Reply to NYC law partner w/ kids: "$850K gross is not enough to live on"

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Reply to "NYC law partner w/ kids: "$850K gross is not enough to live on""

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[quote=Anonymous][quote=Anonymous][quote=Anonymous][quote=Anonymous][quote=Anonymous][quote=Anonymous][quote=Anonymous]Oh man . . . I walked away from thus thread for a few hours and look what happened. Anyway, my kid goes to HM, and neither DH nor I are tycoons. We know plenty of kids from his private K-8 who chose SHSAT schools (and Beacon and Laguardia) over private high schools. I have yet to hear of any who regretted that choice.[/quote]

Horace Mann tuition is $64K a year. You don't have to be a tycoon but to live in NYC and sent your kid to HM, you are still a pretty successful person. Reddit OP has 3 kids. Paying $200K combined for school tuition annually isn't feasible, even for a $850K earner. She totally gets this, but she is sucked into her Big Law bubble where she is comparing herself to all the other partners who do send their kids to private. But they probably don't have 3 kids, maybe a partner who also makes good money, potentially rich parents, and maybe bought property sooner. I don't have any sympathy for her but she can complain.  [/quote]

Why isn't it feasible to pay for private for three?  It certainly will take up a massive chunk of her after-tax income, but seem like she will still have plenty to live on. [/quote]

Uh, assuming lets say a 40% tax rate all in, that's $510 left over. Minus $200 for tuition is $310. Rent will be $10K, owning maybe $15K, so let's say $12K or $144K a year. That leaves $166K or $14K a month. It's not a huge amount for living, retirement, and savings. [/quote]

Look at it like this -- yes 40% taxes so you are at 510.  She gets a draw of 21 a month. so 510-252 leaves 258.  Then take out 401k and profit sharing 23.5 and 70 plus the defined benefit plan at 50.  That is 143.5 leaving 114.5.  401k is a choice -- at many firms profit sharing and defined benefit are not.  From the 114.5 take out interest on the loan that funds capital.  Probably 20.  96.5 is left.  Then life insurance and disability which are often mandatory --- probably 7.5.  That remaining 89 then has 40 coming out for health insurance so that leaves 49 that is often distributed 6 months to a year and a half after the end of the year.  49 is not going to pay 3 tuitions and neither is the 21 draw that just keeps your head above water.  Also, a bad year and that 49 is 20.  A great year and maybe it is 75.

No one should be crying.  Great savings for retirement.  Lots of insurance.  Only way out is to make more money.  Add to points or shares.  She will likely go up as time goes on.  1.5 million would be a normal amount for a partner with a little work who is busy.  These numbers then change a lot.

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All of this. It’s crazy how much $850K can get whittled down in a place like NYC and in an industry like law or medical practice where you own the firm and thus need to pay everything for yourself. [/quote]

Why is it “crazy”? [/quote]

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