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$60-100k salary is not enough to support a family and retire; it's probably not enough for a single person to make meaningful progress towards retirement becaus

$60-100k salary is not enough to support a family and retire; it's probably not enough for a single person to make meaningful progress towards retirement because at that level of pay home ownership is constantly out of reach and inflation outpaces wage growth. It's sacrificing your life so someone else can get rich.

neogodless 3y ago
In today's environment, home prices really seem to be getting nuts. As I said, anyone in software is likely making over $100K. A $500K house with 20% down would have a P&I payment of $2,715 / month (at 7.2%, plus taxes/insurance.) That's less than $33K / year. (I bought my first house for $155K making $55K / year, and my second house for $390K making $100K.) If you're making over $100K, and spending under a third of it on housing, you should be able to afford to live, unless you're careless with your money. I don't think I'm making any sacrifices in my life, because I don't think of the things you can overspend on as sacrifices. As I said, I eat well (at home and at restaurants), I travel, I have great technology / toys. And at 44 I have a 7 figure net worth. Because I'm still spending under $65K USD / year, I could likely live off investments in a few more years, though being in software, it's easy to continue contracting on my own terms and having extra money.
- anvil-on-my-toe 3y ago
  $100k for a down payment - how many years of saving does that take and what happens to that $500k price tag during those years of saving? One hardship like a medical issue, a setback in employment, or a child you weren't ready for, then what? And I'm not sure you could find a one bedroom, one bathroom for $500k in a city with tech jobs.
  - neogodless 3y ago
    In places where houses are $500K, rent is probably $2000 / month. (More like $1200 - 5000 / month, but depending on the size, location, amenities, luxuriousness of fixtures, etc.) If you make barely $100K, and are spending $24K on rent, let's say you spend half of the rest on living. That leaves you with $38K savings per year. So it takes you 32 months to save up $100K for a down payment. The secret is don't spend all of the money you make. Well it's not a secret, but it's also not "normal." It's culturally normal to spend all of your money, and then wonder why you can't build up savings. But if you're a software engineer with an income of 6 figures, you really should be able to figure out how to live a good life without spending every last dollar.
    - sokoloff 3y ago
      Does this $100K/yr earner pay no income taxes and FICA somehow?
    - anvil-on-my-toe 3y ago
      You forgot taxes. $38k - $27k in taxes = $11k savings. So 9 years to save up, by which time housing inflation will have taken the price to ~$700k. You are then $40k short for the down payment.
      - neogodless 3y ago
        Do you know a lot of software engineers that barely make $100k? That's why I'm not getting caught up in the particulars of this example.
        SoftTalker 3y ago
        There are many people in software that are making under $100k Anyone working in in a government position, or for a state university, or for a nonprofit is probably not earning $100k except maybe in high COL areas or those with quite senior positions.
        phero_cnstrcts 3y ago
        In Europe frontend is about 60k annually.
        anvil-on-my-toe 3y ago
        Don't you think it's interesting that taxes dramatically skew the example? Think about people earning $50k - $100k. 37 million households in the US. Another 34 million households earn less. 128 million households in America total.[1] 12, give or take 2, years into professional life, you sign a 30-year note and cash out all of your savings. Wages and cost of living won't be constant, but that's basically the optimistic case. Working 42 years to retire by owning one basic shelter. [1] https://www.statista.com/statistics/203183/percentage-distribution-of-household-income-in-the-us/ https://www.statista.com/statistics/203183/percentage-distri...
  - oooyay 3y ago
    It took me about five years to save my down payment. I lived very frugally, don't have a wife, don't have a kid, I paid less than $20k on note for each of my cars, and do not have college debt. I'd say it's fairly difficult if you start moving any of the knobs I minimized or set to zero above. Even then, after my down payment money was tight for the first year because it was everything I had. I got a mortgage similar to what OP mentioned but I have a veterans home loan. Most people I know don't have one of those, so their mortgage that was gotten at the same time as mine is closer to $4k/m.
    - ta988 3y ago
      So you are a both a bit of an exception nowadays with no family and no debt.
      - oooyay 3y ago
        I'm largely an exception, yes
- Brystephor 3y ago
  Home rates are closer to 8%. The redfin calculator puts a $490k home near me at just under $3200/mo with 20% down. So over $36k a year. I'm in Washington, so no income tax. Let's say $100k income, single person. No pre tax deductions and you'll be bringing home $6200/mo. So over 50% of your take home goes to mortgage alone. In your example, your home prices were roughly 3x-4x your annual income. Compared to your example of prices being 5x.
