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Is Employer Life Insurance Enough?

Many jobs come with a benefits package on top of paid wages or salary — things like, health insurance, dental insurance, and 401(k) retirement accounts. Employer life insurance may also be included in a benefits package to give an employee’s beneficiaries some added financial security in the event of their death.

According to the U.S. Bureau of Labor Statistics, approximately 98% of workers with access to employer life insurance choose to participate. But is life insurance offered through your employer enough to take care of your loved ones if you pass away?

There’s no one-size-fits-all approach to financial planning and purchasing life insurance. Depending on an individual’s unique situation and financial goals (or obligations), the amount of life insurance coverage needed can vary from person to person.

To help determine how much life insurance is right for you, let’s break down the basics of employer life insurance and how different policies might work in practice.

What Is the Typical Coverage Offered?

Commonly, employers that provide life insurance purchase a group term policy for their employees. Term life insurance grants coverage for a specific time period, known as the term, in exchange for regular payments (called premiums) by an employer or the insured employee. Unlike individually purchased term insurance, the term for group insurance is typically the duration of the employ of the insured.

Group term life insurance can also vary by amount. An employer may offer a flat rate of coverage to their employees. Or, in some cases, an employer may calculate the total life insurance coverage according to an employee’s current salary. For example, an employer life insurance policy may pay out one, two, or three times the employee’s annual salary.

While the benefit coverage amount under employer life insurance may vary by salary, you may still qualify for a group policy even if you’re older or have pre-existing conditions and less-than-perfect health. However, note that coverage may lapse when employment ends or if an employee switches from full-time to part-time work. Some companies offer policies that are “portable,” meaning the employee can take the policy with them when/if they leave the employer.

Life insurance could reinforce a long-term financial plan.

If an insured employee dies during the policy’s term, the insurance company is then responsible for paying the coverage amount to the designated beneficiaries, barring a few exceptions, like suicide within two years of the policy start date or death from an exempt hazardous activity (e.g. piloting a plane).

This payment is called a “death benefit,” and can be paid as a lump sum or in installments depending on a policy’s conditions. On the other hand, if an insured employee dies after the insurance term ends, their beneficiaries do not receive a payout of death benefits.

Recommended: What Is Life Insurance & How Does It Work?

How Much Can Employer Life Insurance Cost?

For employers with many employees, obtaining a group life insurance policy parallels wholesale purchasing, meaning that the price per individual is generally less than if each employee paid for their own policy. Therefore, employment life insurance is usually very affordable for employees, if not free, for the most basic coverage.

However, this sort of baseline benefit does not account for additional coverage, which employers may also offer (on top of the standard group policy) at the partial or full expense of the employee.

Determining if extra coverage through an employer is cost effective may depend on several factors, including age, health, income, and number of dependents. For example, smokers can pay up to two or three times more on life insurance premiums than their non-smoking counterparts.

Keep in mind that employer life insurance may be subject to payroll taxes, such as Social Security and Medicare. For any benefits coverage greater than $50,000 that is paid or subsidized by an employer, the total amount exceeding $50,000 would be counted as employee income by the IRS.

The threshold for taxation on coverage for spouses and dependents is significantly lower, at just $2,000. Any employer life insurance plan with coverage above $2,000 would be liable for taxation in its entirety.

Is It Possible to Switch Coverage?

Employer life insurance can be affordable, but it may not be very customizable or flexible.

Since the employer holds the group policy with a specific insurance company, employees do not usually have the individual discretion to shop around for the coverage offered in a benefits package.

Opting for an alternative or supplemental life insurance policy may require undergoing a life insurance medical exam. This exam could consist of a verbal questionnaire with a medical professional and collecting blood and/or urine samples.

Together, medical history and personal information are some of the different factors used to decide whether an applicant is eligible for life insurance coverage.

Information from the medical exam can impact the cost of the eventual insurance premium as well, assuming the applicant is deemed eligible. In this scenario, younger, healthier employees may opt to switch to an individual life insurance policy, since they could obtain a lower rate that may last for decades of coverage.

Since employer life insurance coverage can lapse when employment ends, it may be useful to research various policy options (or speak with a benefits specialist at your job) to ensure coverage is not interrupted when jobs change.

Recommended: How to Buy Life Insurance

What Happens If I Change or Lose My Job?

For many working adults, changing jobs is necessary for career growth and achieving financial goals. But changing or leaving a job may come with some financial challenges beyond a disruption to income. Employer benefits, such as health insurance, 401(k) retirement account, and life insurance may be put on hold or not carry over to a new employer.

