A recent study has revealed the income needed for families to live comfortably in the United States, and the stark contrast in the cost of living between states is striking.
The study revealed that in the most expensive states, families need almost $300,000 to simply live “comfortably.”
The cheapest state requires about half that salary, still more than $100,000.
Meanwhile, the average annual wage in the US is $59,428, or $28.34 per hour, as of May 2024.
The number one most expensive state to live comfortably is Massachusetts, where a family with two working parents and two children needs a total household income of $301,184.
In contrast, Mississippi is the least expensive, where a family requires $177,798 to cover their expenses and maintain a satisfactory quality of life.
Hover or hold your finger over the states below to see the income you need to live there comfortably.
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Surprisingly, the number one most expensive state to live comfortably is Massachusetts, where a family with two working parents and two children needs a total household income of approximately $301,184.
In contrast, Mississippi stands out as the least expensive state, where a family requires an income of $177,798 to cover their expenses and maintain a satisfactory quality of life.
The lower cost of housing and overhead expenses contribute to Mississippi’s affordability relative to other states.
The study used data from MIT’s Living Wage Calculator, last updated on February 14.
To determine the income needed for a comfortable lifestyle, researchers used a balanced budgeting strategy. This approach allocated 50 percent of income to cover needs such as housing, utilities and food, ensuring that families could meet their basic needs without financial strain.
Another 30 percent went toward discretionary spending, including flexibility in lifestyle choices and leisure activities. And the remaining 20 percent was used for savings or investments, promoting financial security and long-term stability.
The analysis further revealed that to live comfortably in the top five states, families need to earn more than $270,000 a year, Visual Capitalist reported.
Following closely behind Massachusetts is Hawaii, where families need a substantial income of $294,611 to enjoy a comfortable lifestyle.
The high cost of living in the tropical paradise poses a considerable financial challenge for residents.
Connecticut came in third on the list, with a decent income requirement of $279,885.
Then, of course, New York came in fourth place, with families needing an annual income of $278,970 to maintain a comfortable lifestyle.
The competitive real estate market increases living expenses for residents throughout the Empire State.
Rounding out the top five is California, where a family needs an income of $276,723 to cover their expenses comfortably.
After Mississippi, Arkansas ranked second as the least expensive state, where a family needs an income of $180,794 to cover their expenses comfortably.
Next comes West Virginia, where families need an income of $189,363 to maintain a comfortable lifestyle.
Louisiana is close behind, with a minimum income requirement of $189,613.
Rounding out the list as the fifth least expensive state to live comfortably is Kentucky, where a family needs an annual income of $190,112 to cover their expenses.
In February, a report suggested that in 15 major U.S. cities, where the cost of living is particularly high, an annual income of $100,000 is only enough to qualify as “lower middle class.”
A six-figure salary may have once been considered the benchmark for a comfortable lifestyle in America.
A February report suggested that an income of $100,000 is only enough to qualify as “lower middle class” in 15 major U.S. cities.
San Jose, CA requires the third highest salary to qualify as “lower middle class.” Workers need to earn between $90,673 and $151,122
San Francisco, CA, families need between $91,126 and $151,877 to be considered lower middle class
Annual inflation was 3.1 percent in January, which was down from 3.4 percent in December but still 0.2 percent higher than expected.
Those who earn six figures in these areas mean they are among the poorest 40 percent, not meeting the definition of middle class.
In three of the most expensive cities – Arlington, San Francisco and San Jose – earning $150,000 a year is not even enough to move beyond “lower middle class” and be considered fully middle class. See the definitions in the box below.
The findings, from personal finance website GoBankingRates, highlight the extent to which rampant inflation is affecting even high-income families.
Crippling increases in the cost of food, housing, child care and transportation have affected the entire United States, and some areas more than others.
Arlington, Virginia, turned out to be the most expensive city: households need at least $91,591 to be considered “lower middle class.” Until they reach $152,652, they would not qualify as middle class.