  - Retric 3y ago
    Why on earth would a single person buy a 490k house? Everyone I know either had roommates, an inheritance, or make enough it’s a trivial expense. Also don’t forget about the home mortgage tax deduction, that plus inflation really impacts the cost of home ownership.
    - johnnyanmac 3y ago
      >Why on earth would a single person buy a 490k house? I'm in California, so that's pretty much the bare minimum. Maybe if I go way out to the high desert area (we're talking 70+ miles from downtown LA), I see more 300-400k houses for 2 bed/bath. In my area (which is still pretty far from Downtown) it's 600k minimum.
      - Retric 3y ago
        70 miles from the downtown of a major city is still generally considered part of that city’s metropolitan area and prices reflect that. Still though getting a 1br condo in LA for 150-300k is more reflective of what it actually costs to get an affordable place as a single person in that area. Yes you have condo fees, but maintain a house comes with serious costs as well. That’s the thing, if it’s a trivial expense then who cares, but when there’s more affordable options it’s hard to imagine why stretching yourself buying a house at that price would be a good idea. 255k for a 1,952 square foot place in Harrisonburg, VA 22802 is far more representative of most of the US’s housing prices. It’s a modest 50k population university town 130 miles from DC so not in the middle of nowhere but still cheap. https://www.redfin.com/VA/Harrisonburg/1036-Meadowlark-Dr-22802/home/68256036 https://www.redfin.com/VA/Harrisonburg/1036-Meadowlark-Dr-22... Plenty of places listed for less than that or far more, but in general there’s still a lot of options under 300k.
- mixmastamyk 3y ago
  If you bought in the past, you made it. That doesn't help the current generation. Hundred year-old teardowns are two million in our neighborhood. 60+ y-o condos are $800k. Redfin est payment/mo: $5,974. Just the property tax and HOA fee is over $1,000 a month.
- johnnyanmac 3y ago
  >I eat well (at home and at restaurants), I travel, I have great technology / toys. And at 44 I have a 7 figure net worth. You clearly don't have kids. and/or a spouse that depends on your income. The former drains your money very quickly, especially if you need services like daycare (if your spouse isn't a full time parent... so we're back to one income to support a family of 3+) or perhaps invest in private school. I wouldn't call either of those "overspending" depending on the area. And nowadays you may need to invest in a 529 for that kid's college... It's already hard raising a kid badly. Raising one well is expensive. >A $500K house with 20% down how are you saving 100k on a 100k salary, on top of other savings for rainy days? do you just save for 5-10 years by throwing 20% into a savings account, on top of rent/utilities and other stuff? Even then, the hard part is getting approved for the sale. The market right now is just absurd. Even if you can comfortably pay mortgage you may be outbid by some family or other person who simply buys the house in cash. You really can't keep up.
bigbillheck 3y ago
Median household income in the US is $71k.
art-not 3y ago
I live in Toronto. The lowest I've seen for a job listing at a tech-oriented small company was 90k on the low end(the job listing was 90k-120k), and this was for someone with 2 years experience. I've never seen a tech or tech-adjacent company offer 60k for even new grads. Most small companies I've seen offer for someone with 5+ years of solid experience a minimum of 120k USD. These are for remote jobs.
ta988 3y ago
So you say a salary above the median salary is not enough? This raises a big question of how is half the population in the country getting by.
- booleandilemma 3y ago
  I've been very confused about how people are getting by. If they're not in tech, and and they're not a member of the professional class (doctor, lawyer, etc), how are they doing it? Is everyone working two jobs and doing uber on top of that, or what? How much of a bubble am I in? I'm in tech and I feel like I'm barely making it.
  - lacrimacida 3y ago
    Middle class has been and continues to being squished and crushed, things are getting worse and worse if you haven’t noticed. And it’s not just in the US, but also other western economies such as Germany, France, UK, etc.
  - gtowey 3y ago
    I wonder the same thing. I suspect that the answer is they carry a lot of debt that they never really expect to pay off.
- thatfrenchguy 3y ago
  « Retire early » is the main part you’re missing from their argument, that implies saving large portions of disposable income. I always feel sad when people have high paying jobs they hate just so that « retire early » though, in a field like software engineering you can find a happy medium I feel like.
  - Fargren 3y ago
    The happy medium for me would be working less than 20 hours per week. It's not about the work but about how much time it consumes. And part time software engineering jobs don't seem to exist... I would happily live on half my income for half my hours. But if retiring early is more realistic than that (and it seems to be), I'll take it.
hef19898 3y ago
Well, not being able to retire at 60-100k is such an US problem... It is enough to easily retirely at whatever the legal retirement age is, earlier if I include all tue benefits my boring big corp job and collectively bargained salary provide.

