SoFi

Inflation’s effects have been especially obvious over the past couple of years, thanks to the soaring prices of groceries, gas, rent, and childcare. But even when inflation is low, it can have an impact on your finances.

“Inflation” means the same amount of money will pay for less in the future, and that change can happen quickly or slowly. Either way, unless your pay raises are keeping pace with the rising cost of living, you can expect your purchasing power to erode. To compensate, you may have to downsize your lifestyle or your long-term goals.

A salary inflation calculator is a specialized tool that can help you understand the impact inflation has on your paycheck, from year to year or over decades. Read on for more information on historic and current inflation rates, how to use an inflation calculator to assess your salary, and how to plan for what’s next.

What Is a Salary Inflation Calculator?

A salary inflation calculator can be used to illustrate the effect inflation has on your hard-earned money. It shows you how much buying power your salary (if unchanged) gained or lost from one year to the next. Or you can use it to gauge how well your salary has held up over a period of several years.

For example, you can enter how much you made in December 2021, and calculate how much more that salary would have to be in December 2022 to maintain the same purchasing power. (Although you might not want to know.) Or you can spread the dates out further, from 2012 to 2022.

There are several different versions of salary inflation calculators online. The U.S. Bureau of Labor Statistics (BLS) provides one that’s both reliable and easy to use at https://www.bls.gov/data/inflation_calculator.htm.

Recommended: Free Credit Score Monitoring

Historical Inflation Rates, Compared

To make its inflation calculations, the BLS uses the Consumer Price Index, which measures the overall change in consumer prices based on a representative basket of goods and services over time. The BLS began collecting spending data in 1917, and with a few tweaks over the years to update its process, continues to do so today.

The table below shows the annual rate of inflation from 1920 to present. The first column notes the year the data was collected; the second column represents the Consumer Price Index for All Urban Consumers (CPI-U) for that year; and the third column shows the annual percent change/annual rate of inflation.

Recommended: Salary vs. Hourly Pay

How to Calculate Salary Adjusted for Inflation

Probably the easiest way to calculate your income’s buying power adjusted for inflation is to use an online inflation calculator. Simply enter the starting year of your choice, your salary in that year (before or after taxes), and the current year. Then the calculator will do the math for you.

For example, if you made $60,000 in December 2018 and you want to see the inflation-adjusted equivalent for December 2022, just plug in those numbers. The calculator will tell you the inflation-adjusted amount is $70,881.69.

What does that mean for you? In a perfect world, companies help valued employees combat inflation with appropriate annual pay increases. If you haven’t had a pay bump since 2018 and you’re ready to talk to your employer about a raise, you might mention that $70,881.69 is the minimum it would take to keep up with the increased cost of living. And if you’re in a field where employers are offering competitive pay and benefits to attract good candidates, you might be able to negotiate for even more.

What Is Inflation and How Does It Work?

Inflation occurs when the cost of goods and services increases — not in just one or two categories, but across the economy — and consumers’ buying power decreases. As a result, it becomes necessary to earn more just to maintain the same standard of living.

A mild to moderate inflation rate is considered healthy for the economy. It can encourage consumers to buy now rather than later if they expect prices could go higher. Factories may produce more to meet demand from stores that are selling more. Hiring and wages tend to go up. And more people may be motivated to invest their money to grow it for the future.

The Federal Reserve’s target inflation rate is 2% over the long term, and the U.S. hadn’t strayed far from that so-called “sweet spot” for decades — until recently. A number of factors can cause inflation to increase to an uncomfortable level, and thanks to a pandemic-related perfect storm (supply chain issues, stimulus payments, soaring gas prices, and an employment rollercoaster), that’s where we are now.

Still, the U.S. economy isn’t anywhere close to hyperinflation, when prices rise uncontrollably, typically at rates of more than 50% per month.

How Is Inflation Calculated?

The BLS and the Bureau of Economic Analysis (BEA) both track inflation, and use similar methods and formulas. But because the data they use comes from different sources, their results aren’t the same.

•   The BLS calculates Consumer Price Index (CPI) inflation by tracking what Americans are actually buying. The government uses the CPI to make inflation-related adjustments to certain federal benefits, such as Social Security.

•   The BEA calculates Personal Consumption Expenditure (PCE) inflation using information reported by the companies that sell goods and services instead of the consumers who purchase them. The Federal Reserve focuses more on PCE inflation, but also considers other economic data when setting monetary policy.

Recommended: Should I Sell My House Now or Wait?

How Inflation Impacts You

High inflation can have an immediate impact on your budgeting and spending, and no one likes that much. But your feelings about whether inflation is good or bad may depend on where you are in life and how your overall finances are affected.

