When choosing a job or a career path, you will consider numerous different factors, including your interests, abilities, strengths, degree and highest level of education completed (e.g. bachelor's degree, associate's degree, and so on), whether the particular job field is growing or declining, and many other details. Income
is, of course, another very important consideration for most people.
Is $50k a year considered a good salary? What are the factors that would determine if it is a good salary or not?
"The median weekly earnings for full-time workers were $854 in the fourth quarter of 2017, according to the Bureau of Labor Statistics
(BLS), which translates into an annual median salary of $44,408,” says Jill Gonzalez, an analyst at WalletHub. “As such, a $50,000 salary would be above the national median and a pretty good salary, of course, dependent on where one lives."
That's good news for people making an annual salary of $50,000 or higher. So, now that you know $50k is more than $5,000 higher than the national median salary in the United States, what are some other factors to consider when determining whether or not to accept a job offer—or simply gauging how well-compensated you are and how you are doing in your career?
1. Location and cost of living
Location, location, location. The cost of living varies dramatically from city to city, state to state, and even part of the country to another part of the country. So, ultimately, it does matter where you live. Many employers know that and will take your location and the location of the office into account when offering you a compensation package.
“For example, San Jose has the highest average starting salary at $65,292 (adjusted for the cost of living), while Brownsville has the lowest starting salary at $21,336,” Gonzalez explains. “When looking at salaries at the state level, Massachusetts takes first place with an average annual starting salary of $43,644, and Idaho has the lowest salary at $24,816,” she says.
The wages for a particular job can vary greatly depending on the city. For example, according to Diane Domeyer, executive director of The Creative Group, the midpoint starting salary for a graphic designer is $54,830 in Nashville, TN; $59,400 in Dallas, TX; $65,340 in Seattle, WA; $70,740 in Los Angeles, CA; and $75,870 in New York, NY. This is generally because the cost of living varies so greatly from area to area.
This variation isn't unique to a particular industry. According to the BLS, meeting, convention, and event planners earn an annual mean wage of $48,290, but they earn $47,030 in Denver, CO, and $72,120 in San Francisco, CA.
What cost of living variation means for you
Cost of living varies significantly throughout the country, so many of the discrepancies you will see for equivalent positions in different locations reflect that.
“Housing, transportation, and food are often the biggest expenses in your budget
,” according to Pamela Capalad, Certified Financial Planner and founder of financial planning business Brunch & Budget. “It is possible, for instance, to get by with a $50k salary in NYC, but you may have to share an apartment with roommates, live farther away from your job, and say no to certain social engagements.”
On the other hand, if you live in a town or city that costs less, Capalad says you would get far more for your money, and you would not have to limit yourself as much. “A $50k salary will go much further in less expensive cities and you'll likely have to make fewer compromises when it comes to housing, transportation, and food.”
Still, you should keep in mind what matters to you. There may be fewer opportunities or attractions in a more rural area, while the price of living in a bustling city may require you to cut back on other comforts. There are probably going to be pros and cons to whatever decisions you make, so it really comes down to your personal priorities and goals.
2. Total compensation package
Your total compensation includes much more than just your wages: There are also benefits to consider. That's why the total compensation package your employer offers you is another factor to consider carefully when gauging the quality of your salary (in this case $50,000 per year).
Some benefits to consider might include:
Health insurance is an expense with which employers can help significantly—and many do. The extent of the support they offer varies by the type, size, and other qualities of the employer.
According to a 2017 Kaiser report, in firms with a high number of low-wage employees, companies pay 77 percent of the premium costs for single coverage and 63 percent for families on average. However, the national average for employer contributions is 82 percent for single coverage and 72 percent for family coverage.
Health insurance is expensive, so if your employer is covering a large portion of your plan, the savings can really add up. Comparing the potential employer’s health plan to Kaiser’s data can help you determine how advantageous the particular company’s plan would be for you and your family.
Additional education or tuition assistance
Another benefit your employer might offer is tuition assistance for employees looking to further their education. If you plan on going back to school, tuition can be a significant expense.
However, EdAssist’s Annual Review of Employer Tuition Assistance Programs reveals that 60 percent of employers offer some sort of tuition assistance to workers. The average amount of employer awards is around $5,250 for undergraduate education and $8,000 for graduate school.
Retirement tools and planning
According to the National Institute on Retirement Security, the median retirement savings amount for Americans is just $3,000. Your employer might offer plenty of job perks that help with this and more.