Some insurance companies may let you transfer to a new employer’s policy, especially if they are the new employer’s insurance provider. In some cases, it may be possible to convert a former employer’s group term policy to individual term or whole insurance with the same insurance company.

When life insurance had previously been paid for or subsidized by an employer, taking out an individual policy could translate into an increased individual monthly expense. That’s because the policyholder, not the employer, would now be paying the life insurance premiums.

Whole life insurance, sometimes called permanent life insurance, is generally more expensive than term policies, since it can cover an insured individual for life.

What About an Additional Policy?

Employer life insurance could provide at little to no cost basic coverage for a family in the event of an unexpected death. But many people decide to take out additional insurance or expand their coverage through a rider, which is an add-on that allows insured individuals to customize their policy to their needs.

Cost and conditions for riders can vary between insurance providers. The following are some common types of riders that might supplement an existing life insurance policy:

•   Accidental Death Rider: If the insured individual dies from an accident, a greater death benefit is paid out to beneficiaries. This could be advantageous for a working parent to take care of surviving family’s future expenses if the unexpected were to happen.

•   Accelerated Death Benefit Rider: An insured individual could receive a portion of their death benefits while they’re alive if a diagnosed terminal illness is expected to significantly reduce their lifespan. This could help pay for the sudden cost of care and treatment, but might be subtracted from the amount family and beneficiaries receive upon the insured person’s death.

•   Spouse Insurance Rider: This rider can add a spouse to an insured person’s policy instead of taking out separate life insurance for them.

•   Waiver of Premium Rider: This rider can waive the need to pay insurance premiums while maintaining coverage, if an insured person becomes permanently disabled or can no longer work due to an injury or illness. Policyholders who are at risk due to dangerous jobs or family history may find this sort of policy worthwhile.

In addition to considering the perks and costs of riders, comparing term and whole life insurance is helpful for finding the right policy for you.

Determining How Much Coverage You Need

Everyone’s situation is different. And, securing life insurance may provide confidence and reinforce a long term financial plan. To figure out how much life insurance coverage may be needed, it can be helpful to first get an accurate picture of your finances and likely future expenses.

For people with children and dependent family members, a breadwinner’s death could result in lost income that supported essential spending, such as groceries, rent or mortgage payments, and utilities. It could also create additional expenses for childcare or a home health aide, if a surviving parent or caregiver then needs to work.

There are also down-the-road expenses, like retirement and college tuition for children, that could be impacted by the loss of a spouse, partner or parent.

Unpaid debt — such as, a mortgage loan, credit card balances, and student loans — are some long-term payments to factor in — since cosigners or the estate could still be left with the burden of making payments on certain debts. (Note that estate and debt laws vary from state to state).

Death can be accompanied by notable end-of-life expenses, too. On average, funerals cost between $7,000 and $12,000 depending on location and whether the deceased is buried or cremated.

In addition to savings and investments, life insurance can offer a financial safety net and support the future of those left behind.

The Takeaway

Employer life insurance can be an asset to a family’s financial security, as typically it grants coverage for a specific time period. The benefit coverage amount may vary by salary, and older employees or those with pre-existing conditions may still qualify for a group policy. Coverage could expire when your employment ends or if you move from full-time to part-time work. If you need more coverage, you may decide to take out additional insurance on top of your employer life insurance.

If you’re thinking about getting life insurance, SoFi has partnered with Ladder to offer competitive life insurance policies that are quick to set up and easy to understand. You can apply in just minutes and get an instant decision. As your circumstances change, you can easily change or cancel your policy with no fees and no hassles.

Complete an application and get your quote in just minutes.


Coverage and pricing is subject to eligibility and underwriting criteria.
Ladder Insurance Services, LLC (CA license # OK22568; AR license # 3000140372) distributes term life insurance products issued by multiple insurers- for further details see ladderlife.com. All insurance products are governed by the terms set forth in the applicable insurance policy. Each insurer has financial responsibility for its own products.
Ladder, SoFi and SoFi Agency are separate, independent entities and are not responsible for the financial condition, business, or legal obligations of the other, Social Finance. Inc. (SoFi) and Social Finance Life Insurance Agency, LLC (SoFi Agency) do not issue, underwrite insurance or pay claims under Ladder Life™ policies. SoFi is compensated by Ladder for each issued term life policy.
SoFi Agency and its affiliates do not guarantee the services of any insurance company.
All services from Ladder Insurance Services, LLC are their own. Once you reach Ladder, SoFi is not involved and has no control over the products or services involved. The Ladder service is limited to documents and does not provide legal advice. Individual circumstances are unique and using documents provided is not a substitute for obtaining legal 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.