neogodless 3y ago

In today's environment, home prices really seem to be getting nuts. As I said, anyone in software is likely making over $100K. A $500K house with 20% down would have a P&I payment of $2,715 / month (at 7.2%, plus taxes/insurance.) That's less than $33K / year. (I bought my first house for $155K making $55K / year, and my second house for $390K making $100K.) If you're making over $100K, and spending under a third of it on housing, you should be able to afford to live, unless you're careless with your money. I don't think I'm making any sacrifices in my life, because I don't think of the things you can overspend on as sacrifices. As I said, I eat well (at home and at restaurants), I travel, I have great technology / toys. And at 44 I have a 7 figure net worth. Because I'm still spending under $65K USD / year, I could likely live off investments in a few more years, though being in software, it's easy to continue contracting on my own terms and having extra money.

anvil-on-my-toe 3y ago
$100k for a down payment - how many years of saving does that take and what happens to that $500k price tag during those years of saving? One hardship like a medical issue, a setback in employment, or a child you weren't ready for, then what? And I'm not sure you could find a one bedroom, one bathroom for $500k in a city with tech jobs.
- neogodless 3y ago
  In places where houses are $500K, rent is probably $2000 / month. (More like $1200 - 5000 / month, but depending on the size, location, amenities, luxuriousness of fixtures, etc.) If you make barely $100K, and are spending $24K on rent, let's say you spend half of the rest on living. That leaves you with $38K savings per year. So it takes you 32 months to save up $100K for a down payment. The secret is don't spend all of the money you make. Well it's not a secret, but it's also not "normal." It's culturally normal to spend all of your money, and then wonder why you can't build up savings. But if you're a software engineer with an income of 6 figures, you really should be able to figure out how to live a good life without spending every last dollar.
  - sokoloff 3y ago
    Does this $100K/yr earner pay no income taxes and FICA somehow?
  - anvil-on-my-toe 3y ago
    You forgot taxes. $38k - $27k in taxes = $11k savings. So 9 years to save up, by which time housing inflation will have taken the price to ~$700k. You are then $40k short for the down payment.
    - neogodless 3y ago
      Do you know a lot of software engineers that barely make $100k? That's why I'm not getting caught up in the particulars of this example.
      - SoftTalker 3y ago
        There are many people in software that are making under $100k Anyone working in in a government position, or for a state university, or for a nonprofit is probably not earning $100k except maybe in high COL areas or those with quite senior positions.
        phero_cnstrcts 3y ago
        In Europe frontend is about 60k annually.
      - anvil-on-my-toe 3y ago
        Don't you think it's interesting that taxes dramatically skew the example? Think about people earning $50k - $100k. 37 million households in the US. Another 34 million households earn less. 128 million households in America total.[1] 12, give or take 2, years into professional life, you sign a 30-year note and cash out all of your savings. Wages and cost of living won't be constant, but that's basically the optimistic case. Working 42 years to retire by owning one basic shelter. [1] https://www.statista.com/statistics/203183/percentage-distribution-of-household-income-in-the-us/ https://www.statista.com/statistics/203183/percentage-distri...
- oooyay 3y ago
  It took me about five years to save my down payment. I lived very frugally, don't have a wife, don't have a kid, I paid less than $20k on note for each of my cars, and do not have college debt. I'd say it's fairly difficult if you start moving any of the knobs I minimized or set to zero above. Even then, after my down payment money was tight for the first year because it was everything I had. I got a mortgage similar to what OP mentioned but I have a veterans home loan. Most people I know don't have one of those, so their mortgage that was gotten at the same time as mine is closer to $4k/m.
  - ta988 3y ago
    So you are a both a bit of an exception nowadays with no family and no debt.
    - oooyay 3y ago
      I'm largely an exception, yes
Brystephor 3y ago
Home rates are closer to 8%. The redfin calculator puts a $490k home near me at just under $3200/mo with 20% down. So over $36k a year. I'm in Washington, so no income tax. Let's say $100k income, single person. No pre tax deductions and you'll be bringing home $6200/mo. So over 50% of your take home goes to mortgage alone. In your example, your home prices were roughly 3x-4x your annual income. Compared to your example of prices being 5x.
- Retric 3y ago
  Why on earth would a single person buy a 490k house? Everyone I know either had roommates, an inheritance, or make enough it’s a trivial expense. Also don’t forget about the home mortgage tax deduction, that plus inflation really impacts the cost of home ownership.
  - johnnyanmac 3y ago
    >Why on earth would a single person buy a 490k house? I'm in California, so that's pretty much the bare minimum. Maybe if I go way out to the high desert area (we're talking 70+ miles from downtown LA), I see more 300-400k houses for 2 bed/bath. In my area (which is still pretty far from Downtown) it's 600k minimum.
    - Retric 3y ago
      70 miles from the downtown of a major city is still generally considered part of that city’s metropolitan area and prices reflect that. Still though getting a 1br condo in LA for 150-300k is more reflective of what it actually costs to get an affordable place as a single person in that area. Yes you have condo fees, but maintain a house comes with serious costs as well. That’s the thing, if it’s a trivial expense then who cares, but when there’s more affordable options it’s hard to imagine why stretching yourself buying a house at that price would be a good idea. 255k for a 1,952 square foot place in Harrisonburg, VA 22802 is far more representative of most of the US’s housing prices. It’s a modest 50k population university town 130 miles from DC so not in the middle of nowhere but still cheap. https://www.redfin.com/VA/Harrisonburg/1036-Meadowlark-Dr-22802/home/68256036 https://www.redfin.com/VA/Harrisonburg/1036-Meadowlark-Dr-22... Plenty of places listed for less than that or far more, but in general there’s still a lot of options under 300k.
mixmastamyk 3y ago
If you bought in the past, you made it. That doesn't help the current generation. Hundred year-old teardowns are two million in our neighborhood. 60+ y-o condos are $800k. Redfin est payment/mo: $5,974. Just the property tax and HOA fee is over $1,000 a month.
johnnyanmac 3y ago
>I eat well (at home and at restaurants), I travel, I have great technology / toys. And at 44 I have a 7 figure net worth. You clearly don't have kids. and/or a spouse that depends on your income. The former drains your money very quickly, especially if you need services like daycare (if your spouse isn't a full time parent... so we're back to one income to support a family of 3+) or perhaps invest in private school. I wouldn't call either of those "overspending" depending on the area. And nowadays you may need to invest in a 529 for that kid's college... It's already hard raising a kid badly. Raising one well is expensive. >A $500K house with 20% down how are you saving 100k on a 100k salary, on top of other savings for rainy days? do you just save for 5-10 years by throwing 20% into a savings account, on top of rent/utilities and other stuff? Even then, the hard part is getting approved for the sale. The market right now is just absurd. Even if you can comfortably pay mortgage you may be outbid by some family or other person who simply buys the house in cash. You really can't keep up.

