5 ms·

If you were bringing in a competitive salary in tech for the last 20 years you don't even need to work anymore. So there is that..

by mrits 3y ago

hotnfresh 3y ago
BLS says US median programmer salary in the US was just under $100,000 last year. 20 years of a normal US tech salary won't let you retire. A top-few-percent one, maybe.
- mrits 3y ago
  That was a competitive salary when I started in 2005.
  - hotnfresh 3y ago
    Well, it'd also represent a raise for about 50% of programmers in 2022. [EDIT] Further: "The lowest 10 percent earned less than $54,310, and the highest 10 percent earned more than $157,690." (in 2022, still). The ones who can retire in 20 years are making (ballpark) top-5%-of-field wages most or all of that time. [EDIT EDIT] I didn't pick the best category for this, but the numbers only skew up 25ish % for the most-relevant one. Not a single BLS computer job category has a median particularly close to "retire in 20 years at this income" money. FAANG, finance, and a small segment of the startup market that's in that same category—yeah. Almost all the rest? No.
- dboreham 3y ago
  They classified people we don't think of as programmers as programmers. Classic job stats mistake.
  - hotnfresh 3y ago
    Ok, sure, that's one category and some of the others do have a higher median. Some of what we think of as "programmers" or "developers" will actually land in other categories, and also some we don't, will too. https://www.bls.gov/ooh/computer-and-information-technology/home.htm https://www.bls.gov/ooh/computer-and-information-technology/... But still, even the top-median category, "Computer and Information Research Scientists", doesn't have "retire in 20 years" median wages.
- polyomino 3y ago
  What's the distribution of experience though? In a fast growing field, most will be early in career, which will push this metric down relative to established fields with little growth.
  - hotnfresh 3y ago
    The question's whether 20 years of a "competitive" tech salary is enough money to retire. I think one must have a very-skewed, bubble-bound definition of "competitive" for that to be plausibly true. Programming jobs don't pay enough to grant easy-mode early retirement for most of our field—even in the US.
- woobar 3y ago
  First, Computer Programmer is a strange occupation. According to BLS there are just 147K positions in the US. Instead I'd suggest looking at Software Developers (1.5M positions) with median income at $127K. Second, by definition median is not a competitive salary. I'd think top 25% of devs are getting competitive salary. Which is $161K [1] 20 years of savings at 30% of income will get you $2M. Which is not a fat retirement, but still doable. [1] https://www.bls.gov/oes/current/oes151252.htm#nat https://www.bls.gov/oes/current/oes151252.htm#nat
  - hotnfresh 3y ago
    > Second, by definition median is not a competitive salary. Yes, it is. For the field as a whole? Yes, it absolutely is. For specific segments of it? No. Some of those are higher. And others are lower. > 20 years of savings at 30% of income will get you $2M. Which is not a fat retirement, but still doable. Healthcare complicates early retirement badly in the US. Retire at (say) 45 with only $2m in the bank and you are... gambling. To put it mildly. Even if you live reasonably frugally.
    - rootusrootus 3y ago
      > Healthcare complicates early retirement badly in the US. Retire at (say) 45 with only $2m in the bank and you are... gambling. To put it mildly. Even if you live reasonably frugally. 100% this. I'm almost 50, and as I look towards retirement, I think I should try to find a cushy job that'll last me to 65 without causing too much stress, because until you qualify for Medicare it's really hard to afford health insurance premiums unless you're fashionably wealthy.
      - manzanarama 3y ago
        Really, what is a good ballpark for a family of 4? Is it like 5k a month?
        madengr 3y ago
        [dead]
- randomdata 3y ago
  The median income is ~$30,000. That means you have ~$70,000 to invest each year. If we assume a 5% rate of return, you'll have ~$2MM after 20 years. At the same rate, that will continue to provide you $100,000 each year in retirement. Bad luck can happen, but generally speaking retirement should have been quite easy with that kind of income.
  - adra 3y ago
    I love your optimism. Some may be able to live off software at 30k/yr making 100/yr "somewhere", but not most places. My rent started at around 40% of my take home and adding taxes alone, my pay rate was well under this 70% fantasy which doesn't even begin to address any other "incidental" living expenses like food, transport, children, elderly, school loans, etc......
    - randomdata 3y ago
      > My rent started at around 40% of my take home You were paying ~$3,000 per month for rent 20 years ago? I remember renting a place 22 years ago for $250 per month. Maybe you were in some super insane cost of living area, but if that's the case, why would you accept just an average developer salary? Average salaries are for average places.
  - hotnfresh 3y ago
    Median topped $40k in 2022. The (just under) $100k is pre-tax. You won't get much social security when you hit "retirement age" if you retire after only 20 years of working at that level of income, so you'll need more savings at that age than others do. $100k/yr is a 5% withdrawal rate on $2 million, which might be a "safe" rate at normal retirement age (debatable) but is risky as hell if you start doing it at 45 and don't plan to die in your 60s. If you've been saving that aggressively (as cash/investments), you won't own your own house, or at least, you definitely won't be anywhere near paying it off. That significantly raises your costs in retirement. You have significant risk from healthcare costs until you hit medicare age (and even then...). You're probably looking at $5k-10k a year in premiums (individual) at age 45+, and still five figures of annual risk exposure despite already paying that much. Retiring on $2m at 45 would be very likely to end in failure, even as an individual supporting only yourself.
irrational 3y ago
What is a competitive salary? Do you mean the small fraction of programmers that work for FAANG companies? Or do you mean the more normal salaries the vast majority of programmers make at non-FAANG companies? I’ve worked for the past 20 years and am as far from not needing to work anymore as my first day. Well, that isn’t strictly true, but my 401k only has about 33-50% of what it needs for me to retire. I have no savings beyond that.
- mrits 3y ago
  I didn't realize anyone could go to medical school.
  - dmoy 3y ago
    Maybe a little overly sarcastic, but there's a real point there: Not everyone can get into med school (~5% acceptance rate?), but even more disturbingly some people get out of med school with tons of debt, and then either fail their step 2 or don't pass quickly enough to get a residency. Or fail boards after residency. Then you're in a really shitty position, with hundreds of thousands of debt but no ability to practice medicine.
    - squigglingAvia 3y ago
      Thing is which med school you’ll go will determine your debt load. Not all med schools charge the same rate.
      - radlad 3y ago
        And also your board exams success rate!
sokoloff 3y ago
That depends exclusively on your savings rate (which dictates your years-needed-to-retire): https://www.mrmoneymustache.com/2012/01/13/the-shockingly-simple-math-behind-early-retirement/ https://www.mrmoneymustache.com/2012/01/13/the-shockingly-si... Most people aren't saving ~43% of their take-home pay, no matter how much they earn.

