Here’s where your salary will go the furthest — and where it won’t

If you want to be able to sock away hefty sums for your retirement, you’ll need to be able to save significant amounts of your income to invest for your future. That’s a lot easier to do in some places than others, though.

Here’s a look at some of the metropolitan statistical areas where your salary will go the furthest — and the least far. Check them out and then consider the cost of living on your salary where you are. If it’s too high, you may want to do something about that.

Where your salary won’t go very far at all

Let’s start with the more obvious list. Below are the five U.S. metropolitan regions with the lowest adjusted average salaries, per 2019 research by the folks at Indeed.com. Remember that while relatively higher salaries in the “unadjusted” column might be appealing, it’s the “adjusted” column that matters, as it takes into account the cost of living in that area.

Data source: Indeed.com.

Where your salary will go the furthest

Here are the areas that might surprise you the most — metro regions with the highest adjusted average salaries:

Source: Indeed.com.

With the exception of the Sacramento metro area, salaries for all these places have been adjusted upward due to the low prevailing cost of living, meaning that people who live there stand a better chance of being able to invest more for retirement.

If the average salaries seem higher than you might expect, that’s because they’re based on job listings on the Indeed.com website, so they likely don’t incorporate some low-income positions because those jobs aren’t advertised on the site.

Metro regions with jobs and good salaries

The two tables above offer some insight, but its fair to ask how useful it is to know that a metro area pays well if there aren’t many jobs available paying those better-than-average salaries in those towns at the moment. That’s where the list below might be more useful, as it pulls out the Top 10 metro regions with both high adjusted salaries and higher-than-average job openings:

1. Duluth (Minnesota, Wisconsin)
2. Wilmington (North Carolina)
3. Lubbock (Texas)
4. San Antonio/New Braunfels (Texas)
5. St. Louis (Missouri, Illinois)
6. Sacramento/Roseville/Arden/Arcade (California)
7. Little Rock/North Little Rock/Conway (Arkansas)
8. Salem (Oregon)
9. Kalamazoo/Portage (Michigan)
10. Gainesville (Florida)

What to do

So what should you do if your salary isn’t going as far as you need it to? Well, there are a lot of ways you can improve your situation. Here are some:

• Relocate: This may be the most obvious strategy, though it’s among the hardest for many people, because we’re often very tied to where we live due to proximity to family, jobs we don’t want to leave, etc. Still, moving to another region that has a much lower cost of living and good job opportunities can be a powerful wealth-building move.
• Downsize: You can stay in your town or region and save a lot of money by downsizing. Move to a smaller home, for example, and you’ll likely be paying less in mortgage payments, taxes, insurance, maintenance, repairs, and utilities. Downsize your automotive fleet by one vehicle and you might save a lot on insurance, maintenance, and repairs.
• Get a side gig: If you start generating a little extra income on the side, you might be able to save and invest it all, turbocharging your retirement accounts. There are many ways to make money on the side — such as driving for a ride-sharing service or delivering goods and meals.
• Spend less: Take some time to study your finances and see where your dollars are going. Then make some changes. You might quit your gym, drop your cable service, and raise your insurance deductible. There are many ways to spend less, and spending just $50 less per week can generate $2,600 annually for savings.
• Get a better-paying job: See how you might be able to get paid more. Simply asking for a raise can be surprisingly effective. You might also gain new skills and/or certifications to qualify you for higher-paying jobs.

If you can free up or generate $5,000 or $10,000 annually and you invest that each year, you can build quite a retirement nest egg:

Data calculations by the author.

It’s worth examining your financial life every few years (or more often), to see what productive moves you can make to bolster your financial security — both now and in the future.