•   If you’re a first-time homebuyer, for example, higher prices and rising mortgage rates could be pushing your dream out of reach.

•   People with high credit card debt can be negatively affected by inflation. As the Federal Reserve continues to raise the federal funds rate in an effort to cool the economy, borrowers can expect the annual percentage rate (APR) on their revolving credit to increase.

•   Savers, on the other hand, may benefit as financial institutions slowly begin offering a higher annual percentage yield (APY) on savings accounts, money market accounts, and certificates of deposit.

•   That may sound like especially good news to risk-averse retirees looking for a safe investment. But retirees on a fixed income are typically among the first to feel the painful squeeze of inflation.

•   So are small business owners, who often have to deal with higher costs for goods and services, employees who want cost-of-living increases, and customers who aren’t happy when their prices go up to cover those expenses.

•   Homeowners may not like the high prices they encounter when shopping for goods and services. But on the plus side, inflation may be pushing up the value of their home and their home equity. And if they have a fixed-rate mortgage, they may find some comfort in knowing they’re paying less for that loan than they did when they took it out.

Recommended: Does Net Worth Include Home Equity?

The Takeaway

Using a salary inflation calculator can help consumers understand how the rising cost of living might affect their finances. If paychecks can’t keep up with the cost of living, they might have to downsize, adjust their plans, or practice financial minimalism for a while.

Inflation can be calculated in different ways, depending on the organization and its purpose. For instance, the Bureau of Labor Statistics (BLS) measures inflation by the Consumer Price Index (CPI), which tracks household purchases. The information is used to make adjustments to federal benefits such as Social Security.

If inflation is affecting your bottom line, SoFi’s money tracker app can help you get a better handle on your budget. Set up spending categories, track your money, and monitor your credit score. All in one place, and at no cost.

FAQ

What will $100,000 be worth in 10 years with inflation?

It’s difficult to predict what $100,000 could be worth 10 years from now without knowing what inflation will look like in the future. But let’s say the average inflation rate levels out to a moderate 3% over the next decade. If that’s the case, it will take about $134,392 in 2033 to have the same buying power as $100,000 has in 2023.

How much would $50,000 in December 2018 be worth in December 2022 with inflation?

If you had $50,000 in December 2018, it would take about $59,068 to have the same purchasing power in December 2022.

What is $120,000 in 2000 worth today?

If you made $120,000 in 2000, you’d have to make $204,688 to have the same buying power today.

Photo credit: iStock/Prostock-Studio

SoFi Relay offers users the ability to connect both SoFi accounts and external accounts using Plaid, Inc.’s service. When you use the service to connect an account, you authorize SoFi to obtain account information from any external accounts as set forth in SoFi’s Terms of Use. Based on your consent SoFi will also automatically provide some financial data received from the credit bureau for your visibility, without the need of you connecting additional accounts. SoFi assumes no responsibility for the timeliness, accuracy, deletion, non-delivery or failure to store any user data, loss of user data, communications, or personalization settings. You shall confirm the accuracy of Plaid data through sources independent of SoFi. The credit score is a VantageScore® based on TransUnion® (the “Processing Agent”) data.

*Terms and conditions apply. This offer is only available to new SoFi users without existing SoFi accounts. It is non-transferable. One offer per person. To receive the rewards points offer, you must successfully complete setting up Credit Score Monitoring. Rewards points may only be redeemed towards active SoFi accounts, such as your SoFi Checking or Savings account, subject to program terms that may be found here: SoFi Member Rewards Terms and Conditions. SoFi reserves the right to modify or discontinue this offer at any time without notice.

Non affiliation: SoFi isn’t affiliated with any of the companies highlighted in this article.

Financial Tips & Strategies: The tips provided on this website are of a general nature and do not take into account your specific objectives, financial situation, and needs. You should always consider their appropriateness given your own circumstances.

SORL0123001

Since 2020, work-from-home opportunities have become easier to find. While it can take some adjustments on both sides, working from home has significant benefits for employees and employers.

Read on to learn some of the advantages of work-from-home roles, as well as how to find these jobs.

What Are the Benefits of Remote Work for Employees?

While no two jobs are exactly alike, you can generally expect these benefits in working from home.

•   Workday flexibility. Depending on company policy, you may be less tied to your desk while working from home during the day. That could give employees the time to attend to housekeeping chores or to take a walk between meetings and tasks. Similarly, employees may be able to start their workday earlier or later based on preference.

•   No commute. With no commute to or from the office, employees who work from home free up time during the day. They may also save money on public transport or gas and car maintenance.

•   Fewer interruptions. With no water cooler to gather around or coworkers to people-watch, working from home often has fewer social interruptions than a traditional office setting.

