Comparing what a salary is worth

The same salary buys very different lives in different places, and housing drives almost all of the difference. Comparing two cities on rent alone gets you most of the way to the real answer.

State income tax is the piece people forget. Nine states levy none at all, and moving from a high tax state to one of them can be worth several percent of gross income before a single other cost changes.

Common questions

What salary do I need to keep my current lifestyle?

Scale your current spending by the cost of living difference rather than scaling your salary, then add back the tax difference. Salary comparisons alone miss state income tax, which can swing the answer by several thousand dollars a year.

Which costs vary most between cities?

Housing by a very wide margin, followed by childcare, transport and health insurance. Groceries and utilities vary far less than people expect, so a comparison built mostly on rent is usually close to right.

Does moving somewhere cheaper actually help me retire earlier?

Substantially, because it cuts the target and raises the savings rate at the same time. Every $1,000 of annual spending you remove lowers a 25 times FIRE number by $25,000, and the money you no longer spend gets invested instead.

Which states have no income tax?

Alaska, Florida, Nevada, New Hampshire, South Dakota, Tennessee, Texas, Washington and Wyoming. Several of them recover it through higher property or sales taxes, so the full picture needs both sides.

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