Every working person in the world has asked themselves this question at least once in their lifetime: What is a good salary, and am I above or under the average? Comparing ourselves to others is a human trait that has existed since the beginning of time and that will never go away. In fact, with social media pressure, it appears like comparing ourselves to others has become a daily occurrence and competition.
Whether that’s a good or a bad thing is for another debate; in this article, we’re focusing on the question: what is a good salary? The answer, of course, is very subjective.
Average salary by age in the U.S.
The U.S. Bureau of Labor Statistics released its report in the first quarter of 2020 on weekly earnings of wage and salary workers for the American population. Using the information and statistics from Q4 of 2019, the median income for a full-time wage or salary worker on a weekly basis was $936. For a 40-hour workweek, this translates to an annual income of $48 672. This is a 4% increase over the previous year.
This number is an average for the entire melting pot of Americans who work full-time. Of course, many factors are proven to influence the average salary, such as the actual job you perform, gender, ethnicity, education, and age.
From the same BLS report, here are the numbers about the average salary by age for men and women:
- Men ages 35-44: $1 197/week or $62 244/year
- Men ages 45-54: $1 245/week or $64 740/year
- Men ages 55-64: $1 223/week or $63 596/year
- Women ages 35-44: $942/week or $48 984/year
- Women ages 45-54: $927/week or $48 204/year
- Women ages 55-64: $922/week or $47 944/year
What is a good salary?
What is considered a good salary depends very much upon the location you live in. Someone who makes $48 672 per year in Nebraska could not keep up the same living standards as if they lived in San Franciso. Your cost of living is the #1 factor that determines if you’re making a good salary or not.
In my personal opinion, you have a good salary if you can cover off your living expenses comfortably, can save 10% to 15% for retirement, and can take at least one vacation per year.
This means that if you live in San Francisco, you might need to make $100 000 per year to enjoy the same lifestyle as someone who lives in Nebraska and makes $50 000 annually. After paying for taxes, housing, transportation, food, etc. these two individuals are left with the same remaining disposable income. Employers are well aware of the multiple market discrepancies and adjust their workers’ salaries in different cities for the same job.
If you need more disposable income at the end of your week, check out 22 Proven Ways To Make Ends Meet, Make Money Fast & Save Cash.
$45000 a year is how much an hour?
Many part-time job postings display the hourly wage and it’s interesting to know how much our current annual salary stacks up on a per hour basis. Assuming you work 40-hour weeks during 52 weeks per year, that 2 080 hours. The U.S. Bureau of Labor Statistics (BLS) takes into account a few vacation days and bases its numbers on 2 000 working hours per year.
With this information on hand, we can demonstrate that $45 000 a year divided by 2 000 working hours is equal to $22.5 an hour.
Here are a few other examples of yearly salaries on a per hour basis:
- $35 000 a year = $17.50 an hour
- $40 000 a year = $20 an hour
- $45 000 a year = $22.5 an hour
- $50 000 a year = $25 an hour
- $55 000 a year = $27.50 an hour
- $60 000 a year = $30 an hour
- $65 000 a year = $32.5 an hour
- $70 000 a year = $35 an hour
- $75 000 a year = $37.5 an hour
- $80 000 a year = $40 an hour
- $85 000 a year = $42.5 hour
- $90 000 a year = $45 an hour
- $95 000 a year = $47.5 an hour
- $100 000 a year = $50 an hour
The best salary for yourself
A good salary for your living situation depends on your marketability, your personal priorities, and your financial goals. Once you have a clear idea of how much you actually need, you’ll be able to determine how much money you need to make. I’m a strong advocate of using Mint.com to help identify your spending habits and setting up a budget with your financial goals in mind. Your budget should be crafted to allow you to pay for all your living expenses, save for retirement, and enjoy life! How do you stack up to the average American worker in your age group?
Disclosure: This post may contain affiliate links for products I use and love. If you take action (i.e. subscribe, make a purchase) after clicking one of these links, I’ll earn some coffee money ☕ which I promise to drink while creating more helpful content like this. This does not incur any additional cost to you.