Is $67,000 a Year Considered a Good Salary?

Is $67,000 a year considered a good salary? This question often arises for individuals evaluating their financial standing. A “good salary” is not a universally fixed amount; instead, it is a subjective determination influenced by a variety of personal circumstances and financial objectives. Understanding what makes a salary suitable involves looking beyond the numerical value to consider individual needs and aspirations.

Defining a Good Salary

The assessment of whether $67,000 constitutes a good salary is deeply personal, rooted in an individual’s unique financial landscape and lifestyle choices. Personal financial goals, such as saving for a significant down payment on a home, aggressively paying down student loan debt, or building substantial investment portfolios, directly impact this perception. A salary might be considered good if it allows for consistent progress toward these specific targets.

Beyond financial objectives, lifestyle expectations play a significant role in defining salary adequacy. Desired spending on activities like travel, dining out, or pursuing hobbies can quickly consume a larger portion of income, making a seemingly good salary feel less substantial. The presence of dependents, whether children or elderly family members, introduces additional financial responsibilities, including education, healthcare, and daily living expenses, which can significantly alter the sufficiency of a $67,000 income. An income that comfortably covers these essential and desired expenditures, while allowing for savings, often aligns with the definition of a good salary for an individual.

Benchmarking Your Salary

Comparing a $67,000 salary to broader economic data provides an objective perspective on its general standing. In the United States, a $67,000 salary generally places an individual above the median individual income, which was around $50,200 in 2024, and below the average individual income of $73,471.51. For context, the median household income was $80,020.00 in 2024.

The purchasing power of $67,000, however, varies significantly based on geographic location due to the cost of living. A cost of living index uses a baseline of 100 for the national average, with higher numbers indicating a more expensive area. For instance, living in a high-cost area like Hawaii, with an index of 193.3, means expenses are nearly double the national average, making $67,000 feel much less substantial. Conversely, in a lower-cost area such as Mississippi, with an index of 83.3, the same salary would afford a significantly higher quality of life. Housing, transportation, and groceries are major components of this variation.

Industry-specific salary ranges also influence how a $67,000 income is perceived. Some professions naturally command higher salaries, making $67,000 a modest income within those fields, while it could be considered quite strong in others, especially for entry-level or early-career positions.

Budgeting and Financial Management

Effective financial management is crucial for making a $67,000 salary work efficiently, starting with a clear understanding of net pay versus gross pay. Gross pay is the total earnings before any deductions, while net pay is the amount received after these deductions. Standard deductions from gross pay include federal income tax, state income tax (if applicable), and FICA taxes, which cover Social Security and Medicare. For 2024, the FICA tax rate for employees is 7.65%.

Creating a realistic budget is a subsequent and essential step, involving categorizing expenses into fixed and variable costs. Fixed expenses typically include rent or mortgage payments, loan installments, and insurance premiums, which remain consistent each month. Variable expenses, such as groceries, utilities, and entertainment, fluctuate and require careful tracking to prevent overspending. A common budgeting guideline is the 50/30/20 rule, allocating 50% of after-tax income to needs, 30% to wants, and 20% to savings and debt repayment.

Establishing an emergency fund, ideally covering three to six months of living expenses, provides a financial safety net against unforeseen circumstances. Prioritizing the repayment of high-interest debt, such as credit card balances, minimizes interest accrual and frees up more income for other financial goals.

Long-Term Financial Planning

Leveraging a $67,000 salary for long-term financial security involves strategic planning beyond immediate budgeting. Saving for retirement is a primary objective, and various tax-advantaged accounts facilitate this. A 401(k) plan, often offered through employers, allows pre-tax or Roth contributions, reducing current taxable income or providing tax-free withdrawals in retirement, respectively. For 2024, the employee contribution limit for 401(k)s is $23,000, with an additional $7,500 catch-up contribution for those age 50 and over.

Individual Retirement Arrangements (IRAs), including traditional and Roth options, offer similar tax benefits. The annual contribution limit for IRAs in 2024 is $7,000, with an additional $1,000 catch-up contribution for individuals aged 50 and older. Beyond retirement, saving for significant life events, such as a home down payment or a child’s education, requires dedicated savings accounts and consistent contributions. Investing these savings, often through low-cost index funds or diversified portfolios, allows for potential growth over time, harnessing the power of compounding. Regularly reviewing financial health, including assessing progress toward goals and adjusting investment strategies as needed, is a continuous process that supports long-term financial well-being.