Do you make $400,000 a year but feel broke?

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:I think that's what's wrong with this society. So many people see maxing out 401 and 529 as luxuries and not necessities! Heck, I don't think maxing out 401k is enough at 17.5k a year.

Good point - in a system where pension plans no longer exist for the vast majority of people, your savings rates are absolutely necessary. People who think maxing out your 401k is a luxury are in for a rude awakening in retirement (which will often culminate in them needing government assistance if they live long enough to see a nursing home or have medical problems).

I think you are remembering back to a golden at of pensions and financial prudence that never existed. We don't max our 401k, and, while it would be nice, I don't feel like we need to, financially. Once we pay off the mortg and student loans, our expenses aren't that high.

It's easy to say your expenses are low when you're young and healthy. The wild card is really your health in retirement. I've seen it unfold both ways - people with low savings who stayed healthy into old age, and people with low savings who didn't. Having gone through the latter, I would not feel comfortable winging it like you're saying, as medical expenses can hit hard and fast in your 70s and 80s.

As for pensions - I know many retirees who have pensions of ~$3k per month off of jobs that paid about $50k annually. Those days are definitely over. It would cost about a million dollars to by an annuity that pays the same, so that's the delta that exists for workers today.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:Ummm….most of the elite private schools were started to separate the wealthy/elite from the masses in the public schools. It's got nothing to do with the financial aid system.

If your view is that independent schools exist for the purpose of educating the wealthy/elite and that's how it should stay, that's fine, but then don't disingenuously make arguments about why families can afford it in situations where it's clearly not rational.

Your argument seems to be that a family making $400k/year should have the same lifestyle as a family earning $800k/year, at least as far as school goes. They should feel the pain of paying for private equally.

How is my example asking them to feel the pain equally?

In the example I'm giving, I'm stating that instead of asking a family to pay 100% of their saveable income (using $120k of saveable income to pay $120k in tuition), perhaps they should be asked to pay 80 or 90% (100 of $120k saveable income). The family on $800k can pay that same $120k and still save another $250k, so they are only being asked to use 30-40% of their saveable income.

Even in my bleeding heart scenario, I'm still asking this hypothetical family to pay double their available resources.

If you think this is weird, why do we have separate tax brackets for the two families?

[Anonymous]

Anonymous wrote:

Anonymous wrote:Ummm….most of the elite private schools were started to separate the wealthy/elite from the masses in the public schools. It's got nothing to do with the financial aid system.

If your view is that independent schools exist for the purpose of educating the wealthy/elite and that's how it should stay, that's fine, but then don't disingenuously make arguments about why families can afford it in situations where it's clearly not rational.

I hadn't previously posted in this thread. I was just baffled by (among many other things about OP) the sense that the financial aid policies are somehow making the schools elitist (or at best, bimodal). To mean "private school" = places like Choate and Deerfield and Exeter and St. Paul's, because I grew up in New England. I guess around here it's St Albans and Sidwell. I'm not counting Catholic or other religious schools, just the elite private schools, and those are, and always have been, elite. The wealthiest have always had the best access to those schools. I have never before heard someone argue (let alone so strenuously) that there should be compulsory financial aid programs, financed by the wealthiest, to make these schools more affordable. It's bizarre.

[Anonymous]

Anonymous wrote:just the elite private schools, and those are, and always have been, elite. The wealthiest have always had the best access to those schools. I have never before heard someone argue (let alone so strenuously) that there should be compulsory financial aid programs, financed by the wealthiest, to make these schools more affordable. It's bizarre.

I actually find it bizarre that people think it's good that the system perpetuates preferred access for the elite.

Let's look at the equivalent schools at the college/university level. 50 years ago someone might have expressed the view that Harvard should exist for the purpose of educating the elite, yet today it strives to support 100% of demonstrated financial need. Do you find it bizarre that Harvard doesn't attempt to exclude populations of students based on financial status (and that this policy was financed by the wealthiest who set in motion a sufficient endowment)? If not, why should the secondary school system strive any differently (assuming the schools have sufficient endowments to do what Harvard does)?

[Anonymous]

You think Harvard is giving financial aid to families that make $400k/year? And that families who make $2m/year pay more? Okie dokie.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:I don't think HHI 400k for a family of 4 should feel broke no matter what high COL area they live in, but I really don't think it's that much money, and can easily be spent if not careful. Our HHI is around 300k and we can max out our retirement and college savings and still go on 2 vacations/year and eat out once in awhile. We drive our 10+ year old Hondas to the ground and are careful with what we buy. With daycare, student loans, mortgage on a modest house, insurances, daily living expenses, it all quickly goes. Our luxuries are we get to spend 10k on traveling, eat out 1-2x a week, max out 401ks, and contribute 24k/yr to 529s, but that's really it.

the bolded part really says it all.

I wanted to respond similarly, but I just can't type that well with my head exploding.

