A $70,000 Salary Is Enough for Emotional Wellbeing, Research Shows
Whether $70,000 is a good salary for you depends on your financial situation, your geographic location, your profession, and your education, among other factors. But on average, it seems like a $70,000 salary is a very good haul.
Though the cost of living is a big variable and inflation has been chipping away at household budgets, a $70,000 salary is above the median in the U.S. and enough for emotional wellbeing. Read on…
$70,000 is above the median salary for U.S. workers.
According to a news release from the U.S. Department of Labor’s Bureau of Labor Statistics, the median weekly earnings of the 117.5 million full-time wage and salary workers in the U.S. were $1,037 for the first quarter of 2022. With 52 weeks to a year, that median weekly salary translates to a median yearly salary of $53,924.
Meanwhile, the bureau’s May 2021 National Occupational Employment and Wage Estimates reveal that the mean annual salaries for secondary school teachers, avionic technicians, property association managers, zoologists, electronics repairers, and police officers are all in the $70,000 range.
A salary of $70K is also in the sweet spot for emotional wellbeing, researchers report.
In a study of global data published in the journal Nature Human Behaviour in 2018, researchers from the Perdue University and the University of Virginia found, after controlling for demographic factors, that salaries between $60,000 and $75,000 per year are the point of “income satiation” for emotional well-being.
Also, the research team discovered that people may become less happy once their salaries surpass the $95,000 mark. “I think there are many explanations or factors that could be behind it,” lead author Andrew T. Jebb told Insider.
“First, higher income is usually associated with greater time demands, responsibility demands, mental demands,” Jebb added. “It’s not the higher incomes themselves but the costs of them. It is possible that these factors cause one to rate satisfaction with life to be a bit lower, i.e., ‘I like my life but wish I could spend more time with family.’”
The cost of living varies wildly from city to city.
The question of whether $70,000 is a good salary gets more complicated when you consider cost of living. The cost of living in San Francisco, for example, is twice that of Boise, Idaho, according Nerdwallet’s Cost of Living Calculator webpage. That calculator reveals that having a $70,000 salary in San Francisco is like having an $89,100 salary in Manhattan, a $42,644 salary in Chicago, and a $38,656 salary in Philadelphia.
The average worker had a 2.4-percent pay cut last year because of inflation.
Tied to the cost of living, of course, is inflation, with the price of goods and services on the rise. The Consumer Price Index jumped 7 percent between December 2020 and December 2021. Even with wage growth, inflation resulted in a 2.4 percent pay cut for the average American worker, according to Labor Department data cited by CNBC.
“In what was the best year for wage growth that we have seen in many, many years, it still comes up as a loss for many households,” Greg McBride, chief financial analyst for Bankrate, told CNBC. “Their expenses increased even faster and chewed up all of the benefit of whatever pay raise they had seen.”