Make 350k-400k, feel middle class

[Anonymous]

Anonymous wrote:Student loans, retirement, taxes..where does it all go!?

See a therapist. This is a problem with what's going on in your head, not your bank account.

Sorry, OP.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:We earn about 350k a year, and I feel completely middle class at this stage of life with 2 young kids in daycare, student loans, retirement college savings, and mortgage. Although our lifestyle is middle class, our savings are not. Between pretax and posttax savings, we probably sock away 90k a year.

You have $90k in savings a year AFTER two daycares / mortgage / retirement savings / college savings and feel "completely middle class"? I just can't even wrap my head around this.

Well he did say "although our lifestyle is middle class, our savings are not". I think he recognizes that the savings numbers he's throwing out are huge.

We are at $290 and save about $70k, plus pay down about $10k a year in debt plus have investments that throw off $30 or $40k in FCF. Like the prior poster our life is very middle class.... But our savings are not.

Which NECESSARILY BY DEFINITION makes you NOT middle class. Jesus. We make about double what you make and we save much, much more. But at least I'm intelligent enough not to go around whining that I'm ONLY driving a 45k car and not a 90k car. FFS.

+1
LOL

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:$350-400K in this area *is* middle class.

Call it "upper middle class" if you like. It's not upper class.

We have doubled our income in the past 5 years. From just under $200K to just under $400K. How has life changed for us?
- regular expenses are covered as a matter of course (don't have to be constantly checking the bank balance to make sure there's enough to cover)
- we are now saving for college (on track to cover in-state tuition for our 2 kids)
- our cleaner comes every week instead of every other week
- we are taking more vacations (long weekends here and there in addition to longer August vacation)
- unexpected expenses can be handled fairly easily (the new roof gets paid for out of savings and we don't feel the pinch)

Seriously, that's about it. We are still driving the same cars. Kids still in public school. We are endlessly debating whether to move up from our 2200sq ft house but afraid to double the size of our mortgage (that's what it would take to stay inbounds for our current schools). We pay mega amounts of taxes (federal and state). We do NOT anticipate retiring at 55 with $5m in the bank. Definitely not on track for that.

I think this post is very accurate and describes us as well. We also doubled our income (from $180K to $360K) in the past 5 years (when one parent went back to work and the other got an increase in pay). I would have rolled my eyes to the heavens if you had told me when we were making $180K that $360K wouldn't really change our lifestyle much. But really, it hasn't. We do have a good deal more breathing room. We're now able to save adequately for retirement and college--as it we'll actually have a few million saved for retirement and will probably be able to pay for state school for the kids. We don't stress out about having an occasional sitter or night out. When the air conditioner compressor breaks like it did this week we don't have to stay up late worrying about how to replace it. However, we're by no means able to upgrade to the next level of house or buy luxury clothing or a beach house. Not that I expect to or need to obtain any of those things in my lifetime. But they are certainly still out of our reach.

Those who are saying that they "save" for retirement and college on incomes of $80K or $150K (both mentioned before in this post) may be saving but it's simply not possible that they're saving anywhere near enough (especially if they live in the DC area). The $80K poster would have to be saving half of their yearly income to do so. So to say, "I can have it all on $80K, what are you doing with $300K?" is silly. Most of us are doing exactly what we did on $80K with far more breathing room and a much better ability to save.

Sure, but if you can get by on the oh-so-paltry sum of $80k, you don't NEED to save at the stratospheric rates of someone who feels $300k is necessary for an adequate lifestyle.

+1

How are you planning to generate $80K gross income in retirement? Rule of thumb is you need $1 million invested for each $50K of income. With a 80K HHI, you're going to save $1.6 million over your lifetime? Or, realistically, are you going to live on nothing but Social Security? If so, how is that a middle class retirement?

Not the PP, but with the home paid off and kids out of the house I am not sure why would I need 80k a year in addition to SS.