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

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.

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4 Tips for Handling Finances After a Pay Cut

Because of economic uncertainty, some companies have resorted to pay cuts to help cut costs. For the workers affected, it likely means scouring their budgets to trim some of their expenses. Taking a pay cut means facing the reality of no longer living the same financial life.

If you’ve just taken a pay cut — or you’re worried that you might soon be facing one — here are four strategies to handle your finances after your salary is reduced.

1. Update Your Budget

First and foremost, create a budget if you don’t already have one. List all your expenses for weekly purchases, from groceries to gasoline and parking fees. Add monthly bills, including rent or mortgage, car loan, streaming services or cable, cellphone, utility bills, credit cards, student loans, and any other debt such as personal loans.

Next, examine all your expenses to see which ones you can lower or eliminate for the next six months. Add your income and include part-time jobs or side hustles, tax refunds, bonuses, and any child support or alimony. This will help you determine how much money you can spend for necessities, expenses, entertainment, and other things such as doctor visits.

In addition to a budget, create a plan for both short-term financial goals and long-term goals. A plan will help you determine when you can pay off any loans and how much you want to save for something like a down payment on a house.

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2. Track Your Spending

You could use a free money tracking app that can help you keep tabs on your spending and help manage your debt. To track your spending, decide if you want to track it daily, weekly, or biweekly. You might try different time periods before you decide on one.

After you track your spending for two or three months, you’ll see a pattern emerge that indicates where most of your money goes.

3. Cut Expenses

One place many consumers can cut costs is from entertainment, such as their streaming services. These can really add up. Canceling all or some of these services can improve your cash flow, which is how much money you have left over at the end of the month.

Another place where you can slash expenses is from your food budget. Consider using digital coupons, shopping at warehouse clubs, or going out to eat for lunch instead of dinner to save money on food.

Your expenses include debt such as credit cards, student loans, and personal loans. Paying more than the minimum balance, refinancing to a lower interest rate. and making extra payments can help you pay down the loan sooner.

Consider refinancing your student loans by checking out both fixed and variable rates. Interest rates are at historic lows. You might be able to pay down your credit card bills faster by taking out a personal loan; those interest rates are often lower. And if that’s the case, the debt could be paid sooner.

Automating your finances can make your life easier. This will also help you avoid paying late fees. You can either have your bills paid automatically through your checking account or set yourself a reminder on your calendar if you have some bills such as utilities that are a different amount each month.

You can also automate your savings. You can have money taken out of your checking or savings account each month and have it automatically invested into your workplace 401(k) plan or an individual retirement account (IRA).

In addition, you could consider opening an online bank account with a high-yield APY. That way, your savings could earn money for you as it’s sitting in your account.

Ways to Save

When your salary has been slashed, there are several ways you can save money immediately and long term.

Call your mortgage, auto loan, utilities, credit card, and student loan companies to see if you can defer loan payments for several months. Skipping a few payments can help you get back on your feet sooner. If the company cannot provide this option, see if the interest rate can be lowered on, say, credit cards.

Check with your local nonprofit organizations. Many provide food or partial payments for utility bills. Look online to see if stores are offering deals. Stock up on staples such as beans, rice, and pasta if they are on sale.

If you are still short of money, you might consider talking to family members and friends about obtaining a short-term loan.

Now might be the time to use credit card rewards for cash, food, or gift cards.

People who have been saving credit card rewards for a vacation might want to go ahead and use them now. Some credit card companies will let you transfer the rewards for cash to your statement or use them for food delivery.

Other companies let you use your rewards to receive gift cards. Using these gift cards at retailers that sell staples and necessities such as food, detergent, and other personal items can help you spend less money.

Many credit cards will give cash back on purchases such as food and gasoline. See which credit cards are the most beneficial for your financial needs before signing up for a brand-new credit card.

Another way to save money is to use cash for gasoline. Some gas stations offer a cheaper price for consumers who use cash. The savings can add up quickly, especially if you have a longer commute.

Finally, each month, look for other ways you can save money. If your credit card company denied your request last month to lower your interest rate, try calling again. Rules can change often.

4. Save for Retirement

While you could skip saving for retirement, it’s ideal to continue socking away some money each month from your paycheck into a 401(k) plan or IRA. The money you stash away for retirement can lower your taxable income, meaning you’ll owe the IRS less.