•   Less formality. The work-from-home dress code is usually less formal than the office. Not only are employees more comfortable during the day, they can save on wardrobe costs.

•   Location. Many work-from-home employees have the luxury of choosing where they work geographically — though they may still be required to work hours that align with their employer’s time zone.

Compared with a traditional office job, working from home can take some getting used to, but many employees feel that it’s worth it.

Recommended: Free Credit Score Monitoring

Examples of Remote Work Benefits for Employees

The benefits of working from home for employees are far ranging and vary by role and company. But the examples below help explain why remote work is appealing to many office workers.

Saving Money

People who work from home save money on things like lunches out and an office wardrobe. Employees who can prepare meals in their own kitchen are less likely to rely on takeout. Similarly, employees save money without a commute, whether that means reduced trips to the gas station or fewer public transit passes.

Setting up a home office can involve new expenses, but if workers are smart about managing their work-from-home budget, they usually come out ahead.

A spending app can quickly show you how much money you’d save by working from home.

Recommended: Does Net Worth Include Home Equity?

Saving Time

Office distractions can challenge productivity. Working from home can have its share of distractions as well — including chores, children, and pets. (Some parents with flexible work-from-home jobs may long for their relatively peaceful days in the office.) But for the most part, employees tend to be more productive when they work from home.

At home, you’re unlikely to fall into conversations on a journey from your desk to the bathroom, and less likely to be interrupted when you’re focused on a task.

Recommended: Best Self-Employed Jobs for Parents

Saving Sanity

While it can be harder to quantify, employees who work from home may feel less stressed during the workday. This can be attributed to everything from setting up an optimal home office to avoiding a stressful commute.

Reducing workplace stressors can benefit productivity, job satisfaction, and employee engagement.

Recommended: 31 Part-Time Remote Jobs with Flexible Hours

What Are the Benefits of Remote Work for Employers?

At first glance, it may feel like remote work is largely more beneficial to the employee than the employer. However, that’s not necessarily the case. The employer benefits are motivating many companies to prepare for a more remote workforce.

•   Lower operational costs. Employers save money when they’re not leasing and maintaining an office space. They may also be able to save on things like office equipment and employee benefits.

•   Flexible budgets. When a company can hire from anywhere across the country or globe, it may be able to acquire talent at a more affordable rate.

•   Higher productivity. Productive employees lead to a better bottom line for employers.

•   Less absenteeism. When everyone is working remotely, there’s less likelihood of an office bug that sends half the employees home, reducing sick days.

•   Higher retention. Employees who are happy with the remote office policies are more likely to stay with the company. Improved retention rates can save a company significant resources over the long run.

Recommended: Should I Sell My House Now or Wait?

Examples of Remote Work Benefits for Employers

Employees have more autonomy in a remote culture, but worker satisfaction ultimately benefits employers as well.

Better for the Bottom Line

When a team is fully remote, a company saves money and resources on office space, utilities, maintenance, furniture, and benefits like catered lunches and new equipment.

Remote work also frees office managers and similar roles to focus on things like company culture and worker satisfaction instead of sourcing new carpets and real estate.

Better for the Talent Pool

When geography isn’t an issue, employers can access a much wider talent pool. If a company seeks highly specific roles or qualifications, a national or even international search can yield much better applicants than one limited to a single area.

Remote work can broaden the talent pool in another way. Many qualified candidates cannot spend long hours in an office on a regular basis, either because they have a physical disability or they care for a child or aging parent who needs supervision. Also, retirees who want to bring in some additional income may feel more comfortable in a work-from-home job.

Better for Boosting Satisfaction

Satisfaction may be less noticeable than savings on rent or getting better applicants for an open job. Still, when employees are happy in their roles, it generally leads to less turnover, higher productivity, and a more positive work environment.

When teams are engaged and happy, they’ll do better work, saving the company time and money. Plus, less time is wasted on hiring and training new employees, so employers can focus on growth and building a stronger company culture.

How to Find Remote Job Opportunities

If the benefits of remote work make it sound like a good fit for you, here are some ways to “try before you buy.”

•   Consider getting a second job you can devote time to at home after hours.

•   Negotiate with your current company to work from home one day a week for a set period — for instance, Fridays during the summer.

•   Reach out to friends who work from home for their take on what it’s really like (and maybe a referral!).

•   Not all work-from-home jobs are tied to a corporate office. Start your own business inspired by your skills and passions.

The Takeaway

With remote work becoming more common, it’s worth learning about the benefits for employers and employees. Working from home can reduce stress, boost productivity, and even save employees money. For employers, remote work can help their bottom line by reducing office costs and increasing employee retention.

