The state where a family of 4 needs nearly $330K a year to live ‘comfortably’ isn’t California or New York — and it tops the US

According to a report by SmartAsset, using the 50/30/20 budgeting rule, a family of four in Massachusetts needs a household income of $329,000 per year to live comfortably — one of the highest rates for families in the country; second only to Hawaii.

While households are receiving a reprieve from declining natural gas rates, elevated mortgage rates continue to squeeze housing affordability.

As the state’s affordability crisis deepens, residents and potential movers are left grappling with hard choices about where and how they can afford to live.

How Massachusetts compares to the rest of the U.S.

To understand how expensive the commonwealth has become, it helps to compare its cost of living to national benchmarks. The median household income in the U.S. is $87,460, according to the U.S. Census Bureau’s most recent data.

In Massachusetts, that number is higher, at around $106,539, according to the U.S. Census, but it still falls far short of what’s needed to live comfortably. Only a small percentage of families in the state make $329,000 or more annually (less than 10%), which means the majority of households, including those that are considered upper-middle class, are strained.

The main offender behind the state’s high cost of living is still housing. Even though the median home price in Massachusetts has dropped year-over-year, it’s still ranked in the top 5 at $464,863, according to Redfin, and rent for a two-bedroom apartment averages more than $1,962 per month — a steep increase over the national average rent of about $1,557.

Childcare costs are also sky-high, with families in the Boston metro area often spending on average $26,343 annually per child for full-time care. Add in healthcare, groceries, utilities and transportation, and it’s easy to see how quickly expenses can balloon past manageable levels.

Who’s catching up and who’s falling behind?

Massachusetts may be one of the most expensive states for families today — second only to Hawaii — but others are not far behind. California, New York and D.C. have long been known for their high costs. Recent data shows three other states with costs of living rising faster than the national rate: Alaska, Washington, New Jersey and Maryland.

In Washington, rising tech-sector wages and housing demand in Seattle have driven prices higher. In Alaska, transportation and imported goods prices increase living expenses. Maryland’s close proximity to D.C., high state taxes and severe housing shortage impact its cost of living.

Still, Massachusetts has a lot more pros for families than cons. The state ranks among the best nationally for education and safety. But those perks come at a price.