Continuing to save money for retirement is a good habit, especially if your salary reduction is temporary. Once you stop contributing to a retirement account, it can be difficult to catch up on your retirement savings. If you have your retirement contribution automatically deducted from your checking or savings account, saving for your future is easier.

The Takeaway

While it can be difficult to navigate a pay cut, creating a budget, tracking your spending, shopping for deals, and cutting expenses can help you save and get through a tough time.

In addition, opening a new savings account could help you maximize your money. With SoFi Checking and Savings you’ll earn a competitive APY and pay no account fees.

See how SoFi Checking and Savings can help your money do more.


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SoFi members with direct deposit activity can earn 4.60% annual percentage yield (APY) on savings balances (including Vaults) and 0.50% APY on checking balances. Direct Deposit means a deposit to an account holder’s SoFi Checking or Savings account, including payroll, pension, or government payments (e.g., Social Security), made by the account holder’s employer, payroll or benefits provider or government agency (“Direct Deposit”) via the Automated Clearing House (“ACH”) Network during a 30-day Evaluation Period (as defined below). Deposits that are not from an employer or government agency, including but not limited to check deposits, peer-to-peer transfers (e.g., transfers from PayPal, Venmo, etc.), merchant transactions (e.g., transactions from PayPal, Stripe, Square, etc.), and bank ACH funds transfers and wire transfers from external accounts, do not constitute Direct Deposit activity. There is no minimum Direct Deposit amount required to qualify for the stated interest rate.

SoFi members with Qualifying Deposits can earn 4.60% APY on savings balances (including Vaults) and 0.50% APY on checking balances. Qualifying Deposits means one or more deposits that, in the aggregate, are equal to or greater than $5,000 to an account holder’s SoFi Checking and Savings account (“Qualifying Deposits”) during a 30-day Evaluation Period (as defined below). Qualifying Deposits only include those deposits from the following eligible sources: (i) ACH transfers, (ii) inbound wire transfers, (iii) peer-to-peer transfers (i.e., external transfers from PayPal, Venmo, etc. and internal peer-to-peer transfers from a SoFi account belonging to another account holder), (iv) check deposits, (v) instant funding to your SoFi Bank Debit Card, (vi) push payments to your SoFi Bank Debit Card, and (vii) cash deposits. Qualifying Deposits do not include: (i) transfers between an account holder’s Checking account, Savings account, and/or Vaults; (ii) interest payments; (iii) bonuses issued by SoFi Bank or its affiliates; or (iv) credits, reversals, and refunds from SoFi Bank, N.A. (“SoFi Bank”) or from a merchant.

SoFi Bank shall, in its sole discretion, assess each account holder’s Direct Deposit activity and Qualifying Deposits throughout each 30-Day Evaluation Period to determine the applicability of rates and may request additional documentation for verification of eligibility. The 30-Day Evaluation Period refers to the “Start Date” and “End Date” set forth on the APY Details page of your account, which comprises a period of 30 calendar days (the “30-Day Evaluation Period”). You can access the APY Details page at any time by logging into your SoFi account on the SoFi mobile app or SoFi website and selecting either (i) Banking > Savings > Current APY or (ii) Banking > Checking > Current APY. Upon receiving a Direct Deposit or $5,000 in Qualifying Deposits to your account, you will begin earning 4.60% APY on savings balances (including Vaults) and 0.50% on checking balances on or before the following calendar day. You will continue to earn these APYs for (i) the remainder of the current 30-Day Evaluation Period and through the end of the subsequent 30-Day Evaluation Period and (ii) any following 30-day Evaluation Periods during which SoFi Bank determines you to have Direct Deposit activity or $5,000 in Qualifying Deposits without interruption.

SoFi Bank reserves the right to grant a grace period to account holders following a change in Direct Deposit activity or Qualifying Deposits activity before adjusting rates. If SoFi Bank grants you a grace period, the dates for such grace period will be reflected on the APY Details page of your account. If SoFi Bank determines that you did not have Direct Deposit activity or $5,000 in Qualifying Deposits during the current 30-day Evaluation Period and, if applicable, the grace period, then you will begin earning the rates earned by account holders without either Direct Deposit or Qualifying Deposits until you have Direct Deposit activity or $5,000 in Qualifying Deposits in a subsequent 30-Day Evaluation Period. For the avoidance of doubt, an account holder with both Direct Deposit activity and Qualifying Deposits will earn the rates earned by account holders with Direct Deposit.

