Will you make $55,000 a year from your next job, and would like to know if it is enough to enable you to live comfortably? At a time when the annual mean wage for a full-time worker in the USA is $54,132 a year, earning $55,000 gross income sounds great. Still, the question remains; is a $55K salary good? Let’s find out.
Is a $55K Annual Salary Good?
Yes, $55K a year is a good salary as it is slightly above the annual mean wage in the U.S. With this income, you can afford to live in most cities, especially if you are a single person or couple with little debt no dependents.
However, given that this is lower than the real median household income of $70,784, according to the U.S. Census Bureau, it might not be a good salary for some people. To understand if this is enough for you, you should consider factors such as where you live, your lifestyle, how you pay taxes, your current financial situation, and the number of dependents.
How Much Is a $55,000 Salary per Hour?
Using the standard 40-hour week schedule for 52 weeks (40×52 =2080), you will make a $26.44 hourly wage with a $55k annual salary. This is more than the minimum wage of $7.25 hourly rate.
It translated to $1057.69 per week or a $4,538.33 monthly paycheck, which is generally a good salary in inexpensive cities.
Note that these are pre-tax estimates, and your actual take-home salary will depend on federal and state tax laws. Let’s find out below how much you will be earning after taxes.
How Much Is a $55,000 Salary After Tax?
Your net income will depend on where you live. If you stay in heavily taxed states such as California and Hawaii, your take-home pay will be much less than if you live in Tennessee or South Dakota, which are states that do not impose an income tax.
Generally, you can expect between $37,592 to $46,074 in your bank account after tax and other deductions. This excludes pre-tax contributions such as 401(k) plans or health insurance.
Here is a breakdown of how taxation impacts a $55K yearly salary if you live in Tennessee:
| Yearly | Monthly Amount | |
| Income | $55,000 | $4538.33 |
| Circumstance Exemption | $13,850 | $1,154.17 |
| Taxable Income | $41,150 | $3,429.17 |
| Federal Income Tax | $4,718 | $393.17 |
| Social Security | $3,410 | $284.17 |
| Medicare | $797.50 | $66.46 |
| After-tax Salary | $46,074.50 | $3,839.54 |
On the other hand, if you live in California, here is how state taxation will impact your take-home salary.
| Yearly | Monthly | |
| Income | $55,000 | $4538.33 |
| Circumstance Exemption | $13,850 | $1,154.17 |
| Taxable Income | $41,150 | $3,429.17 |
| Adjusted Federal Income Tax | $4,220.02 | $351.67 |
| State Income Tax | $1826.38 | $152.20 |
| California state disability Insurance | $497.98 | $41.50 |
| Social Security | $3,410 | $284.17 |
| Medicare | $797.50 | $66.46 |
| After-tax Salary | $43,750.14 | $3,645.85 |
What Jobs Pay $55,000 a Year?
Since a $55K annual salary is slightly more than the mean median salary in the U.S., many jobs pay in this salary range. These include:
- High school teachers
- Fundraisers
- Legal support workers
- Heavy machinery operators
- Survey researchers
- Administrative assistants and personal assistants
- Videographers and editors
- Physical therapy assistants
- Flight attendants,
- Sales representatives
So, Is $55,000 a Good Salary for You?
As I mentioned, $55K is a good salary if you are single or a couple with no debts and a strict budget. However, there are several factors that you must consider when evaluating whether you can live comfortably on this salary. These include:
- The cost of living in your city
- Your current financial situation
- Your lifestyle
The Cost of Living in Your City
How expensive or affordable is your city? Considering the cost of living, you can easily estimate whether $55K is a good salary for you or if you need to earn more money.
If you live in an expensive city like San Francisco or New York City with a particular salary, where the average rent for a studio is $3,516, a one-bedroom is $4,499, a two-bedroom apartment is $5,652, and a three-bedroom is $5907, it will be harder to live on this salary.
On the other hand, if you live in an affordable city such as Dayton, Ohio, where the average rent of a studio is $597, one-bedroom is $725, two-bedroom is $1235, and three-bedroom is $1500, 55k a year will be a decent pay since the cost of living is low.
Your Current Financial Situation
The easiest way to evaluate your financial situation is to look into your debt situation.
How much debt or personal loan do you have, and how long can it take you to repay it? Consider your student debt, bank loans, car payments, and credit card payments, plus any other regular payments you are expected to make.
If they are more than $50k, $55k might not be a good salary for your needs. Otherwise, if your debt is below $10k or you are debt-free, you might afford a comfortable life.
Your Lifestyle and Spending Habits
What are the lifestyle habits that affect how you spend money? To better answer these, ask yourself these questions:
- Where do you live, and how much do you spend on utilities and essentials?
- Where does the rest of your money go? Do you love partying, going out, shopping, or an expensive hobby?
- Are you frequently saving money? What about your investments?
If you lead a lavish lifestyle, this will not be a good salary to cover your expenses.
The best way to take control of your spending patterns is to adhere to the 50/30/20 budget rule, where 50% of your income goes to essentials, 30% takes care of your wants, while you save 20% or use it to pay the debt.
Essentially, this is how your budget should look like (assuming your-take home salary is $43,750.14 annually and $3,645.85 a month):
| Amount | Purpose |
| $1822.93 (50% of your take-home pay) | Essentials (Basic needs) such as:RentUtilities (Electricity, gas bills, garbage, etc.)Basic groceriesInsurancesDebt repayment |
| $1093.75 (30% of your take-home salary) | Wants such as:Eating outShopping for clothes and other non-essentialsLeisure and entertainment |
| $729.17 (20% of your take-home salary) | Savings & investment |
How to Live on a $55K Annual Salary
While I believe $55,000 a year is a good salary for most people and definitely much higher compared to those who earn $20,000 annually, you do not have the privilege to be extravagant, even if you live in a cheap city. If you are in an expensive city, this might not be a good income, especially if you are a couple or family.
These include staying in an affordable neighborhood, owning a cheap car, and limiting your expenditure on non-essentials.
The best way to ensure $55K a year is a good salary for you is to:
- Live frugally: Start consciously monitoring each cent you spend, and you will find it easier to stick to your monthly budget and save the extra money. For instance, you can use public transportation instead of making a huge car payment on a monthly basis.
- Save money. I recommend saving at least $5,000 annually if you make $55K yearly. Or if you are up for it, you might want to save $5,000 in 3 months.
- Acquire high-income skills. Get relevant skills in your field that will enable you to get a promotion or negotiate a higher salary.
- Get a side hustle. If you only work 40 hours a week, you have plenty of time to start a side hustle that earns enough money. These include doing grocery deliveries, driving for ride-hailing companies, creating an online course (passive income), becoming a freelance writer, doing party planning, and even creating a food budget for other people.
Related Questions
Is $55K a Good Salary for a Family?
While $55K a year is a decent salary, it might not be the best annual income for a family, as each child comes with an extra financial burden. If, as a couple, this is your only income, it is best to consider ways to start making more money on the side to help with the bills and costs of raising the children.
Can I Earn $55K Annual Income Without a Degree?
Yes, many jobs offer a gross pay of $55K annually without requiring a degree. These include building inspectors, first-line supervisors, property managers, pile driver operators, commercial truck drivers, firefighters, and dental hygienists.
Conclusion
Although lower than the median household income, $55,000 a year is a good salary if you are a single person getting into an entry-level position. However, if you are a family, it will be quite challenging to live on this salary. So, you will either have to increase your household income or move to an affordable city and cultivate healthy financial habits.