I still don't think it's as much as people make it out to be. To me, it's higher end of middle class because saving for 529 and retirement really shouldn't be counted as luxuries. We save on a modest house, cheap clothes, old but functional cars to travel and eat out a bit more. I'm not sure why you people think that's so much. What are your expectations for a middle class family?

But they are luxuries, especially when you are saving to the tune of 100k per year. You make 8X as much as the national median income. EIGHT! And don't use the DC area as an excuse, it was only 64k during the last census. You are the biggest dolt I've ran into on DCUM, and that is saying something.

You should just come out and say, I care more about saving 100k a year than I do about sending my kids to private school. There is nothing wrong with that decision, unless of course you whine that 400k is middle class and that you deserve a private school subsidy.

I agree they are luxuries that the majority are unable to afford.

I think it is interesting that your head is exploding when they are describing a middle class lifestyle. What your grandparents took for granted in the 1950s.

now I'm laughing my ass off - their life is NOTHING like my grandparents life in the 50s

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:Ummm….most of the elite private schools were started to separate the wealthy/elite from the masses in the public schools. It's got nothing to do with the financial aid system.

If your view is that independent schools exist for the purpose of educating the wealthy/elite and that's how it should stay, that's fine, but then don't disingenuously make arguments about why families can afford it in situations where it's clearly not rational.

Your argument seems to be that a family making $400k/year should have the same lifestyle as a family earning $800k/year, at least as far as school goes. They should feel the pain of paying for private equally.

How is my example asking them to feel the pain equally?

In the example I'm giving, I'm stating that instead of asking a family to pay 100% of their saveable income (using $120k of saveable income to pay $120k in tuition), perhaps they should be asked to pay 80 or 90% (100 of $120k saveable income). The family on $800k can pay that same $120k and still save another $250k, so they are only being asked to use 30-40% of their saveable income.

Even in my bleeding heart scenario, I'm still asking this hypothetical family to pay double their available resources.

If you think this is weird, why do we have separate tax brackets for the two families?

Because private school isn't the government.

NP here. You have a weird sense of entitlement to a private school education. You remind me of one of my college roommates. Both her parents were doctors, she lived in a huge house on Long Island, brought more clothes with her than I had ever owned in my whole life, and yet managed to qualify for a work-study job. Plenty of other families made sacrifices and paid full freight. It's obnoxious to spend your money and expect others to pay for your kids schooling.

[Anonymous]

Anonymous wrote:

Anonymous wrote:just the elite private schools, and those are, and always have been, elite. The wealthiest have always had the best access to those schools. I have never before heard someone argue (let alone so strenuously) that there should be compulsory financial aid programs, financed by the wealthiest, to make these schools more affordable. It's bizarre.

I actually find it bizarre that people think it's good that the system perpetuates preferred access for the elite.

Let's look at the equivalent schools at the college/university level. 50 years ago someone might have expressed the view that Harvard should exist for the purpose of educating the elite, yet today it strives to support 100% of demonstrated financial need. Do you find it bizarre that Harvard doesn't attempt to exclude populations of students based on financial status (and that this policy was financed by the wealthiest who set in motion a sufficient endowment)? If not, why should the secondary school system strive any differently (assuming the schools have sufficient endowments to do what Harvard does)?

Harvard has billions in endowments. The Big 3 don't.

[Anonymous]

Anonymous wrote:

Anonymous wrote:just the elite private schools, and those are, and always have been, elite. The wealthiest have always had the best access to those schools. I have never before heard someone argue (let alone so strenuously) that there should be compulsory financial aid programs, financed by the wealthiest, to make these schools more affordable. It's bizarre.

I actually find it bizarre that people think it's good that the system perpetuates preferred access for the elite.

Let's look at the equivalent schools at the college/university level. 50 years ago someone might have expressed the view that Harvard should exist for the purpose of educating the elite, yet today it strives to support 100% of demonstrated financial need. Do you find it bizarre that Harvard doesn't attempt to exclude populations of students based on financial status (and that this policy was financed by the wealthiest who set in motion a sufficient endowment)? If not, why should the secondary school system strive any differently (assuming the schools have sufficient endowments to do what Harvard does)?

What "system"? Capitalism? Because you're talking about something that is not regulated or government supported in any way (unlike, say, college, where persons attending public or private school have equal access to federal loan assistance and grants).

[Anonymous]

Anonymous wrote:NP here. You have a weird sense of entitlement to a private school education. You remind me of one of my college roommates. Both her parents were doctors, she lived in a huge house on Long Island, brought more clothes with her than I had ever owned in my whole life, and yet managed to qualify for a work-study job. Plenty of other families made sacrifices and paid full freight. It's obnoxious to spend your money and expect others to pay for your kids schooling.

This is yet another straw man argument. Nobody is saying your roommate should have gotten aid.

[Anonymous]

Anonymous wrote:

Anonymous wrote:NP here. You have a weird sense of entitlement to a private school education. You remind me of one of my college roommates. Both her parents were doctors, she lived in a huge house on Long Island, brought more clothes with her than I had ever owned in my whole life, and yet managed to qualify for a work-study job. Plenty of other families made sacrifices and paid full freight. It's obnoxious to spend your money and expect others to pay for your kids schooling.