Members without either Direct Deposit activity or Qualifying Deposits, as determined by SoFi Bank, during a 30-Day Evaluation Period and, if applicable, the grace period, will earn 1.20% APY on savings balances (including Vaults) and 0.50% APY on checking balances.

Interest rates are variable and subject to change at any time. These rates are current as of 10/24/2023. There is no minimum balance requirement. Additional information can be found at https://www.sofi.com/legal/banking-rate-sheet.


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.

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.

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What Is the Average Pay in the United States Per Year?

Whether you’re deciding on a new career path or wondering whether you’re being paid enough, it can help to know what the typical American worker earns per year.

Based on the latest data available from the Social Security Administration (SSA), the average annual pay in the U.S. in 2021 was $60,575 — an 8.89% jump from the previous year. The U.S. Bureau of Labor Statistics (BLS) estimates the average worker made closer to $67,610 that same year. The amount you make may depend on a number of factors, including your occupation, where you live, your gender, and your level of education.

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Key Findings

Let’s take a closer look at how the average annual pay in the U.S. has changed over a three-year period based on data from both the SSA and BLS.

Year

Average Annual Salary per SSA

Average Annual Salary per BLS

2019 $54,099.99 $59,209
2020 $55,628.60 $64,021
2021 $60,575.07 $67,610

It can also be helpful to look at median earnings, which represent the midpoint of salaries in the U.S. In other words, half of the salaries fall below the median, and half are higher than the median.

The following table shows the median annual salary for a three-year period.

Year

Median Annual Salary

2022 $54,132
2021 $51,896
2020 $51,168

Source: BLS

As you can see, average and median incomes have risen each year. However, average salaries can be affected by various factors such as your occupation, age, and gender. Note that the numbers above also don’t include unearned income.

Examples of High-Salary Jobs in the US

Some industries tend to pay more than others, which means the career you choose may affect how much you earn. Here’s a sampling of high-paying jobs and their average annual salary, according to the BLS:

•   Cardiologist, $353,970 per year

•   Dentist, $177,770

•   Aircraft pilots and flight engineer, $169,540

•   Lawyer and judicial law clerk, $146,220

•   Public relations manager, $138,000

•   Air traffic controller, $127,920

Recommended: How to Reduce Taxable Income for High Earners

Average American Income by Occupation

While salaries tend to vary based on geography, seeing how much certain types of jobs pay can be informative. Let’s take a look at different occupations and how much they typically pay.

Occupation (Type)

Average annual salary

Management $123,370
Legal $113,100
Computer and Mathematical Operations $99,860
Architecture and Engineering $91,740
Healthcare Practitioners and Technical $91,100
Business and Financial Operations $82,610
Life, Physical, and Social Science $80,730
Arts, Design, Entertainment, Sports, and Media $66,100
Educational Instruction and Library $62,140
Construction and Extraction $55,900
Community and Social Service $53,960
Protective Service $53,420
Installation, Maintenance, and Repair $53,380
Sales (and Related) $46,080
Office and Administrative Support $43,430
Transportation and Material Moving $41,340
Farming, Fishing, and Forestry $34,730
Building and Grounds Cleaning and Maintenance $33,750
Personal Care and Service $33,620
Healthcare support $33,330
Food Preparation and Serving Related $29,450

Source: BLS, May 2022 data

Keep in mind that average salaries may differ depending on the specific occupation you have. For example, although claims adjusters fall under the business and financial operations category, their average salary is around $70,960.

US Income by Gender

Demographics, specifically gender, are another factor to consider. By and large, men tend to outearn women throughout their career. The median annual salary for a 16- to 24-year-old man is $33,800; a woman of the same age earns $31,460, per the latest data available from the BLS. Likewise, the median annual salary for a man aged 25 and older is $60,320; a woman of the same age earns $49,608.

Median Income by State

Wages often vary based on where you live. In many cases, states with higher costs of living also have higher wages. For example, the median annual income in Hawaii is $100,532 — much higher than Mississippi’s median annual income of $61,205.

Below is the median income by state for a household of three people, according to data compiled by the Census Bureau between April 1 and May 14, 2022.