bigbillheck 3y ago

Median household income in the US is $71k.

art-not 3y ago

I live in Toronto. The lowest I've seen for a job listing at a tech-oriented small company was 90k on the low end(the job listing was 90k-120k), and this was for someone with 2 years experience. I've never seen a tech or tech-adjacent company offer 60k for even new grads. Most small companies I've seen offer for someone with 5+ years of solid experience a minimum of 120k USD. These are for remote jobs.

ta988 3y ago

So you say a salary above the median salary is not enough? This raises a big question of how is half the population in the country getting by.

booleandilemma 3y ago
I've been very confused about how people are getting by. If they're not in tech, and and they're not a member of the professional class (doctor, lawyer, etc), how are they doing it? Is everyone working two jobs and doing uber on top of that, or what? How much of a bubble am I in? I'm in tech and I feel like I'm barely making it.
- lacrimacida 3y ago
  Middle class has been and continues to being squished and crushed, things are getting worse and worse if you haven’t noticed. And it’s not just in the US, but also other western economies such as Germany, France, UK, etc.
- gtowey 3y ago
  I wonder the same thing. I suspect that the answer is they carry a lot of debt that they never really expect to pay off.
thatfrenchguy 3y ago
« Retire early » is the main part you’re missing from their argument, that implies saving large portions of disposable income. I always feel sad when people have high paying jobs they hate just so that « retire early » though, in a field like software engineering you can find a happy medium I feel like.
- Fargren 3y ago
  The happy medium for me would be working less than 20 hours per week. It's not about the work but about how much time it consumes. And part time software engineering jobs don't seem to exist... I would happily live on half my income for half my hours. But if retiring early is more realistic than that (and it seems to be), I'll take it.

hef19898 3y ago

Well, not being able to retire at 60-100k is such an US problem... It is enough to easily retirely at whatever the legal retirement age is, earlier if I include all tue benefits my boring big corp job and collectively bargained salary provide.