Four-person households in US need annual income of $275,000 to live comfortably

By Minh Hieu   May 1, 2024 | 07:55 pm PT
Four-person households in US need annual income of $275,000 to live comfortably
A view of Boston, Massachusetts, in the U.S. Photo by Unsplash
The median annual income that a working couple with two kids need to maintain a comfortable lifestyle can top $275,000 in the most expensive U.S. states, a new study found.

This figure can soar to as high as $301,184 in Massachusetts, CNBC reported, citing a new study by financial technology firm SmartAsset.

Apart from Massachusetts, Hawaii ($294,611), Connecticut ($279,885), New York ($278,970), and California ($276,723) round out the top five most expensive states for nuclear families.

Conversely, Mississippi stands out as the most affordable state for raising children, with an annual income requirement of $177,798.

Nationwide, the median income necessary for a family of four to live comfortably is $213,782 per year.

The term "comfortably" is defined in the study as the ability to maintain a 50/30/20 budget, allocating 50% of earnings to necessities like food and housing, 30% to discretionary items, and 20% to savings or debt repayment.

Rural areas in the U.S. typically boast lower living costs, particularly in housing, when compared to states with bustling urban centers like California and New York.

However, median income in rural states is generally lower than in more urban ones.

For instance, the median annual income for full-time workers in Mississippi is $37,500, which is nearly 52% lower than the $56,840 reported in New York.

Higher wages in urban states can help offset some of the additional living expenses.

Raising children in the U.S. has grown 41.5% more expensive over the last eight years, according to Business Insider.

The main drivers of this growth are food, transportation, and childcare expenses, which have surged by 45%, 312%, and 17%, respectively, from 2016 to 2023.

This year, the minimum cost to care for a child, including rent, food, apparel, transportation, childcare, and health insurance premiums, is estimated to be $25,714 a year.

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