywhere from, at the high end, a nationally known high school with famous alumni, and dozens of kids who end up in Ivys every year. Or in a school 45min+ away by train, with a sub-70% graduation rate, and basically zero PTA to speak of.

This can create some serious brain worms for parents who have enough money to live in a rich suburb with good schools, but choose Manhattan & public schools (run out of money for private).

People should do what they want, but they should do it with eyes wide open.. and not project their desires too much onto their children.

It depends on when they bought, right. The people I know who OWN & have kids in Manhattan fall into a one or more of the following categories:

* bought in 90s

* entered NYC RE market in 90s & flipped their equity up to bigger & bigger places to arrived at their current one

* mommy & daddy money (sometimes quietly they'll mention that's where substantially all the down payment came from)

* live in far ends (Inwood)

* live in compromise spaces (someone is sleeping in living room due to shortage of bedrooms)

* OR, yes, they gross like $1M +/- $250k

One couple I’m thinking of, the husband didn’t leave the military until around ten years ago. So they certainly didn’t buy in the 90s. It was pre Covid though.

There could be family money but not obviously so. I do think the space is a bit tight and they are somewhat house poor, but still. It seems very viable. You aren’t talking about needing to eat instant raman every night.

I could believe savings is the thing that falls on the ground.

Savings (retirement & college) are totally the things that just got skipped.

I have friends with kids going to college now, and they mention the shock of talking to neighbors who basically admit as their kid hits 18 "they got into all these good schools but I can't afford them".

I dunno man, you choose to live in one of the most expensive cities in the world, prep your kid for high achievement, and then fall flat on your face in the final lap.

Guaranteed these are the same people who will be working til they die too.

All this to live on the Upper East Side?

I’m with you, I’d rather a “boring” suburb. But the whole I’m poor on $500k genre can be pretty tiresome sometimes. Yeah, you have to make tradeoffs, but that doesn’t mean you are poor.

Yup. Not poor, just different preferences. And if they feel poor, then bad decision making.

There are many wonderful nearby places to live much easier, on less. Or much better, on the same.

Yorkville 2 bed/2 bath search https://streeteasy.com/2-bedroom-apartments-for-sale/yorkvil...

Sort by price. Absolute cheapest is $875k. 7 pages of listings, scrolling to the mid-way point at bottom page 3 / top page 4 puts you at $1.4M. (quick & dirty med-avg proxy)

Make it a 3 bed and probably add $200k

It seems everyone is skipping the text and going directly to the table and complaining that they're too low. These are post-tax incomes for a single individual with no kids.

Is this owner-class propaganda?

These numbers do not seem realistic 'comfort' wages, and complete fantasy if you have a family.

These are post-tax income numbers for a single individual with no kids.

I still think these numbers are too low, at least for my metro area. $60k post-tax in the Philly metro area isn't enough to rent a decent place alone and also save for retirement. Maybe when they say "take-home" they're assuming that number is after paycheck deductions for healthcare and 401k, but they should definitely specify that.

And the video of the guy earning decent money pointedly shows he blows half of it on good food and bars and going out.

The subtext seems to be to companies: 'this is what you should pay, anything more is wasted', so I'll say again, it seems like owner-class propaganda.

Should probably sub this link: https://smartasset.com/data-studies/salary-needed-to-live-co...

The article adds nothing and takes away some.

Which in itself is largely based on expenses given by https://livingwage.mit.edu and adding some fixed percentages for discretionary spending plus savings. The methodology for the expense calculation is described here: https://livingwage.mit.edu/resources/Living-Wage-Users-Guide...

I can't change the links unfortunately. I'm pretty concerned that this got flagged. Yes, the numbers are low when you look at them without reading the article. But it follows the trend that HN really doesn't like econ/business/finance articles.

For reference, 71,000 after tax is around 97,000 (71,000/.73, before tax and without 401k/healthcare). If you want to contribute 401k, add that value on top of the 97,000 so 10k contribution would be 107,000 and if you're contributing 100/pay check to healthcare another 2,600 or 109,600. Divide that by 80*26 for hourly and it's around 52.69/hr (not that many positions offer to pay such an income on an hourly basis).

So, sorry for posting this to HN.

I wouldn’t take it personally. There’s a lot of people with the ability to flag.

I've seen this '50/30/20 rule' recommend before, in the UK press (financial articles) and by banks [1] and financial resources.

I'm interested in it's origin, whether it still holds true today (is the advice still valid) and alternatives strategies for comparison (given today's current economical climate, rising inflation and interest rates).

[1] e.g. https://www.hsbc.co.uk/financial-fitness/everyday-budgeting/...

given that it's a 1/3 rule elsewhere, it would be interesting to know indeed. it's split a bit differently than your link, but it's a third of your after-tax income to go toward living expenses, a third toward your home and the last third toward savings and investments.

>but it's a third of your after-tax income to go toward living expenses, a third toward your home

so 66% going to necessities rather than 50%?

Based on what they have for my metro, I think you would be living kind of “fake rich” at that income. Renting not owning, lease on a car, etc. you wouldn’t be in a position to build equity, unless you made some serious sacrifices on location and lifestyle.

Can’t stop laughing that they only named the California gas and sales taxes as reasons why San Francisco is the top of the list. These numbers are highly questionable in a lot of ways, but that level of “analysis” is truly stupefying.

According to the article, NYC residents should only be spending $3,271 per month on basic living expenses to live 'comfortably'. I find that a little hard to believe?

The trend nowadays is that you just need a bed and a toilet to be comfortable, so cheaper rent. Same happening here in europe, even on new homes, area is decreasing by the year.

Good luck paying rent and utilities for that much. It’s not impossible but hardly what I’d call easy and comfortable.

"metro area"

This seems like it can't be considering housing costs or something.

im not sure 84k is enough to live confortably in Lompoc Ca, let alone SF (at least, if memory serves me)

The numbers are less than half of what they should be. I live in one of those areas and number presented is more like a poverty line.

The listed numbers are 5k to 7k per month in take home pay for singles. Calling that "poverty line" sounds like peak HN.

Hi, I don’t mean to sound entitled. Here is my reasoning/ breakdown.

Example 1- DFW: $65,000 in a state with not income tax gets you about $4600/month. That does not include medical benefit deductions, HSA or 401k. You can pay easily half of the leftover in rent and utilities on a small apartment. Not much room for saving or car payment. Owning a house is out of question entirely unless you had some previous savings or significant equity.

Example 2- LA: The situation is much worse in LA. $75k after taxes gets you $4980, while the costs of living are significantly higher compared to DFW.

I see that as surviving, not living comfortably.

Here's the minimum expense breakdown for DFW from MIT which the article is based on: https://livingwage.mit.edu/metros/19100 (totaling $32,371 for a 1 adult 0 child household, for which they use a zero-bedroom apartment).

Note that the median household income pre-tax is $58.2k (Dallas, 2.5 persons/household) to $67.9k (FW, 2.8 persons/household). So a single earning 65k after tax complaining that that's near poverty line sounds pretty entitled to me. (For LA the median gross income is $69.8k for 2.75 persons/household.)

https://www.census.gov/quickfacts/fact/table/dallascitytexas...

https://www.census.gov/quickfacts/losangelescitycalifornia

These are pre-covid numbers in the MIT breakdown. A lot has changed.

85k is a poverty wage in SF

That number is post tax. For a single person you’d be looking at a salary somewhere around $130k to hit that net income.

7k take home per month for a single with no dependents is poverty wage in SF?

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