Is $130,000 a Year Enough to Live Comfortably in Los Angeles, CA?
The answer to this question varies widely depending on several factors, including the individual or family's lifestyle, the type of income, and the specific cost of living in the area. When considering a gross salary of $130,000 per year in Los Angeles, California, it is crucial to take a closer look at net income and the various expenses associated with living in such a high-cost city.
Single Income vs. Combined Income
If $130,000 is a single income, it is important to consider how it would be divided between the household. A single income with one dependent (the spouse and child) would likely result in a higher tax break compared to a couple with two incomes and one dependent. This could potentially offset some of the higher living costs in Los Angeles.
Roughly, with two dependents, a salary of $130,000 could translate to around $8,000 per month. A 2-bedroom apartment in a decent neighborhood would likely cost between $3,000 to $3,500 per month, leaving a substantial amount for other expenses. However, it is important to understand that living in Los Angeles does not guarantee a Hollywood lifestyle, but it may allow for a comfortable and secure lifestyle without living paycheck to paycheck.
The Bottom Line: Why $130,000 May Be Insufficient
The short answer is that $130,000 would likely be insufficient for a comfortable life in Los Angeles, given its high cost of living.
When considering net income after taxes, the gross salary of $130,000 would net around $65,000. This is due to federal taxes taking about 30% and state taxes taking another 13%. The high cost of living in Los Angeles further impacts this amount significantly.
Key Expenses in Los Angeles
Monthly rent for a three-bedroom, two-bath house in Los Angeles averages around $4,500, bringing the annual cost to $54,000. Car insurance for two vehicles typically ranges from $4,500 to $5,500 per year. These expenses alone leave a significant dent in the net income.
Even before factoring in other essential costs like food and gas, which with an average gallon price of $5.00 can quickly add up, one can see how challenging it is to comfortably live in Los Angeles with a net income of $65,000.
The extreme cost of living has led to thousands of people moving out of California each year, particularly those without substantial savings or assets. It is not uncommon for people to sell their homes and leave the state in search of more affordable living conditions.
Is There Any Hope for Those With an Income of $130,000?
For those who wish to own a home, the scenario becomes even more challenging. The sky-high housing market in Los Angeles means that a gross salary of $130,000 would not be enough to cover the costs associated with homeownership, such as down payments, mortgage payments, property taxes, and maintenance costs. According to statistical data, over 700,000 people leave California yearly primarily due to the high cost of living and struggling to maintain a comfortable lifestyle.
However, for those purely renting, an income of $130,000 can provide a solid foundation for a comfortable living. With careful budgeting and prioritizing essential expenses, it is possible to maintain a quality of life in Los Angeles. However, it is crucial to be aware of the high cost of necessities and to plan accordingly.