Dr. Doctor said:

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themissinglink said:

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$100k likely feels like middle class given that most of this forum's peer group is college educated. It is the median household income for those with a bachelors degree.

Median household income in the United States in 2019, by educational attainment of householder


America's middle-class is disappearing…. but it's because they're moving up, NOT down!

I remember hitting $100k being single, no mortgage, and no significant debt feeling like it was pretty easy to have a huge savings rate. Now married, 2 kids, and a mortgage, a household income of $100k would probably be living paycheck to paycheck with little going to retirement savings. Even assuming both partners make $100k (household income of $200k), living in a decent area with 2 kids in daycare would be comfortable but doesn't really go that far.

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I disagree with the notion that the middle class is moving up. Mostly because their original graphic probably only had ONE breadwinner and ONE stay at home parent. Now you have TWO breadwinners making the same amount of money. Is that better for the economy or no? I would also argue that while there are 2 breadwinners, there is a difference between the two. A husband works for a engr firm making $125k and the wife works as an aide or at the elementary school, making $45k a year. Both are college educated, but one actually needs the degree; the other does not. Factor in debt and lifestyle, there is a reason the wife HAD to go back (beyond the wants to go back argument).

And in my own experience, the two people working can make the lifestyle creep much more pronounced than you'd expect. Both working, no time to grocery shop or cook, so you eat out all the time. Since you eat out all the time, you gain weight and need a gym to work out to burn the weight off (or join WW or get expensive bikes...)

~egon

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Even if the increase in households over $100k is due to two income families (likely a large part of it), that doesn't mean the middle class isn't moving up. A middle class lifestyle today is more glamorous than is was 40-50 years ago. Bigger houses, better cars, more/better vacations, etc. Just because the additional income earned by the middle class is consumed, doesn't mean it the middle class isn't improving.

Is it better for the economy? Yes, because it increases output.

Is it worth it? That's for each family to decide.

https://www.peoplespolicyproject.org/2019/05/06/the-two-income-trap-stuff-is-clearly-incorrect/

themissinglink said:

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$100k likely feels like middle class given that most of this forum's peer group is college educated. It is the median household income for those with a bachelors degree.

Median household income in the United States in 2019, by educational attainment of householder


America's middle-class is disappearing…. but it's because they're moving up, NOT down!

I remember hitting $100k being single, no mortgage, and no significant debt feeling like it was pretty easy to have a huge savings rate. Now married, 2 kids, and a mortgage, a household income of $100k would probably be living paycheck to paycheck with little going to retirement savings. Even assuming both partners make $100k (household income of $200k), living in a decent area with 2 kids in daycare would be comfortable but doesn't really go that far.

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Seems like the number everyone is looking for is for individuals, not households since that includes a lot of 2 salary households

YouBet said:

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DRE06 said:

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Having $1mm at 40 excluding home equity is putting him on path for a very comfortable retirement. Of course not enough to retire on today, but a great investment base to build more wealth on through 40s & 50s. Should probably easily be $4mm+ by age 60.

Great work, especially on not a huge income. Probably millions of people on similar income with nothing in savings.

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I'm not disputing that and I was overly harsh. Most people have nothing in savings so $1M is impressive with that AGI. Pound for pound its especially impressive.

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Not overly harsh! I've made some good investments, including rental property, which is something I feel everyone should look at. We are on track to be comfortable, not rich, but I didn't disclose earlier that my employer offers a pension that will start at age 62. And I'm not at $1m yet, especially with a possible 10% pullback on the horizon in Q4.

6 figures still means something, but it doesn't mean that you've "made it" like it used to. That's probably more like 250k when you consider how living standards and inflation have grown. If you're making 250k, you're probably very established in your career with high visibility in your industry, and making that much for 10 years allows you to be quite established financially if you are reasonably disciplined.

You are not doing anything wrong. I was alittle higher than the 250K for many years and at the end of the year I feel like we were living month to month some times.

Even at 300K, taxes (property, fed) takes about 100K so left with 200K to spend. Put 50K into sep IRA brings it down to 150K to spend. 3 Kids private school and associated costs 50K.

