A six-figure salary is a goal for many Americans, but depending on where you live, it might not go as far as somewhere else.
The purchasing power of a $250,000 salary, for instance, depends largely on a city's cost of living and overall tax environment. High earners might be able to maximize their earnings and take advantage of lower tax rates by moving cities.
If you want to get the most out of a $250,000 salary, the best place to go seems to be the South, according to a recent SmartAsset study outlining where high earners lose the most to taxes and cost of living.
The report compares the after-tax income in 76 of the largest U.S. cities and adjusts the figures for the cost of living. The data was compiled using SmartAsset's paycheck calculator, which calculates take-home pay after taking into account local, state and federal taxes. Cost of living expenses include housing, groceries, utilities, transportation and other goods and services.
The purchasing power of $250,000 in cities like New York and San Francisco, for example, is worth just shy of $83,000 after taxes and cost of living, the study finds. In cities like Memphis, Tennessee, and El Paso, Texas, though, $250,000 is worth much more, thanks to the states' lack of income tax.
For the fortunate 7% of American households earning $250,000 per year, here are the top 10 cities where that money goes the furthest.
1. Memphis, Tennessee
Thanks to Tennessee's lack of state income tax, $250,000 in Memphis holds an estimated value of $203,663.57. A $250,000 salary in Tennessee is taxed at a rate of 29.77%.
2. El Paso, Texas
Texas, like Tennessee, does not levy a state income tax. Thus, $250,000 in El Paso has the purchasing power of $200,180. A $250,000 salary in Texas is also taxed at a rate of29.77%.
3. Oklahoma City
Oklahoma's cost of living is 17% lower than the national average, SmartAsset reports. Thus, someone earning $250,000 will take home a salary worth $197,381.
4. Corpus Christi, Texas
Given Corpus Christi's low cost of living, a salary of $250,000 — taxed at a rate of 29.77% — has a purchasing power of $196,593.
5. Lubbock, Texas
In Lubbock, only 7% of households earn more than $200,000. For those earning $250,000, their salary is worth about $196,373.
6. Houston
Houston is the largest city on this list, home to more than 2.3 million residents. Here, $250,000 is worth $191,239. Yet, only 9% of the city's residents earn more than $200,000.
7. TIE: San Antonio, Fort Worth, and Arlington, Texas
San Antonio, Fort Worth and Arlington tie for seventh place, as $250,000 in these three cities is worth $188,772. Texas's absence of a state income tax allows these six-figure earners to maximize their money.
10. Jacksonville, Florida
Like Texas and Tennessee, the Sunshine State does not have a state income tax. Thus, $250,000 in Jacksonville is worth $186,169. This salary is taxed at a rate of 29.7%.
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