This is yet another straw man argument. Nobody is saying your roommate should have gotten aid.

How is it different than your argument that a family making $400k a year should get aid for private school? Either spend less money, or go to a cheaper school.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:just the elite private schools, and those are, and always have been, elite. The wealthiest have always had the best access to those schools. I have never before heard someone argue (let alone so strenuously) that there should be compulsory financial aid programs, financed by the wealthiest, to make these schools more affordable. It's bizarre.

I actually find it bizarre that people think it's good that the system perpetuates preferred access for the elite.

Let's look at the equivalent schools at the college/university level. 50 years ago someone might have expressed the view that Harvard should exist for the purpose of educating the elite, yet today it strives to support 100% of demonstrated financial need. Do you find it bizarre that Harvard doesn't attempt to exclude populations of students based on financial status (and that this policy was financed by the wealthiest who set in motion a sufficient endowment)? If not, why should the secondary school system strive any differently (assuming the schools have sufficient endowments to do what Harvard does)?

Harvard has billions in endowments. The Big 3 don't.

I think the Big 3 can afford to give a $2,500 to $5,000 per student grant to a family sending four kids through and paying $100+k per year in tuition if that family has some economic need.

As for Harvard, it has that endowment because it has done for decades what I'm suggesting the Big 3 should strive to do as well.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:NP here. You have a weird sense of entitlement to a private school education. You remind me of one of my college roommates. Both her parents were doctors, she lived in a huge house on Long Island, brought more clothes with her than I had ever owned in my whole life, and yet managed to qualify for a work-study job. Plenty of other families made sacrifices and paid full freight. It's obnoxious to spend your money and expect others to pay for your kids schooling.

This is yet another straw man argument. Nobody is saying your roommate should have gotten aid.

How is it different than your argument that a family making $400k a year should get aid for private school? Either spend less money, or go to a cheaper school.

Because your roommate wasn't in a situation where her parents were asked to allocate 100% of their saveable income (in a situation with no accumulated wealth, unlike your roommates' parents) towards 4 tuition payments - to the point of not even funding her parent's 401k.

Let's assume that the family on Sister Wives makes $400k pretax. Your position is that each of their kids are entitled brats if they seek a dime of financial aid because $400k can support unlimited tuition payments, full stop?

All of these examples are relative - in the vast majority of cases, a family with $400k HHI would not need any aid. But there are certainly rare circumstances when it would be justifiable.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:just the elite private schools, and those are, and always have been, elite. The wealthiest have always had the best access to those schools. I have never before heard someone argue (let alone so strenuously) that there should be compulsory financial aid programs, financed by the wealthiest, to make these schools more affordable. It's bizarre.

I actually find it bizarre that people think it's good that the system perpetuates preferred access for the elite.

Let's look at the equivalent schools at the college/university level. 50 years ago someone might have expressed the view that Harvard should exist for the purpose of educating the elite, yet today it strives to support 100% of demonstrated financial need. Do you find it bizarre that Harvard doesn't attempt to exclude populations of students based on financial status (and that this policy was financed by the wealthiest who set in motion a sufficient endowment)? If not, why should the secondary school system strive any differently (assuming the schools have sufficient endowments to do what Harvard does)?

Harvard has billions in endowments. The Big 3 don't.

I think the Big 3 can afford to give a $2,500 to $5,000 per student grant to a family sending four kids through and paying $100+k per year in tuition if that family has some economic need.

As for Harvard, it has that endowment because it has done for decades what I'm suggesting the Big 3 should strive to do as well.

Then you know nothing about private school finances.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:NP here. You have a weird sense of entitlement to a private school education. You remind me of one of my college roommates. Both her parents were doctors, she lived in a huge house on Long Island, brought more clothes with her than I had ever owned in my whole life, and yet managed to qualify for a work-study job. Plenty of other families made sacrifices and paid full freight. It's obnoxious to spend your money and expect others to pay for your kids schooling.

This is yet another straw man argument. Nobody is saying your roommate should have gotten aid.

How is it different than your argument that a family making $400k a year should get aid for private school? Either spend less money, or go to a cheaper school.

Because your roommate wasn't in a situation where her parents were asked to allocate 100% of their saveable income (in a situation with no accumulated wealth, unlike your roommates' parents) towards 4 tuition payments - to the point of not even funding her parent's 401k.

Let's assume that the family on Sister Wives makes $400k pretax. Your position is that each of their kids are entitled brats if they seek a dime of financial aid because $400k can support unlimited tuition payments, full stop?

All of these examples are relative - in the vast majority of cases, a family with $400k HHI would not need any aid. But there are certainly rare circumstances when it would be justifiable.

You act as though the amount people save is fixed. That it can't be changed by other spending. I would fully expect a family to cut back on everything else if they are asking for financial aid. Including housing, cars and savings. Financial aid isn't to subsidize a lifestyle.