100K to spend is still alot but some months get tight.

Stop looking at all those watches dude!

ill never stop looking!

In reality, you are probably so far ahead of the vast majority of those people it would blow your mind. The average nest egg for people in their 40s is something abysmal like $100k.

We are rapidly approaching a point in this country where most people are going to want to retire...and they can't. They simply won't have enough saved to do it. My mom was a CPA and had several clients over the years who would approach her in their late 50s and early 60s all happy to talk to her about retiring....only to discover they couldn't because they had little to nothing in savings. And these are high earning people with mucho cash flow while working but they spend it all.

It's amazing the number of financially ignorant people there are out there that think they can just walk away from work and live on zero cash flow with zero savings. Most people do not know how to do a basic budget, manage it, or plan ahead.

Just google "average 401k by age" and the numbers are astounding.

I got started about 5 years too late (late 20s...$50K salary in uptown + going out nightly, etc). I missed out on good and valuable years. But the numbers they show are astoundingly low and you wonder what is going to give in the future....

Yep, making $100K in SF, LA, NYC and you'll have to live in an RV or mobile home.

Incredible.

And likely....that 401k balance is the ONLY savings these people have.

Many on here, while we are a more fortunate / hard working demographic than average, can often have balances in after-tax accounts not too far off from what are in 401k, etc.

Then think about it...these families....they will send their kids to college but have no way to pay for it. More debt.

Its really hard to stomach....

planoaggie123 said:

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Incredible.

And likely....that 401k balance is the ONLY savings these people have.

Many on here, while we are a more fortunate / hard working demographic than average, can often have balances in after-tax accounts not too far off from what are in 401k, etc.

Then think about it...these families....they will send their kids to college but have no way to pay for it. More debt.

Its really hard to stomach....

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Yep, it looks like between median savings account balance and 401k, most "retirement age" people will have around $80k plus social security to see them through the next 20 or so years. That's pretty lean.

Yea a lot of my insecurity comes from the fact that I got a late start by not graduating college until i was 27 and having to take out loans to do so so I feel like I have started from behind. I dont want to work until I'm 70 and it scares me to think that I may have to, especially with the way things seem to be headed now.

I've often compared myself to so many on this board when looking at my net worth when reading some of the threads about retirement savings and what not, which I know is absolutely skewed and not good for my sanity. I do feel better when I look at national averages though, which are scary. When its my time to retire I'm probably going to have to help support my neighbor who didn't do any saving at all.

I'm trying to make a career switch as well which ultimately would basically be an annual windfall but id make a quarter to half what I make now for several years almost certainly with a need to move thrown in so that unknown kind of keeps me up at night as well. Really having kids has changed my calculus and risk tolerance and the rising costs of living and tumultuous times have me concerned with the next several years. If I am not able to make the career change I'm striving for I may be stuck having to travel for work for much longer than I would like to, and that is something that weighs on me heavily. I guess I could just have said "I'm scared of the unknown".

LOL look at national averages and you may just want to go buy a Ferrari....

I heard that you guys like hyperinflation currencies !? Enjoy ! 👀 @BitcoinRants pic.twitter.com/UmdcghcsdQ

— David St-Onge (@DavidStOnge) September 14, 2021

Not sure average 401k is a great number. Due to job changes and the like I think my wife and I have $9k in 401k, but seven figures in IRA and other investments.

I'm very worried for the future as well as my finances. I just don't see them not coming after those of us responsible to fund this. SS, even if around, provides near nothing. Will we just continue working into 70s?

My goal is to retire in 8 years from full time work. Then I'd either consult or get paid to perform my magic hobby. I'm currently thinking cruise magician would be a fun way to spend some semi retirement.

ORAggieFan said:

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Not sure average 401k is a great number. Due to job changes and the like I think my wife and I have $9k in 401k, but seven figures in IRA and other investments.

I'm very worried for the future as well as my finances. I just don't see them not coming after those of us responsible to fund this. SS, even if around, provides near nothing. Will we just continue working into 70s?

