Only 7% of American households earn $250,000 or more. For those high-income earners, however, certain cities will offer them the most bang for their buck — and others will offer far less.
The real purchasing power of a $250,000 salary depends on a city's overall economy, taxes and cost of living. Across 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 by SmartAsset, which investigated where high earners lose the most to taxes and cost of living. The study compares the after-tax income in 76 of the largest U.S. cities and adjusts the figures for the cost of living.
The data was compiled using SmartAsset's paycheck calculator, 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.
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For the privileged few earning $250,000 per year, here are the seven cities where your money has the least purchasing power, as well as how much it's actually worth.
- New York: $82,421
- Honolulu: $82,672
- San Francisco: $82,776
- Los Angeles: $101,635
- Long Beach, California: $101,635
- Washington, D.C.: $101,865
- San Diego: $105,151
Unsurprisingly, $250,000 goes the least far in cities such as New York and Washington, D.C., due to the high costs of living. In New York, the average monthly rent for a studio apartment is $3,500, according to data from RentHop.
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In Washington, D.C., the average monthly rent for a studio apartment is also high, at just over $2,300, according to data from RentHop. Last year, the nation's capital ranked as the third-most expensive major U.S. city based on monthly household spending. New York ranked No. 5.
Several cities in California also make the cut for places where $250,000 has the least purchasing power, largely due to the state's high income tax. In San Francisco, for example, residents are taxed roughly six percentage points more in taxes at $250,000 salaries, as compared with a $100,000 salary, SmartAsset reports.
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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