For instance, if the employer offers a matching 401(k)—contributing as much as you do to your retirement savings up to a certain percentage of your paycheck—this can help increase the amount you are able to save for retirement and will benefit you in the long run.
3. The highest level of education completed
The highest level of education you have attained and the degree you have earned (high school diploma, bachelor's degree, master's degree, doctorate, and so on) is also a factor in determining what constitutes a good salary. Often, the more education you have, the higher you can expect your salary to be, although field and industry do play a factor; some fields may require a doctorate, for instance, while others may be satisfied with a bachelor's degree and do not vary salary for a given position based on the degrees you have attained.
“Based on information put forward by BLS in 2016 (the latest year with available data), workers with no high school diploma earned $504 a week ($26,280 per year),” explains Gonzalez. “Workers with at least a high school diploma earned median weekly salaries of $692 ($36,082), while bachelor's degree holders earned $1,156 per week ($60,277)," Gonzalez says.
Speirs agrees that the level of education you have attained would make a difference in many cases. “For example, if a master of accounting graduate was offered $50,000, I would raise an eyebrow,” she says.
However, Speirs also says that salary expectations should be based on what the market is paying for that position. Some positions in particular fields pay more than others. For example, according to the BLS, the median pay for accountants and auditors with a bachelor’s degree is $69,350. On the other hand, interpreters and translators with a bachelor’s degree earn a median pay of $47.190.
As we've discussed above, the nature of your industry plays a strong role in determining what you can expect your salary to be as well. The type of company for which you work also plays an enormous factor in what determines how good a given salary is. Companies can vary by size, and they can be corporate (for profit) or nonprofit.
For-profits vs. nonprofits
As a general rule, larger, for-profit companies tend to pay more than smaller nonprofits. “For instance, if this was a position as a manager at a small nonprofit in NYC, $50k is most likely the higher end of the average you'll see offers for—and in this case, $50k is a good salary,” Capalad says.
Here is another example: According to the BLS, public relations specialists earn a mean annual wage of $62,810. However, in the government-industry, they earn an average salary of $67,590. Educational services; state, local, and private, earn $59,360. In the software publishing industry, they earn more than $90,000. That means the salary for two people with the same title and similar job responsibilities in different industries can vary by — or even more than $40,000, depending on the position and the different industries you are considering.
Amount of job competition
Another industry-related factor to consider is the number of people in that sector who perform the same job. For instance, substance abuse and behavioral disorders counselors earn a mean annual wage of $47,66. However, those who work in business, professional, labor, political, and similar organizations earn $70,940 — but only 40 substance abuse and behavioral counselors work in these organizations! That means that in sectors in which your position is not well-represented, you and your skills could be in high demand—and you will be paid accordingly.
That is why Capalad believes it’s important to research average salaries for the type of position you're looking for. “There are also concessions to make on your end when it comes to accepting a salary that is lower than what you would be paid for in a similar job, depending on how much you like the company and the potential growth trajectory of the company and your role within it.”
Is $50k a good salary?: The bottom line
It is possible to get paid well for a job you hate and not be compensated as well as you'd like to be for a job you truly love. You just have to think about your priorities. For instance, some people relish the thought of living in New York City, so much so that they are willing to living a tiny, closet-sized apartment, while others would be miserable with this sort of lifestyle change.
Of course, if you have children or other family members that require assistance, you will need to factor in expenses related to their care when evaluating your compensation packages.
Consider, too, that your starting salary in an industry or company most likely isn't going to be your ending salary. Entry-level positions are at the lowest end of the salary scale, and as you grow in your role, receive promotions, and perform new responsibilities, you'll receive more compensation. So factor in how quickly people tend to get promoted and what the salary jumps tend to be at a prospective employer as well.
Making it work
Ultimately, in order to accurately assess how much money you need to cover your expenses—and what constitutes a good salary for you—it's a good idea to map everything out.
“One of the most important things professionals need to do when they're contemplating how much of a salary they need to live on is to create a budget,” says Brie Weiler Reynolds, senior career specialist at FlexJobs. “It doesn't have to be exact, but you should have a good idea of where your money goes every month. Without this, you’ll never know exactly what ‘enough to live on’ means for you.”
This article reflects the views of the author and not necessarily those of Fairygodboss.
Terri Williams is a business, higher ed, tech, and ethics journalist with bylines in The Economist, USA Today, Yahoo, Robert Half, U.S. News & World Report, About.com (dotdash) and Business.com. Follow her on Twitter: @Territoryone.
What’s your no. 1 piece of advice for learning what salary you need for your cost of living? Share your answer in the comments to help other Fairygodboss members!