A six-figure salary is the goal for many Americans, but depending on where you live, it might not be as far away as elsewhere.
For example, the purchasing power of a $250,000 salary depends largely on the cost of living and the overall tax environment in the city. Higher earners may be able to maximize their income and take advantage of lower tax rates by relocating cities.
If you want to get the most out of your $250,000 salary, the best place to go appears to be the South, according to a recent SmartAsset study overview Where high earners lose the most in taxes and cost of living.
The report compared after-tax incomes in 76 of the largest U.S. cities, adjusted for cost of living data.data is used SmartAsset’s Salary Calculator, which calculates take-home pay after accounting for local, state, and federal taxes. Living expenses include housing, groceries, utilities, transportation, and other goods and services.
In cities like New York and San Francisco, for example, the purchasing power of $250,000 is worth only $83,000 after taxes and living costs, the study found. Still, $250,000 is worth much more in cities like Memphis, Tennessee, and El Paso, Texas, thanks to states with no income tax.
For the lucky 7 percent of American households earning $250,000 a year, here are the 10 cities where that money is going the furthest.
1. Memphis, Tennessee
Since Tennessee has no state income tax, Memphis’ estimated value of $250,000 is $203,663.57. In Tennessee, a salary of $250,000 is taxed at 29.77%.
2. El Paso, Texas
Texas, like Tennessee, has no state income tax. Therefore, $250,000 has a purchasing power of $200,180 in El Paso. Texas wages of $250,000 are also taxed at 29.77%.
3. Oklahoma City
According to SmartAsset, the cost of living in Oklahoma is 17% lower than the national average. So someone earning $250,000 would take home a salary worth $197,381.
4. Corpus Christi, Texas
Considering the low cost of living in Corpus Christi, a salary of $250,000 (taxed at 29.77%) has purchasing power of $196,593.
5. Lubbock, Texas
In Lubbock, only 7 percent of households earn more than $200,000. For someone earning $250,000 a year, their salary is about $196,373.
6. Houston
Houston is the largest city on this list, with more than 2.3 million residents. Here, $250,000 is worth $191,239. However, only 9 percent of the city’s residents earn more than $200,000.
7. Tie: San Antonio, Fort Worth and Arlington, Texas
San Antonio, Fort Worth and Arlington tied for seventh, with the three cities’ $250,000 worth $188,772. Texas has no state income tax, allowing these six-figure earners to get the most out of their money.
10. Jacksonville, Florida
Like Texas and Tennessee, the Sunshine State has no state income tax. Therefore, $250,000 in Jacksonville is worth $186,169. This salary is taxed at a rate of 29.7%.
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