Aevy recently did a video answering this question on their YouTube channel. This post is a breakdown of their analysis — along with my comments having lived in America for 7 years now.
At the outset, it may seem like $100k is a lot of money: it’s equivalent to 83,00,000 INR in India.
The median salary in India is about 9,00,000 INR (and this is being generous).
Even counting for something called “Purchase Power Parity”, $100,000 in the U.S. is about 21,00,000 INR in India (as shared by The World Bank).
As you see, that’s well above India’s median income.
Based on just the above, $100,000 seems like a lot of money for anyone. Right?
Except…
🔴 Here’s what the numbers don’t tell you.
- High cost of rent: The price per square foot for rent in the U.S. is much higher than in India. The average cost of rent in cities like San Francisco can easily go upwards of $2000+ for 1BHK. Compare that to about 25,000 INR (or $300) for a 1BHK apartment in Bangalore, India.
- Tipping culture: There’s no concept of tipping in India. I was introduced to it for the first time when I moved here. In America, tipping is the norm and the rate can range from 10-20%, with 15% being an expected tip at a restaurant. So the cost of food is higher than one would think.
- Transportation costs: Public transport in big cities is often inadequate (I can definitely say this about San Francisco!). This means people are pushed to use apps like Uber and Lyft, where the average amount for a ride is $15-$20, even for distances under a mile.
- Healthcare expenses: Healthcare spending was $4.4 TRILLION in 2022 (or $13,500 per person). Compare this to INR 450 for an urban household in India. That’s $5.42 per person in India per year. Yeah…. you read that right. When I had to get a tooth extraction in America, it cost 15 more than it would have in India.
- Taxes: If you make $100,000 a year living in California, you will be taxed $29,959. So essentially you make about $70,000, or $5800 per month.
So, is a $100k/year salary enough to survive in the U.S.?
If you’re living in a big city have a health issue or live an expensive lifestyle, then $100,000 may be JUST enough for you to survive in the U.S.
Given everything, it’s a pretty modest salary.
On the other hand, if you live in a small city (like Arkansas), have no health issues, and live an extremely frugal lifestyle, then yes — $100,000 can be a lot and you’ll end up saving 30-40% of that.
Overall, the American dream does have rose-colored lenses, and I urge you to do your research before you move here.
…..
Please re-share this post so it helps more people thinking of moving here! 🙏
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This post was originally shared by Soundarya Balasubramani on Linkedin.