Posters above were saying that "saving" 70k was not that great -- they weren't talking about HHI. |
I reject these values categorically. |
*Saving* $70k/year is great for anyone. Are you kidding? |
This is why I can't understand families whose gross HHI is $100,000 saying they are quite comfortable. They probably save $15,000 a year if they are frugal. That's not a lot to go towards funding a 30 year retirement. |
If you gross 100k, save 15k, and let's assume taxes of 20k, then you're living off of 65k per year after taxes. Saving 15k per year in the stock market will get you about $1.5M (inflation-adjusted) after 30 years of a career. That's enough for $60k per year in retirement, which basically covers your entire lifestyle even before adding in social security and any pensions. (Plus, hopefully, you'll pay off a mortgage during that time and no longer need to spend it in retirement). Tl;dr: saving 15k per year on 100k HHI is actually a solid plan for retirement. |
Saving $15k a year will be close to $3 million over 40 years at 6.5% interest (average investment yield over time is more than 10%, so this number is conservative). Sure, $3 million might only be worth $1 million in today's dollars, but that plus SS will still yield them around $70k. That will be fine. (Don't forget that they won't be saving the $15k, so it's almost equivalent to their pre-retirement income.) |
I'm the PPP below you. I did the same calculation, only over 40 years. Great minds think alike! |
Then by this calculation I should be wealthy in retirement, since I save a lot more than $15,000 a year, have no mortgage even now and spend just over $200,000 a year, much of that on kids who will (presumably) be grown and on their own when I retire. |
If you're spending 200k per year (and you don't even have a mortgage) you need to save much more than the 65k per year family in the hypo. |
But my fixed expenses are about $70,000K so I'm good. |
Oh ok, then yeah sounds like you're pretty good then. I'm guessing expensive private schools accounts for the other $130k? |
It is not much savings for most. I have a decent bond portfolio, it throws off around 80k a year income. I would be spending entire paycheck plus 8k of interest to put away 72k. Plus spending all my rental income And my bonus. |
Most? Do you ever get out of your bubble? |
In my 50s. Three kids. most of my career made @100k. Recently - last 6 years- rose to 400k - (career switch).
I do not feel rich at all. I feel like i finally have some room to breath. But now we are paying down home equity. Maxing out on 401k. Completing long-deferred maintenance on house we have had for 24 years. Might have been different if I had been making this amount for longer. But still seems like i'm still budgeting paycheck to paycheck. Slightly complicated because $150k is in annual bonus used for last three years to pay down debts. Remember you see about 50% of your bonus after taxes. |
Yes, as do most greedy parasites. |