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Disposable income in the US

Current US disposable income, including historic and current average, formula and more (updated monthly).

Disposable personal income in the US went from $15,118 billion in October to $15,158 billion in November 2022(1).

US disposable income: A historical view

What is the average disposable income in the US per capita?

The average disposable income hit $56,088 in the US in 2021, up from $53,038 in 2020.

US disposable income: Rolling 10-year average

The 10-year rolling average disposable income in the US is roughly $45,815 over the last decade, meaning the average disposable income in 2021 is about $10,273 (or 22%) higher than it has been on average over the last 10 years.

What is disposable income?

Disposable income is defined by the Bureau of Economic Analysis (BEA) as the “amount that US residents have left to spend or save after paying taxes.”(2) The US personal saving rate is the percentage left of your disposable income after you’ve paid taxes and spent money.

How to calculate your disposable income

To calculate your disposable income, deduct the taxes you pay from your total or gross income. The result is also referred to as your net income. So the disposable income formula is as follows:

Gross income – taxes = disposable income

Say you live and work in New York with an annual salary of $100,000. Your disposable income is the result of $100,000 less the roughly $28,000 you’ll pay in state and federal taxes — which comes to about $71,876(3).

This example assumes marital status and other variables with figures based on 2021 state and federal tax rates.

Making your disposable income work for you

One simple budgeting rule people work to is 50-30-20. That is 50% of your income goes to needs, 30% on wants and 20% into savings.

Now, if you’re making $100,000 per year in New York you’re looking at a disposable income of $71,876 less any federal and state taxes, which means you got a savings goal of $14,375.20 per year ([$71,876 / 100] * 20 = 14,375.20).

Obviously, that doesn’t hit your account all at once but will trickle through in increments of $276.45 per week ($14,375.20 / 52 = $276.45). If we use the average the APY’s of the cards listed on Finder’s best savings accounts (at the time of writing), we get an average APY of 3.43%.

If we throw both the figures into a savings calculator you’ll see that you could make roughly $254.11 in interest after one year, $6,554.78 after 5 years and $27,777.14 over the next decade.

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