Wondering how much cash you’d save without a commute and daily lunches out? SoFi’s money tracker app allows you to monitor all your accounts in one mobile dashboard.

FAQ

What are the benefits of working from home for employees?

Most of the benefits of working from home for employees have to do with autonomy. Work-from-home employees get to choose where they work, how they work, when they work, and even their dress code.

What are five advantages of working from home?

Five advantages of working from home include workday flexibility, saving time and money, boosted productivity, location flexibility, and setting your own hours.

What is the biggest advantage of working from home?

For most employees, the two biggest advantages of working from home are saving time and money. Employees save time by not commuting to and from work or chatting with coworkers. Similarly, they’ll probably save money in the long run by avoiding lunches out and spending less on workplace attire.

Photo credit: iStock/miniseries

SoFi Relay offers users the ability to connect both SoFi accounts and external accounts using Plaid, Inc.’s service. When you use the service to connect an account, you authorize SoFi to obtain account information from any external accounts as set forth in SoFi’s Terms of Use. Based on your consent SoFi will also automatically provide some financial data received from the credit bureau for your visibility, without the need of you connecting additional accounts. SoFi assumes no responsibility for the timeliness, accuracy, deletion, non-delivery or failure to store any user data, loss of user data, communications, or personalization settings. You shall confirm the accuracy of Plaid data through sources independent of SoFi. The credit score is a VantageScore® based on TransUnion® (the “Processing Agent”) data.

*Terms and conditions apply. This offer is only available to new SoFi users without existing SoFi accounts. It is non-transferable. One offer per person. To receive the rewards points offer, you must successfully complete setting up Credit Score Monitoring. Rewards points may only be redeemed towards active SoFi accounts, such as your SoFi Checking or Savings account, subject to program terms that may be found here: SoFi Member Rewards Terms and Conditions. SoFi reserves the right to modify or discontinue this offer at any time without notice.

Non affiliation: SoFi isn’t affiliated with any of the companies highlighted in this article.

Financial Tips & Strategies: The tips provided on this website are of a general nature and do not take into account your specific objectives, financial situation, and needs. You should always consider their appropriateness given your own circumstances.

SORL0223003

Age plays a major role in how much money people make. This is simply because as we get older, we gain career experience and bring more value to companies. But when are a worker’s “peak earning years,” and what happens after they’re past?

Keep reading for insight into the average income by age in the United States.

Average Salary by Age in the US

Your education, industry, work experience, negotiation skills, and plain luck can all influence how much money you make. To get an idea of whether you’re earning a competitive salary, it can be helpful to know how much other people in the same age group are making.

Let’s take a closer look at the average income by age in the U.S., according to the Bureau of Labor Statistics.

Average Salary for Ages 16-19

The early days of your working life usually aren’t the most lucrative: 16 to 19 year olds who work full-time make $32,396 a year on average.

Average Salary for Ages 20-24

Salaries start to rise as workers gain experience. Those in the 20 to 24 age group make an average annual salary of $38,324.

This is when many financially savvy professionals start building their 401(k) balance. That’s because the earlier you invest for retirement, the less money you’ll typically have to invest over time. Or, as the saying goes, your time in the market is more important than marketing timing.

Recommended: Average Savings by Age

Average Salary for Ages 25-34

We start to see a big increase in salary once workers reach the 25 to 34 age group, with the average annual income hitting $52,832.

Ideally, employees will put much of their raises and bonuses toward savings rather than impulse spending.

Average Salary for Ages 35-44

For 35 to 44 year olds, their annual salary is still growing: $62,608 on average. This is the beginning of what’s commonly referred to as “peak earning years.”

Average Salary for Ages 45-54

While many employees enjoy higher wages into their 50s, others find their salary stagnating. Overall, workers in the 45 to 54 age group actually see salaries drop a little, though only by $208. The average annual income in middle age is $62,400.

Recommended: Financial Tips for People in Their 40s

Average Salary for Ages 55-64

Salaries really drop for workers between 55 and 64, whose average annual salary is $61,204. What happened to paying for experience? Some companies may believe they can pay younger employees less for the same work, and see older workers as overpaid. As a result, 55+ workers are no longer offered the same retention incentives — such as pay raises — regardless of performance.

On the other hand, professionals who are satisfied with their retirement savings may choose to work less or retire early instead of waiting until the average retirement age.

Average Salary for Ages 65 and Older

Once workers reach 65, they are likely shifting to part-time work to stay active during retirement and to earn a little extra retirement income. Some people need more retirement income than others, and Social Security benefits and savings aren’t always enough. Which may be why we see salaries drop to an average of $54,444 per year for those 65 or older.

