The $100,000 Salary Analysis for Ames

This guide strips away the hype. A $100,000 salary is a solid benchmark, but in Ames, IA, it is not a ticket to luxury. It is a calculation of survival and solvency. We are looking at Purchasing Power—what your money actually buys—rather than the vanity number on your offer letter.

1. The Verification Test

Before you budget, you must calculate what actually hits your bank account. The government takes its share first.

• Gross Salary: $100,000
• Federal Tax (Est.): -$14,369 (Based on standard deduction, single filer, 2024 brackets).
• FICA (Social Security/Medicare): -$7,650 (Flat rate on income up to the cap).
• Iowa State Income Tax: -$4,800 (Iowa has a progressive bracket system; effective rate estimated around 5.0% for this income level).
• Net Pay (Annual): $73,181
• Net Pay (Monthly): $6,098

Note: This excludes local city taxes (Ames has none) and potential deductions for health insurance or 401(k).

2. Smart Budget (50/30/20 Rule)

Using the $6,098 monthly net pay, we apply the standard allocation to see how far it goes in a college town market.

Needs (50%): $3,049

This covers essentials. In Ames, rent is the primary driver.

• Rent (1BR Average): $918
• Utilities (Electric/Heating): $150 (Highly variable due to Iowa winters).
• Groceries: $400
• Auto (Payment/Insurance/Gas): $600 (Required; public transit is limited).
• Health Insurance (Employee Contribution): $200
• Remaining: $781 (Buffer for maintenance, phone, or debt service).

Wants (30%): $1,829

Discretionary spending. This is where you feel the limits of the local economy versus big city wages.

• Dining/Entertainment: Ames has a capped ceiling; you can eat well, but high-end options are finite.
• Shopping/Hobbies: $1,000 (Plenty of room here).
• Travel: $829

Savings (20%): $1,219

This is your financial independence bucket.

• Retirement/Investments: $1,219 (Contribute enough to get the employer match, then max a Roth IRA).

3. Ames Tax Context

Ames, Iowa, sits in the middle of the national tax burden. It is not a "tax haven," but it avoids the predatory rates of the coasts.

• Vs. Texas/Florida: You are losing roughly $4,800 annually compared to these states. You pay for this via higher property taxes (embedded in rent) and sales taxes, though Iowa's income tax is currently being phased down.
• Vs. California/NY: You are saving roughly $8,000–$10,000 annually in income tax compared to these high-tax states. However, you are likely trading away $20,000+ in nominal salary potential.

The Verdict: Iowa is not a low-tax state. It is a "moderate" state. Your $73k net pay is significantly higher than the California equivalent of $100k (which nets roughly $72k), meaning your purchasing power in Ames is actually higher than a $100k salary in Los Angeles or NYC.

4. FAQ

"Is $100k good here?"
Yes. It is a high income for the area. You will live comfortably, save money, and likely have disposable income. However, do not confuse "rich in Ames" with "rich." You are financially stable, but not wealthy.

"Local income tax?"
No. The City of Ames does not levy a local income tax on residents. You only pay the Federal and Iowa State taxes.

"Why is my Net Pay lower than I expected?"
Because you are forgetting the $21,000 in mandatory Federal and FICA deductions before Iowa even touches your check. That is $1,785 gone every month before you see a dime.