My goal is to retire in 8 years from full time work. Then I'd either consult or get paid to perform my magic hobby. I'm currently thinking cruise magician would be a fun way to spend some semi retirement.

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This scares me too a bit.

I just feel like they will ultimately take from us whatever they need....i dont see it mattering if you own it in stock, cash, gold, bitcoin....

I do put some into both taxable and non-taxable....but I dont know that it matters, again, for the reason of "they will take what the need". They will change the laws and tax and tax and tax and tax....

I'll just echo everything said about inflation. I usually don't worry about stuff like that (because I can't control it). But when I went in the grocery a couple of weeks ago and the salmon I always buy had jumped from $15 (for 4 filets) to $18, that caught my attention.

My biggest expenses (even though they are less than 1/2 of my monthly income) are mortgage, taxes, and insurance (including auto - I've got a teenaged driver so it's $$$). My property taxes have pretty much been flat since I bought this house 9 years ago, but I'm expecting the full 10% increase next year, thanks to the ridiculous sales this summer. Insurance goes up every year, and with the increases in parts and supplies and shortages, I expect those to increase significantly, too.

We also like to travel, and those prices, particularly for domestic travel, are inflated right now, too.

Thankfully, I only have one kid. I couldn't do it if I had more. Well, I could, but not anywhere close to my current lifestyle. We'd have to cut back significantly. And we don't live extravagantly.

Fingers crossed my kid gets a scholarship to college. He already qualifies for close to a full ride at my alma mater. If it was good enough for his dad and me, it's good enough for him. And he just took the SAT for the first time, so there is room for improvement.

I'm not worried so much about my retirement savings…I'm good there. But I do worry about cash on hand. Always have and always will. It's a fine line between wanting to invest to grow wealth and wanting to bury my cash in the backyard.

Hoping for a promotion next year to give me another bump. But I doubt it will net me more than a 5% increase, and that's factoring in the annual merit raise we get.

I don't expect to ever hit $200k (maybe the last couple of years before I retire, if I'm lucky), so I'll be living in this same spot for another 12-ish years. I alternate between feeling very fortunate to be in this position and being terrified that it's not enough.

The Silverback said:

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I never understood the people who penny pinched their entire lives only to amass enough to retire by 60 and then live on fixed income the rest of their lives. It seems to me, all the effort and planning it took to live a disciplined and frugal life could have been used towards earning more income instead. Obviously personal choice and everyone is different but to me it seems so daunting to worry about where you will eat, vacations, coupons, vehicles, housing, etc etc on a day to day basis. If that energy was spent towards increasing income it seems you would be better off, not only during the journey but long term as well.

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Who's talking about doing that here?

ORAggieFan said:

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The Silverback said:

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I never understood the people who penny pinched their entire lives only to amass enough to retire by 60 and then live on fixed income the rest of their lives. It seems to me, all the effort and planning it took to live a disciplined and frugal life could have been used towards earning more income instead. Obviously personal choice and everyone is different but to me it seems so daunting to worry about where you will eat, vacations, coupons, vehicles, housing, etc etc on a day to day basis. If that energy was spent towards increasing income it seems you would be better off, not only during the journey but long term as well.

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Who's talking about doing that here?

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Not to be disrespectful for the person who said they never made more than $90k AGI and still saved $1M by their forty's, but they obviously lived a extremely frugal life to get there and kudos for them having the discipline. But just seems that takes so much work and energy to live that way as opposed to transferring that same work, energy and discipline to increasing their income instead. And not calling them out as I feel a vast amount of people are the same way, so somewhat of a general statement/observation as well.

And then their lifepartner dies and their kids shove them into a home. Great life story played out by any number of my aging customers year after year [appliances].

Yea I'm not sure how people who want to save but have pretty defined income limits are supposed to just work harder at making more instead of doing what they can within their means. Also what is the opportunity cost? I (and I'm sure many others here) could work harder at making more, but I would sacrifice invaluable family time and the additional income wouldn't be worth it in the slightest. I only get one go with my young children and the time is already so fleeting.