State

Median annual income

Alabama $70,250
Alaska $108,072
Arizona $79,110
Arkansas $70,169
California $97,092
Colorado $100,744
Connecticut $108,409
Delaware $96,841
District of Columbia $138,342
Florida $75,057
Georgia $79,980
Hawaii $100,532
Idaho $76,635
Illinois $97,067
Indiana $81,783
Iowa $85,758
Kansas $88,369
Kentucky $71,501
Louisiana $71,371
Maine $87,051
Maryland $113,994
Massachusetts $117,415
Michigan $84,245
Minnesota $106,445
Mississippi $61,205
Missouri $80,022
Montana $79,652
Nebraska $91,076
New Hampshire $113,013
Nevada $91,076
New Jersey $117,697
New Mexico $66,183
New York $96,854
North Carolina $76,386
North Dakota $94,950
Ohio $82,734
Oklahoma $71,397
Oregon $93,773
Pennsylvania $92,441
Rhode Island $101,104
South Carolina $75,128
South Dakota $87,475
Tennessee $75,394
Texas $80,733
Utah $90,629
Vermont $92,628
Virginia $102,869
Washington $104,644
West Virginia $71,757
Wisconsin $92,586
Wyoming $88,902

US Income by Race

As the BLS data below shows, there is often a pay disparity among workers of different races and ethnicities.

•   Asian, $69,056 per year

•   White, $52,936

•   Black or African American, $41,652

•   Hispanic or Latino, $40,404

How Does Your Income Stack Up?

Now that you’ve seen some of the average and median annual salaries by occupation, location, gender, and race or ethnicity, how does yours compare? If you’re not making as much as you’d like, you may want to research wages in your industry and region, and use that information to help you negotiate a higher salary. If you’re ready to make a bigger change, you can use this data as you consider whether to switch to a more lucrative field or relocate to a higher-paying region.

Recommended: How to Negotiate Your Signing Bonus

How to Stretch Your Income

Here are some different strategies to help you make the most of the money you make:

Track Your Spending

Understanding exactly where your money is going can help you keep tabs on where your money is going and identify areas where you can cut back. Consider using a spending app to track your spending and saving.

Negotiate Bills

Want to lower monthly expenses, such as your cell phone or internet services? Consider calling up various providers to see if you’re able to get a better deal or if there are promotions you can take advantage of.

Cut Back on Large Expenses

Housing, food, and transportation tend to be the largest line budget items. Explore ways to trim your biggest costs. Examples include refinancing your mortgage, negotiating your rent, shopping at discount grocery stores, and taking public transportation when possible.

Sharpen Your Marketable Skills

Accepting networking opportunities and taking professional development courses could help you become more marketable as an employee. This in turn could set you up to earn more in the long run. If you’re on a tight budget, look into no- or low-cost ways to cultivate high-income skills, and ask your employer if there are any free resources are available.

Pros and Cons of a High Salary

A high income can be great, but it does come with some downsides.

Pros:

•   Improved quality of life: With more money, you can afford a higher standard of living and be able to afford different amenities such as better access to healthcare and food.

•   Financial security: The more you earn, the more you can feel secure you have enough money to afford the things you want and need.

•   Ability to achieve financial goals faster: Having more disposable income could mean you can set more money aside for long- and short-term savings goals, like retirement or going on a family vacation.

Cons:

•   Higher taxes: Earning more can put you in a higher tax bracket. However, there are ways to reduce your taxable income.

•   Pressure to maintain income: If you’re accustomed to a certain living standard, you may feel like you need to keep earning the same amount or more to maintain it.

•   More work stress: In many cases, higher-paying jobs come with more responsibilities and at times, longer hours.

The Takeaway

Understanding what the average American worker makes in a year can come in handy, especially if you’re considering a new career path, negotiating a higher salary, or looking for a new place to live. According to the latest data from the Social Security Administration, the average annual pay in the U.S. is $60,575. But the amount you earn may depend on a wide range of factors, such as the industry you work in, where you live, your gender, and your race or ethnicity.

If you’re looking to make the most out of the money you earn, consider using a money tracker app. The SoFi app connects all of your accounts in one convenient dashboard. From there, you can see all of your balances, spending breakdowns, and credit score monitoring, plus you can get other valuable financial insights.

Stay up to date on your finances by seeing exactly how your money comes and goes.

FAQ

What is a good salary in the USA?

There’s no one set amount that would be considered a good salary in the U.S. However, the average salary is around $60,575, according to the Social Security Administration.

What is the real average wage in the US?

The average wage in the U.S. is $67,610 according to the most recent data available from the U.S. Bureau of Labor Statistics.

What is the top 10 percent income in the US?

According to the Economic Policy Institute, the top 10% of workers in the U.S. earn $133,482.

How much should you be making at 30?

While there is no definitive amount you should earn by the time you’re 30, the average salary for U.S. workers aged 25 to 34 is $52,832, according to statistics from the U.S. Bureau of Labor Statistics.


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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.

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