Tips for Maximizing Your Salary

Now that we’ve shed some light on the average income by age in the U.S., let’s address some ways workers can maximize their salary. That can mean finding ways to hold on to what you’re earning or to make it grow.

Create a Budget

If you’ve ever created a spending budget, you know how shocking it can be to see all the ways we fritter away our hard-earned salary on unnecessary purchases. By cutting back on items you don’t really need — from bottled water to forgotten subscriptions — you’ll free up more cash for things like saving and investing.

Pay Down Debt

What’s even more shocking than the amount you spend on little things like daily snacks and late-night Ubers? The interest charges and fees that come with debt. The faster you pay off high-interest credit cards, the more you can put toward longer term goals: an emergency fund, travel, or buying a home.

Make Saving Automatic

One easy way to make saving and investing a priority is to automate it: Set up regular, recurring transfers from your paycheck or checking account. That way, big goals like a dream wedding and retirement are prioritized before there’s even a chance to spend that money.

Take Advantage of Tax Deductions and Credits

Taxes may be an unavoidable part of life, but there are ways to pay less to Uncle Sam. Whether you hire a tax accountant or use software to file your return, look for opportunities to snag a larger tax refund.

Invest Your Savings

One way to make savings grow is to open a brokerage account and invest money in the stock market. Start small while you learn the ropes. While investing comes with risk (and more taxes), it’s a means of making your money work for you.

Recommended: Investing 101 Guide

Make Retirement Contributions

Contributing to a retirement savings account is a convenient way to save and invest in one fell swoop. As an added benefit, some employers match a portion of employee contributions. That means if someone isn’t contributing to their employer sponsored 401(k) plan, they’re leaving free money on the table. that helps expand an employee’s net worth.

Open a High-Yield Savings Account

A low-risk way to earn money on savings is by opening a high-yield savings account. This type of savings account tends to offer a higher interest rate than normal savings accounts.

The Takeaway

The average income by age in the U.S. tends to rise as workers gain more experience. Eventually salaries plateau and then drop off. Your peak earning years coincide with middle age, meaning you make the most you ever will in your 40s and 50s. The average salary in the U.S. tops out at $62,608 for ages 35-44.

Employees work hard for the money they earn, and they deserve for their money to work hard for them. This is where SoFi can help. With SoFi, users can track all of their money in one place, set savings goals, review spending breakdowns, and keep an eye on their credit score — free of cost.

FAQ

What does the average 30 year old make?

On a weekly basis the average 30 to 34 year old makes $1,016, or $52,832 per year. Workers in their mid to late thirties can expect to earn more: $1,204 per week, or $62,608 a year.

What percentage of Americans earns over $100,000 a year?

Most Americans earn less than $100,000 per year. Just 9% of Americans earn a six-figure salary, so workers shouldn’t feel bad if they earn less than $100,000.

What salary is middle class?

The salary that places you in the middle class varies depending on where you live and the cost of living there. According to one Pew Research study, the median middle-class household (not individual) makes $90,131. However, if you can afford to pay your bills and have money left over for savings and modest indulgences, you’re likely middle class.

Photo credit: iStock/Prostock-Studio

SoFi Relay offers users the ability to connect both SoFi accounts and external accounts using Plaid, Inc.’s service. When you use the service to connect an account, you authorize SoFi to obtain account information from any external accounts as set forth in SoFi’s Terms of Use. Based on your consent SoFi will also automatically provide some financial data received from the credit bureau for your visibility, without the need of you connecting additional accounts. SoFi assumes no responsibility for the timeliness, accuracy, deletion, non-delivery or failure to store any user data, loss of user data, communications, or personalization settings. You shall confirm the accuracy of Plaid data through sources independent of SoFi. The credit score is a VantageScore® based on TransUnion® (the “Processing Agent”) data.

*Terms and conditions apply. This offer is only available to new SoFi users without existing SoFi accounts. It is non-transferable. One offer per person. To receive the rewards points offer, you must successfully complete setting up Credit Score Monitoring. Rewards points may only be redeemed towards active SoFi accounts, such as your SoFi Checking or Savings account, subject to program terms that may be found here: SoFi Member Rewards Terms and Conditions. SoFi reserves the right to modify or discontinue this offer at any time without notice.

Non affiliation: SoFi isn’t affiliated with any of the companies highlighted in this article.

Third-Party Brand Mentions: No brands, products, or companies mentioned are affiliated with SoFi, nor do they endorse or sponsor this article. Third-party trademarks referenced herein are property of their respective owners.

Tax Information: This article provides general background information only and is not intended to serve as legal or tax advice or as a substitute for legal counsel. You should consult your own attorney and/or tax advisor if you have a question requiring legal or tax advice.

