Is your $100 Really Worth $100? Depends Where you Live

By Keith Blazek0 Comments

There might not be a difference in $100 bills from state to state. There is the same picture of Benjamin Franklin, the same colors, the same three digits. But what that $100 bill can get you varies depending on where you are located. Graphics in a recent post by depict the Tax Foundation’s research of the purchasing power of $100 in all 50 states. Here are the states that fall at the top and bottom of the list:
States where $100 buys you the most:
  1. Mississippi – $115.74
  2. Arkansas – $114.16
  3. Missouri – $113.51
  4. Alabama – $113.51
  5. South Dakota – $113.38
States where $100 buys you the least:
  1. District of Columbia – $84.60
  2. Hawaii – $85.32
  3. New York – $86.66
  4. New Jersey – $87.64
  5. California – $88.57
While the range may not be extreme in either direction, when you consider that this is the variation of only $100 and you begin to extrapolate that to your salary, the value of your business, etc. it becomes a much more interesting topic. It is important to remember that base salaries often reflect the purchasing power of a geographic region, so even if a dollar won’t stretch as far in a large metropolitan area, the salaries often reflect it. Either way, whether you are pondering areas to invest, areas to retire, or in the middle of a big move, it is interesting to see a complicated topic like inflation portrayed so simply in a few maps.
One way to ensure that your $100 will remain $100 is to shelter it in a tax-free or tax-deferred retirement account like a Roth or Traditional IRA. Regardless of where you live, that $100 will compound in a tax-free environment as long as it is within the account. And the IRA can go with you wherever you decide to live! So even if your $100 is only worth $88.57 in California, if you take your compounded dollars with you to retire in Texas, all of a sudden every $100 you’ve been growing inside your account is suddenly worth an average of $15.06 more.
Leave a comment below with your thoughts or experiences; we’d love to hear your feedback.