[Anonymous]

This is all quite interesting to hear. We're at 200K and feel very comfortable and fortunate, and feel towards upper end of middle class (though definitely are among the lower income bracket in our suburb). Our jobs are stress-free, with no long hours or required travel. We feel like we can take vacations anywhere. We save for college and retirement. When credit card bill exceeds checking account, we dip into savings / investments. We're pretty simple in our day-to-day living though, rarely clothes shop, don't mind driving 8-year-old cars, etc. I see no need for us to make any more, frankly. Can't imagine making double this amount.

[Anonymous]

Anonymous wrote:This is all quite interesting to hear. We're at 200K and feel very comfortable and fortunate, and feel towards upper end of middle class (though definitely are among the lower income bracket in our suburb). Our jobs are stress-free, with no long hours or required travel. We feel like we can take vacations anywhere. We save for college and retirement. When credit card bill exceeds checking account, we dip into savings / investments. We're pretty simple in our day-to-day living though, rarely clothes shop, don't mind driving 8-year-old cars, etc. I see no need for us to make any more, frankly. Can't imagine making double this amount.

When did you buy your first house

[Anonymous]

Anonymous wrote:And I guess we've been investing in all the wrong things, since we have no FCF from any of them! Are you and/or your husband an investment person? What is it that you invest in?

High dividend stocks mostly. They "throw off" a decent amount every year.

[Anonymous]

What is a monthly take home after taxes/401k on $350,000-$400,000?

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:$350-400K in this area *is* middle class.

Call it "upper middle class" if you like. It's not upper class.

We have doubled our income in the past 5 years. From just under $200K to just under $400K. How has life changed for us?
- regular expenses are covered as a matter of course (don't have to be constantly checking the bank balance to make sure there's enough to cover)
- we are now saving for college (on track to cover in-state tuition for our 2 kids)
- our cleaner comes every week instead of every other week
- we are taking more vacations (long weekends here and there in addition to longer August vacation)
- unexpected expenses can be handled fairly easily (the new roof gets paid for out of savings and we don't feel the pinch)

Seriously, that's about it. We are still driving the same cars. Kids still in public school. We are endlessly debating whether to move up from our 2200sq ft house but afraid to double the size of our mortgage (that's what it would take to stay inbounds for our current schools). We pay mega amounts of taxes (federal and state). We do NOT anticipate retiring at 55 with $5m in the bank. Definitely not on track for that.

I think this post is very accurate and describes us as well. We also doubled our income (from $180K to $360K) in the past 5 years (when one parent went back to work and the other got an increase in pay). I would have rolled my eyes to the heavens if you had told me when we were making $180K that $360K wouldn't really change our lifestyle much. But really, it hasn't. We do have a good deal more breathing room. We're now able to save adequately for retirement and college--as it we'll actually have a few million saved for retirement and will probably be able to pay for state school for the kids. We don't stress out about having an occasional sitter or night out. When the air conditioner compressor breaks like it did this week we don't have to stay up late worrying about how to replace it. However, we're by no means able to upgrade to the next level of house or buy luxury clothing or a beach house. Not that I expect to or need to obtain any of those things in my lifetime. But they are certainly still out of our reach.

Those who are saying that they "save" for retirement and college on incomes of $80K or $150K (both mentioned before in this post) may be saving but it's simply not possible that they're saving anywhere near enough (especially if they live in the DC area). The $80K poster would have to be saving half of their yearly income to do so. So to say, "I can have it all on $80K, what are you doing with $300K?" is silly. Most of us are doing exactly what we did on $80K with far more breathing room and a much better ability to save.

Sure, but if you can get by on the oh-so-paltry sum of $80k, you don't NEED to save at the stratospheric rates of someone who feels $300k is necessary for an adequate lifestyle.

+1

How are you planning to generate $80K gross income in retirement? Rule of thumb is you need $1 million invested for each $50K of income. With a 80K HHI, you're going to save $1.6 million over your lifetime? Or, realistically, are you going to live on nothing but Social Security? If so, how is that a middle class retirement?

Not the PP, but with the home paid off and kids out of the house I am not sure why would I need 80k a year in addition to SS.

