5 ms·

I live in Midtown, make $130k and there’s tons of money left over. I have friends from childhood who live in Brooklyn, make <$40k and do fine by just having som

I live in Midtown, make $130k and there’s tons of money left over. I have friends from childhood who live in Brooklyn, make <$40k and do fine by just having some roommates. The paradox is that NYC, despite having a bunch of expensive stuff, is also very easy to enjoy for cheap due to the public amenities.

drewbeck 4y ago
And $4 egg n cheeses!
- javanissen 4y ago
  Yep. Deli sandwiches and halal cart are surprisingly cheap
zug_zug 4y ago
I know people who "do fine" in NYC making ~40k by which they mean they "pay all their bills." Unfortunately they are NOT on track to have >1.5million saved up by retirement (as is projected to be necessary).
- javanissen 4y ago
  There’s a decent point here, but it’s not insurmountable. If these people lived on $32k net (in today’s dollars) their entire lives, they definitely won’t need $1.5m (in today’s dollars) for retirement. That would generate about $60k (gross) in retirement income. Social security, assuming no future raises (and therefore higher benefits) and a 25% haircut to payout, would cover about $15k. So they’d need $17k in portfolio income, which is a $425k nest egg. Or they could work part time, or get a raise at some point, or delay claiming social security and work longer for a larger benefit. This plan could go wrong. But it also makes a serious of fairly pessimistic assumptions about the person’s entire working career. And it doesn’t require extreme frugality either - the friends I have making <$40k still eat out and go to concerts. There’s this pervasive myth (exemplified by the top-level comment) that moving to a big city is an unmitigated financial disaster that requires an upper-middle class income to defray, and I just don’t think it’s true.
  - zug_zug 4y ago
    yeah I guess that checks out assuming you're committed to never having a family and I guess you won't have much of a safety net. Still to get to a 425 nest-egg starting with nothing in the bank at age 30 requires putting $10k away a year, which is out-of-the-question on $40k in NYC.
    - javanissen 4y ago
      To be fair, committing to never having children is not uncommon among people in my age group (mid-twenties). And I agree - it's a shit plan, but there are a set of relatively pessimistic assumptions embedded in the shit plan as well: - No raises throughout the entire career lifetime - No economy of scale through marriage - Significant SS benefits cut - Never earning another cent in earned income after retiring at the full retirement age of 67 - Living for thirty years after retirement (which is the baseline for the 4% rule; average life expectancy at birth in America in 2021 is an atrocious 76.1 years) - No "extreme" frugality measures - relatively frequent eating out and going to concerts/basketball games - Low real returns on any accrued savings Note that none of this - absolutely none of it - is an argument that America should not expand the safety net, or that we shouldn't fix the housing market. I'm just saying that people with average incomes still have options, even in New York City
- vanilla_nut 4y ago
  Why would you need $1.5M saved up to retire? Even if you live to 100, that still gives you $42,000 a year assuming no interest at all. Most people are lucky to pass 80, which means an expected $100,000 per year during retirement. I know medical bills can be expensive, and of course you need to pay utilities, likely vehicle upkeep, food, etc. but 42 grand minimum per year seems pretty good to me?
  - xwdv 4y ago
    In the year 2063 42k is probably more like $20k today. Just straight poverty.
    - vanilla_nut 4y ago
      If you assume housing is taken care of, $20k today isn't bad at all. That's probably about what I spend before housing, and I'm no hermit. Housing blows that up, though.
  - theandrewbailey 4y ago
    > Most people are lucky to pass 80, which means an expected $100,000 per year during retirement. Everyone wants to beat death. Why would anyone plan to burn all retirement savings out by a set date that one could reasonably live past?

drewbeck 4y ago

And $4 egg n cheeses!

javanissen 4y ago
Yep. Deli sandwiches and halal cart are surprisingly cheap

zug_zug 4y ago

I know people who "do fine" in NYC making ~40k by which they mean they "pay all their bills." Unfortunately they are NOT on track to have >1.5million saved up by retirement (as is projected to be necessary).

javanissen 4y ago
There’s a decent point here, but it’s not insurmountable. If these people lived on $32k net (in today’s dollars) their entire lives, they definitely won’t need $1.5m (in today’s dollars) for retirement. That would generate about $60k (gross) in retirement income. Social security, assuming no future raises (and therefore higher benefits) and a 25% haircut to payout, would cover about $15k. So they’d need $17k in portfolio income, which is a $425k nest egg. Or they could work part time, or get a raise at some point, or delay claiming social security and work longer for a larger benefit. This plan could go wrong. But it also makes a serious of fairly pessimistic assumptions about the person’s entire working career. And it doesn’t require extreme frugality either - the friends I have making <$40k still eat out and go to concerts. There’s this pervasive myth (exemplified by the top-level comment) that moving to a big city is an unmitigated financial disaster that requires an upper-middle class income to defray, and I just don’t think it’s true.
- zug_zug 4y ago
  yeah I guess that checks out assuming you're committed to never having a family and I guess you won't have much of a safety net. Still to get to a 425 nest-egg starting with nothing in the bank at age 30 requires putting $10k away a year, which is out-of-the-question on $40k in NYC.
  - javanissen 4y ago
    To be fair, committing to never having children is not uncommon among people in my age group (mid-twenties). And I agree - it's a shit plan, but there are a set of relatively pessimistic assumptions embedded in the shit plan as well: - No raises throughout the entire career lifetime - No economy of scale through marriage - Significant SS benefits cut - Never earning another cent in earned income after retiring at the full retirement age of 67 - Living for thirty years after retirement (which is the baseline for the 4% rule; average life expectancy at birth in America in 2021 is an atrocious 76.1 years) - No "extreme" frugality measures - relatively frequent eating out and going to concerts/basketball games - Low real returns on any accrued savings Note that none of this - absolutely none of it - is an argument that America should not expand the safety net, or that we shouldn't fix the housing market. I'm just saying that people with average incomes still have options, even in New York City
vanilla_nut 4y ago
Why would you need $1.5M saved up to retire? Even if you live to 100, that still gives you $42,000 a year assuming no interest at all. Most people are lucky to pass 80, which means an expected $100,000 per year during retirement. I know medical bills can be expensive, and of course you need to pay utilities, likely vehicle upkeep, food, etc. but 42 grand minimum per year seems pretty good to me?
- xwdv 4y ago
  In the year 2063 42k is probably more like $20k today. Just straight poverty.
  - vanilla_nut 4y ago
    If you assume housing is taken care of, $20k today isn't bad at all. That's probably about what I spend before housing, and I'm no hermit. Housing blows that up, though.
- theandrewbailey 4y ago
  > Most people are lucky to pass 80, which means an expected $100,000 per year during retirement. Everyone wants to beat death. Why would anyone plan to burn all retirement savings out by a set date that one could reasonably live past?