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How many people making $200,000 live as if they make $30,000? I think if you look at all the people you know their spending kind of matches their income in nearly every case
Yes, that's unfortunately true. It's tragic that so many people, even most of those in the upper middle class, are on a treadmill of their own creation.
Jobs that pay higher salaries are typically located in places with a higher cost of living. For most people, it's extremely unlikely they would be able to live on 15% of their salary. Just reality, not some upper middle class treadmill of their own creation. It's not like someone who earns 50K in a low cost area can live on 7500 a year either.
How many people making $200,000 live as if they make $30,000? I think if you look at all the people you know their spending kind of matches their income in nearly every case.
If 8 times your salary is making people wince your example of needing $900,000 to be able to spend $36,000/year will cause them to jump off a bridge. I realize this is a 4% draw down but SS should also he considered.
Very few of the people I know spend at their income level. Most live very far under it. I would estimate most people I work with save over six figures a year.
It's a combination of low wages at the start of their careers (which we became accustomed to living at) and a past history of an unstable industry that lends itself to layoffs.
You position yourself to weather the downturn by saving in the good times. I've found over time, even while making the most money we've ever made in our lives/careers, we are spending the least amount. A combination of debt payoff and getting rid of things we don't really need like cable TV etc. has allowed our monthly bills to continually be reduced.
Plus, even $200k after taxes/deductions is really only about $100k/yr hitting your bank account. Not really that much money all said and done, unfortunately.
Plus, even $200k after taxes/deductions is really only about $100k/yr hitting your bank account. Not really that much money all said and done, unfortunately.
Where the heck are you that you're being taxed at 50%?! It really should be no more than 40% all things considered even at that income range.
Where the heck are you that you're being taxed at 50%?! It really should be no more than 40% all things considered even at that income range.
Federal, state taxes
Healthcare deductions
401k
Even then we end up owing taxes at the end of the year in the thousands ($3k-$4k normally) and we itemize. Withholding is set at married but higher single rate with 0 for deductions.
Let's say you're currently paying a mortgage but won't have to when you retire. Delete that. Add a bit more for health care. Then subtract SS income. The result is your annual "gap." Multiply that by 24-30 times (or 35-40 to be conservative).
Personally I'm thinking 12x will be plenty to live forever.
(PS, if the denomenator is pre-tax, then so is the numerator.)
Let's say you're currently paying a mortgage but won't have to when you retire. Delete that. Add a bit more for health care. Then subtract SS income. The result is your annual "gap." Multiply that by 24-30 times (or 35-40 to be conservative).
Personally I'm thinking 12x will be plenty to live forever.
(PS, if the denomenator is pre-tax, then so is the numerator.)
I can only speak for myself, but I may need 25X. I live in a high cost area and so I'm a perma-renter. I need that 25X final year's spending level (yes, spending level, which is lower than my salary) because my rent will surely increase over time.
Very few of the people I know spend at their income level. Most live very far under it. I would estimate most people I work with save over six figures a year.
It's a combination of low wages at the start of their careers (which we became accustomed to living at) and a past history of an unstable industry that lends itself to layoffs.
You position yourself to weather the downturn by saving in the good times. I've found over time, even while making the most money we've ever made in our lives/careers, we are spending the least amount. A combination of debt payoff and getting rid of things we don't really need like cable TV etc. has allowed our monthly bills to continually be reduced.
Plus, even $200k after taxes/deductions is really only about $100k/yr hitting your bank account. Not really that much money all said and done, unfortunately.
Man most people you work with save over $100k/yr that's impressive. I would think your average family would need to be clearing $300k+ to make this happen.
401k and healthcare deductions lower your actual taxes and even if they don't because you get nailed by the AMT, they are not even taxes. They are savings and should be counted as part of your savings you do each year.
Very few of the people I know spend at their income level. Most live very far under it. I would estimate most people I work with save over six figures a year.
It's a combination of low wages at the start of their careers (which we became accustomed to living at) and a past history of an unstable industry that lends itself to layoffs.
You position yourself to weather the downturn by saving in the good times. I've found over time, even while making the most money we've ever made in our lives/careers, we are spending the least amount. A combination of debt payoff and getting rid of things we don't really need like cable TV etc. has allowed our monthly bills to continually be reduced.
Plus, even $200k after taxes/deductions is really only about $100k/yr hitting your bank account. Not really that much money all said and done, unfortunately.
Well deductions including 401k is a terrible way at looking at your net pay in your bank account because they are afterall savings. My fed tax rate is in the low teens, FICA is under 7.65% so my tax bill is right around 20%
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