Financial Tips & Strategies: The tips provided on this website are of a general nature and do not take into account your specific objectives, financial situation, and needs. You should always consider their appropriateness given your own circumstances.

SORL0223002

As student debt reaches an all-time high and automation is shaking up many industries, more and more people are turning to the trades. With the benefit of less education debt, and a lower likelihood of replacement by machines, a job in the trades holds out hope for a steady salary and job security.

But what’s the average pay, and how does it vary state by state? Read on to find out more about the advantages and disadvantages of trade jobs.

What Is a Trade Job?

A trade job is typically a hands-on role that doesn’t require a college degree. Instead, tradespeople gain experience in a specialty program or through training on the job.

Many think of a trade job in terms of plumbing or construction, but trade jobs also encompass roles such as pilot and real estate broker.

Recommended: Why Raise the Minimum Wage?

Pros and Cons of a Trade Job

Like any job, working in a trade comes with a fair share of benefits and drawbacks.

Pros include:

•   Cost of education. Since most trades don’t require a four-year degree, tradespeople may be less likely to take on student loan debt before beginning their career.

•   Security. Trades require special knowledge and experience, and are less likely to be automated. The skilled labor required for many trades jobs promises security down the line.

Cons of a trade job are:

•   Physical toll. Many, but not all, trades jobs require strength and mobility, which can take a toll over time. Trade jobs often require employees to be out in the field, as opposed to working from home. Demanding construction or maintenance jobs can lead to injury and discomfort if you aren’t careful.

•   Safety. Some trades jobs are more dangerous than others. Mistakes on the job can lead to serious bodily trauma.

Recommended: Free Credit Score Monitoring

Average Salary for Trade Jobs by State

Trade jobs span multiple industries and skill sets, which lead to a wide variation in average pay. Some may be salaried, while others are hourly, and each will have different demands. Here is the average salary for trade jobs by state, courtesy of Zip Recruiter.

Recommended: More High Paying Jobs by State

10 Top High Paying Trade Jobs

Trade jobs usually don’t require a four-year degree, but many can net a coveted $100,000 salary. Here are the top 10 highest paying trade jobs by median annual salary, according to the Bureau of Labor Statistics (BLS):

1. Transportation, Storage, and Distribution Managers

Median Annual Salary: $105,580

Job Growth Outlook (10-year): 3.52%

Job Description: Coordinate the shipping, storage, and transportation of materials based on business or government regulation. According to the BLS, this is the trade that makes the most money.

Education Requirements: High school diploma

2. Nuclear Power Reactor Operator

Median Annual Salary: $104,260

Job Growth Outlook (10-year): -26.8%

Job Description: Operate and monitor nuclear power systems.

Education Requirements: High school diploma

3. Elevator Mechanic

Median Annual Salary: $97,860

Job Growth Outlook (10-year): 2.9%

Job Description: Install, maintain, and repair elevator and escalator systems.

Education Requirements: High school diploma

4. Radiation Therapist

Median Annual Salary: $82,790

Job Growth Outlook (2020-2030): 6.3%

Job Description: Monitor and distribute radiation therapy to patients with cancer or other diseases. Because of frequent interaction with patients, this is not a job for antisocial people.

Education Requirements: Associate degree

5. Subway and Streetcar Operator

Median Annual Salary: $81,180

Job Growth Outlook (10-year): 3.5%

Job Description: Drive public transport systems including street cars and subway lines. Roles can include handling cash fares. Because these roles don’t come with many physical demands, they could be a good option for steady work after retirement.

Education Requirements: High school diploma

6. Nuclear Medicine Technologist

Median Annual Salary: $78,760

Job Growth Outlook (10-year): 1.7%

Job Description: Provide radiation imaging or treatment to patients. This is one of a handful of high-paying medical jobs that don’t require a four-year degree, much less medical school

Education Requirements: Associate degree

7. Gas Plant Operator

Median Annual Salary: $77,850

Job Growth Outlook (10-year): -9%

Job Description: Control pipelines and distribution of gas from utility companies.

Education Requirements: High school diploma

8. Dental Hygienist

Median Annual Salary: $77,810

Job Growth Outlook (10-year): 8.9%

Job Description: Examine dental patients and administer oral hygiene, including routine cleanings.

Education Requirements: Associate degree

9. Diagnostic Medical Sonographer, Cardiovascular Technologist and Technician

Median Annual Salary: $75,380

Job Growth Outlook (10-year): 10%

Job Description: Operate medical equipment to create images or complete medical testing.

Education Requirements: Associate degree

Recommended: What Is a Good Entry-Level Salary?