Exactly. Most retirement calculators start you off at replacing 70% of income. This is high if you're already used to living below your means and if you pay off your house before retirement. Frugal types can get by with 50% or less, though this must seem like horrifying poverty to most of DCUM.

[Anonymous]

Anonymous wrote:What is a monthly take home after taxes/401k on $350,000-$400,000?

15,000

[Anonymous]

Anonymous wrote:This is all quite interesting to hear. We're at 200K and feel very comfortable and fortunate, and feel towards upper end of middle class (though definitely are among the lower income bracket in our suburb). Our jobs are stress-free, with no long hours or required travel. We feel like we can take vacations anywhere. We save for college and retirement. When credit card bill exceeds checking account, we dip into savings / investments. We're pretty simple in our day-to-day living though, rarely clothes shop, don't mind driving 8-year-old cars, etc. I see no need for us to make any more, frankly. Can't imagine making double this amount.

We feel the same way. We make $150K per year single earner. No daycare costs and parents paid for undergrad so no student loan debt. We fully fund our retirement - $17.5K in 401k plus $11K in IRAs. Three kids in public in good school pyramid in Vienna. We did luck out on buying our house in 2000, although it is an older, smaller home - only 1900 square feet. But I'd say that's the only compromise, and we actually like it because it has a big yard. Otherwise we are quite comfortable and feel upper middle class in that salary range. We've got $800K saved for retirement and $200K in kids' college savings fund. We take two vacations each year (albeit driving ones). Our cars are fully paid for and they are 2 and 3 years old. No complaints here. I don't buy fancy handbags. My last one was $24.99 and came from Ross.

[Anonymous]

Anonymous wrote:

Anonymous wrote:What is a monthly take home after taxes/401k on $350,000-$400,000?

15,000

We make ~325K and are pulling in 15K while fully funding two 401K plans. I think it's probably closer to 17-18K for most folks.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:What is a monthly take home after taxes/401k on $350,000-$400,000?

15,000

We make ~325K and are pulling in 15K while fully funding two 401K plans. I think it's probably closer to 17-18K for most folks.

I think it may be less because of other payments people are forgetting - we pay 1200/month pretax in health care, plus max for FSA pretax (2500/year I think), plus max for child care pre tax (5000/k per year). We're the 400K in student loan debt posters. Two lawyers. And yes, to answer a PPs question, this is how much it now costs to attend law school. And no, not a lot of extra money (all extra goes to the loans)

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:What is a monthly take home after taxes/401k on $350,000-$400,000?

15,000

We make ~325K and are pulling in 15K while fully funding two 401K plans. I think it's probably closer to 17-18K for most folks.

I think it may be less because of other payments people are forgetting - we pay 1200/month pretax in health care, plus max for FSA pretax (2500/year I think), plus max for child care pre tax (5000/k per year). We're the 400K in student loan debt posters. Two lawyers. And yes, to answer a PPs question, this is how much it now costs to attend law school. And no, not a lot of extra money (all extra goes to the loans)

Could be. We don't have nearly as much health care costs and don't do the FSA, so people with those would def have less take home.

[Anonymous]

We put in max for FSA and I think it is 6000/year.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:What is a monthly take home after taxes/401k on $350,000-$400,000?

15,000

We make ~325K and are pulling in 15K while fully funding two 401K plans. I think it's probably closer to 17-18K for most folks.

I think it may be less because of other payments people are forgetting - we pay 1200/month pretax in health care, plus max for FSA pretax (2500/year I think), plus max for child care pre tax (5000/k per year). We're the 400K in student loan debt posters. Two lawyers. And yes, to answer a PPs question, this is how much it now costs to attend law school. And no, not a lot of extra money (all extra goes to the loans)

Why are you guys making yourselves miserable with the self-imposed 10 year plan? You will never be able to borrow money cheaper than the rate on your federally backed loans. Wouldn't it make more sense to put the extra cash into savings or to give a little breathing room?