Is 70k a Good Salary in the U.S? Evaluating the Facts
Benchmarking a $70,000 Salary in the United States
When evaluating if $70,000 is a good annual salary, it helps to compare it to national benchmarks. According to the U.S. Census Bureau, the median household income was $67,521 in 2020. This means a $70,000 salary surpasses the median and what a typical household earns.
Examining income distribution percentiles also provides useful context. Households earning $70,000 fall between the 60th and 70th income percentiles nationally. In other words, 40% to 50% of households earn less than $70,000 per year. This indicates a salary of $70,000 positions an individual or family solidly among the upper half of income earners in the country.
Weighing Cost of Living and Financial Obligations
While earning above median income is a good starting point, determining whether $70,000 is actually a good salary requires assessing cost of living and financial responsibilities. Expenses can vary dramatically depending on factors like:
- Geographic location
- Family size
- Major debt obligations (mortgage, student loans, etc.)
- Personal lifestyle choices
For example, $70,000 goes significantly further in a smaller city in the Midwest compared to an expensive coastal metro area like San Francisco or New York, where median rents alone exceed $3,000 per month. Those supporting multiple dependents will also have higher total expenses. And non-discretionary debt payments like student loans can eat up a sizable portion of monthly take-home pay.
Thus, while earning $70,000 may be well above average nationally, it’s essential to weigh these factors to determine if it allows for a comfortable standard of living based on your household’s specific circumstances.
Evaluating Potential Quality of Life
Assuming the salary appropriately covers baseline living expenses, the next step is assessing potential quality of life. In particular, a $70,000 income typically enables reasonable affordability across categories like:
Housing
A salary of $70,000 may allow for homeownership, especially in more affordable regions. Median home prices as of August 2022 were around $389,500 nationally according to Redfin. On a $70,000 income, homes valued under $250,000 are likely affordable depending on other expenses and debts. Renting is also feasible in most markets.
Transportation
Owning one or more reliable vehicles is realistic on this salary outside of dense urban areas with robust public transit systems. This provides convenience and flexibility for daily commuting needs.
Healthcare
Employer-subsidized health insurance plans are common for many white-collar roles paying around $70,000. If unavailable, covering the premiums for private health insurance for yourself or your family is doable without breaking the bank. This ensures access to healthcare and financial protection in case of medical emergencies.
Education
While paying full freight for multiple kids to attend elite private universities may be untenable, a $70,000 salary still allows for saving towards college expenses. Public K-12 schools are free, but some private primary or secondary school tuition costs can also potentially be managed.
Leisure & Lifestyle
Earning $70,000 provides discretionary income for fitness memberships, hobby supplies, occasional fine dining, domestic and international vacations, and other leisure pursuits that enhance quality of life.
Strategies for Maximizing Value
To optimize a $70,000 salary, creative budgeting and supplementing income can stretch your earnings even further:
Budgeting & Financial Planning
Creating and adhering to a household budget allows you to minimize unnecessary expenses. Strategically reducing housing, transportation, food, and personal costs frees up cash that can be allocated towards financial priorities like:
- Paying down costly debts
- Boosting emergency savings
- Increasing retirement plan contributions
- Funding college savings accounts
Automating payments towards these critical goals is an efficient way to maintain discipline and advance your family’s financial stability over time.
Generating Additional Income
Supplementing a $70,000 salary with extra income expands your cash flow even more. Potential options could include:
- Freelancing in your professional field
- Starting a side business that leverages your skills and interests
- Investing in dividend stocks and high yield savings accounts
- Monetizing a hobby like photography or baking
- Renting out spare rooms or property through home-sharing services
Adding just an extra $10,000 per year from a few different side pursuits or prudent investments gives you bonus disposable income for vacations, home renovations, debt reduction, or whatever purposes motivate you most financially!