10. Electrical Line Installer and Repairer

Median Annual Salary: $78,310

Job Growth Outlook (10-year): 3.2%

Job Description: Install, maintain, and repair electrical systems, including poles, as well as transmission towers.

Education Requirements: High school diploma

Recommended: Budget Planner and Spending App

The Takeaway

Landing a job with a competitive salary doesn’t necessarily require a college degree. Though the average pay for trade jobs will vary by role and location, they can lead to rewarding careers with good job security. The ten highest paying trade jobs are in a range of industries, from medicine to transportation to nuclear power.

Want to keep more money in your pocket? Check out SoFi. Our money tracker app allows you to monitor your spending, upcoming bills, budgets, and more. And it’s free.

FAQ

What is the highest-paying trade job?

The highest-paying trade job is a power plant operator, with an average annual salary of $103,000. This shift work requires operators to monitor the status of power plants, ensuring everything runs smoothly. This role typically requires a high school diploma, certification, and on-the-job training.

What are the easiest high paying trades?

The easiest high paying trade will vary based on an individual’s strengths. But some trade jobs have a lower barrier to entry than others. That, coupled with a high predicted job growth rate, could make them easier roles to be hired into.

The field of ultrasound technology is in demand, with a predicted 19% growth rate in the next decade. Paying $62,500 annually on average, the role requires a certificate and training, but not a bachelor’s degree.

Which trade is in highest demand?

Solar energy installation is growing rapidly, and installers need only technical training to qualify. The role pays $37,000 on average a year, and the demand is expected to explode by over 50% in the next ten years. Because the job entails working with machinery alone or with a small crew, this could also be an attractive job for introverts — as long as they have no fear of heights.

Photo credit: iStock/Portra

SoFi Relay offers users the ability to connect both SoFi accounts and external accounts using Plaid, Inc.’s service. When you use the service to connect an account, you authorize SoFi to obtain account information from any external accounts as set forth in SoFi’s Terms of Use. Based on your consent SoFi will also automatically provide some financial data received from the credit bureau for your visibility, without the need of you connecting additional accounts. SoFi assumes no responsibility for the timeliness, accuracy, deletion, non-delivery or failure to store any user data, loss of user data, communications, or personalization settings. You shall confirm the accuracy of Plaid data through sources independent of SoFi. The credit score is a VantageScore® based on TransUnion® (the “Processing Agent”) data.

*Terms and conditions apply. This offer is only available to new SoFi users without existing SoFi accounts. It is non-transferable. One offer per person. To receive the rewards points offer, you must successfully complete setting up Credit Score Monitoring. Rewards points may only be redeemed towards active SoFi accounts, such as your SoFi Checking or Savings account, subject to program terms that may be found here: SoFi Member Rewards Terms and Conditions. SoFi reserves the right to modify or discontinue this offer at any time without notice.

SORL0123002

When setting income goals, some people use a six-figure salary as a benchmark. But what does it represent exactly? And how do six-figure earners get to that level?

We’ll dig into the legend surrounding the six-figure salary, and whether you need one to build wealth.

How Much Is a Six Figure Salary?

“Six figures” simply refers to a number with six digits. Typically used with money, the term covers amounts from $100,000 to $999,999. (Once you hit 1 million, you’re in seven-figure territory.) Someone with a six-figure salary makes at least $100K.

Recommended: Free Credit Score Monitoring

How to Make Six Figures

There is no one right way to earn six figures. That said, there are strategies that can better position you for this level of income. Getting a good education, while not absolutely necessary, is a solid foundation for the kinds of jobs that pay in the six-figure range. Another path is to start your own business.

The Bureau of Labor Statistics (BLS) lists 159 occupations with median salaries of at least $80,000. The degrees required for these jobs range from a high school diploma to a doctoral degree.

It’s important to recognize that certain careers just pay more than others. Once you’ve chosen a high paying field, you can determine the type of education and training you’ll need to pursue.

You’ll also want to learn how to manage and grow your money. A good place to start is by tracking your expenses and savings with a free spending app.

Recommended: Should I Sell My House Now or Wait?

Average Age to Make Six Figures in the US

According to the U.S Census Bureau, about 15% of households earn between $100,000 and $149,000. Another 8% earn between $150,000 and $199,000. And 10% earn $200,000 or more. Note that this is household income, not individual. Compare those figures to the national average salary of $60,575.

Some workers begin earning six figures in their twenties and thirties. Economists nickname them HENRYs, for “high earners, not rich yet.” But for most people, their “peak earning years” are from age 35 to 54. The majority of people who make six figures will do so in their 30s.

Keep in mind that annual income says nothing about someone’s financial health. An individual making $50K who manages their money well can be in a better place financially than someone making six figures.

Recommended: What Is a Good Entry-Level Salary?

Examples of Jobs That Pay Six Figures

A look at the highest paying jobs by state offers insight into these types of careers. All these jobs make at least $200,000, and all but one are in the medical field. Texas is an outlier. There, chief executives, the highest paying job in the Lone Star State, earn $239,060 on average.

Other types of jobs that can pay a six figure salary include airline pilots ($174,001), IT managers ($136,745), and lawyers ($101,790). A construction project manager earns about $113,257, while a college development officer makes $163,600. It’s probably fair to say that, in any industry, there are successful bosses who make six figures.

Recommended: What is The Difference Between Transunion and Equifax?

What Does a Six Figure Salary Get You?

What a six figure salary will get you depends on several other factors. A big one is the cost of living in your area. This is how much you spend on housing, transportation, food, and other necessities. When someone lives in a place with a high cost of living, they will typically have less disposable income and less to put into savings than someone who lives in a low cost-of-living location. This can be true even if both are making competitive salaries.

Another factor is household size. For a single person living in California, a six figure salary might be more than enough. However, a family of four living in the same area could be just scraping by.

Recommended: How to Counter a Salary Offer

Do You Need a Six Figure Salary to Build Wealth?

Not by a long shot. That said, you need to have a reasonable income to live on. For example, a $20,000 salary typically isn’t enough for a household to meet basic expenses. Let’s look at rent. The 30% rule recommends spending no more than $6,000 on rent per year (that’s 30% of $20K), which works out to $500 a month. The average rent nationwide is now $2,000, four times what you could afford on a $20,000 salary.

What about a $40,000 salary? This may be enough for a single person in some areas, but probably not for a family. And while an individual could afford basic necessities, they may not have much left for building wealth — that is, saving and investing.

Another factor is existing debt. If you are paying down high-interest credit card balances, it can be hard to also put money toward savings.

The income needed to build wealth then is an amount that covers the cost of living in your location, allows you to pay off any debt, and provides enough extra to set aside money for an emergency fund, retirement, and investing.

Recommended: Salary vs Hourly Pay

How to Build Wealth Without Earning a Six Figure Salary

As we hinted above, the steps to building wealth are the same for any salary. First, pay off your debt, especially high interest credit cards and loans. Money going to interest is money that could be going into your savings or investments.

Second, look for ways to cut back on spending: cooking at home instead of going to costly restaurants, closing fee-based apps that you don’t really need, and so on.

Finally, save and invest the money that isn’t going to credit card debt or other nice-to-have but not necessary expenses.

Recommended: Does Net Worth Include Home Equity?

The Takeaway

A six figure salary, meaning one between $100,000 and $999,999, is a benchmark for many people who want to meet financial goals. Having a good education is usually helpful but not always necessary, and certain jobs are more likely to come with six figure salaries. Having a good salary is helpful when building wealth, but the same strategies can be utilized on a five figure salary. Tracking your spending and automating your savings are two good first steps.

SoFi’s money tracker app allows you to monitor your accounts on a single mobile dashboard. And it’s free.

FAQ

Is a six figure salary good?

In most places in the United States, $100,000 is a good salary, covering the needs of an individual or small family, while building savings.

What does a six figure salary mean?

This is a salary that contains six digits: from $100,000 to $999,999.

What is an eight figure salary?

This is a salary amount consisting of eight digits: from $10 million annually to $99 million.

Photo credit: iStock/Renata Angerami

SoFi Relay offers users the ability to connect both SoFi accounts and external accounts using Plaid, Inc.’s service. When you use the service to connect an account, you authorize SoFi to obtain account information from any external accounts as set forth in SoFi’s Terms of Use. Based on your consent SoFi will also automatically provide some financial data received from the credit bureau for your visibility, without the need of you connecting additional accounts. SoFi assumes no responsibility for the timeliness, accuracy, deletion, non-delivery or failure to store any user data, loss of user data, communications, or personalization settings. You shall confirm the accuracy of Plaid data through sources independent of SoFi. The credit score is a VantageScore® based on TransUnion® (the “Processing Agent”) data.

*Terms and conditions apply. This offer is only available to new SoFi users without existing SoFi accounts. It is non-transferable. One offer per person. To receive the rewards points offer, you must successfully complete setting up Credit Score Monitoring. Rewards points may only be redeemed towards active SoFi accounts, such as your SoFi Checking or Savings account, subject to program terms that may be found here: SoFi Member Rewards Terms and Conditions. SoFi reserves the right to modify or discontinue this offer at any time without notice.

Financial Tips & Strategies: The tips provided on this website are of a general nature and do not take into account your specific objectives, financial situation, and needs. You should always consider their appropriateness given your own circumstances.

SORL0223006