If you were bringing in a competitive salary in tech for the last 20 years you don't even need to work anymore. So there is that..

by mrits 3y ago

If you were bringing in a competitive salary in tech for the last 20 years you don't even need to work anymore. So there is that..

hotnfresh 3y ago

BLS says US median programmer salary in the US was just under $100,000 last year. 20 years of a normal US tech salary won't let you retire. A top-few-percent one, maybe.

mrits 3y ago
That was a competitive salary when I started in 2005.
- hotnfresh 3y ago
  Well, it'd also represent a raise for about 50% of programmers in 2022. [EDIT] Further: "The lowest 10 percent earned less than $54,310, and the highest 10 percent earned more than $157,690." (in 2022, still). The ones who can retire in 20 years are making (ballpark) top-5%-of-field wages most or all of that time. [EDIT EDIT] I didn't pick the best category for this, but the numbers only skew up 25ish % for the most-relevant one. Not a single BLS computer job category has a median particularly close to "retire in 20 years at this income" money. FAANG, finance, and a small segment of the startup market that's in that same category—yeah. Almost all the rest? No.
dboreham 3y ago
They classified people we don't think of as programmers as programmers. Classic job stats mistake.
- hotnfresh 3y ago
  Ok, sure, that's one category and some of the others do have a higher median. Some of what we think of as "programmers" or "developers" will actually land in other categories, and also some we don't, will too. https://www.bls.gov/ooh/computer-and-information-technology/home.htm https://www.bls.gov/ooh/computer-and-information-technology/... But still, even the top-median category, "Computer and Information Research Scientists", doesn't have "retire in 20 years" median wages.
polyomino 3y ago
What's the distribution of experience though? In a fast growing field, most will be early in career, which will push this metric down relative to established fields with little growth.
- hotnfresh 3y ago
  The question's whether 20 years of a "competitive" tech salary is enough money to retire. I think one must have a very-skewed, bubble-bound definition of "competitive" for that to be plausibly true. Programming jobs don't pay enough to grant easy-mode early retirement for most of our field—even in the US.
woobar 3y ago
First, Computer Programmer is a strange occupation. According to BLS there are just 147K positions in the US. Instead I'd suggest looking at Software Developers (1.5M positions) with median income at $127K. Second, by definition median is not a competitive salary. I'd think top 25% of devs are getting competitive salary. Which is $161K [1] 20 years of savings at 30% of income will get you $2M. Which is not a fat retirement, but still doable. [1] https://www.bls.gov/oes/current/oes151252.htm#nat https://www.bls.gov/oes/current/oes151252.htm#nat
- hotnfresh 3y ago
  > Second, by definition median is not a competitive salary. Yes, it is. For the field as a whole? Yes, it absolutely is. For specific segments of it? No. Some of those are higher. And others are lower. > 20 years of savings at 30% of income will get you $2M. Which is not a fat retirement, but still doable. Healthcare complicates early retirement badly in the US. Retire at (say) 45 with only $2m in the bank and you are... gambling. To put it mildly. Even if you live reasonably frugally.
  - rootusrootus 3y ago
    > Healthcare complicates early retirement badly in the US. Retire at (say) 45 with only $2m in the bank and you are... gambling. To put it mildly. Even if you live reasonably frugally. 100% this. I'm almost 50, and as I look towards retirement, I think I should try to find a cushy job that'll last me to 65 without causing too much stress, because until you qualify for Medicare it's really hard to afford health insurance premiums unless you're fashionably wealthy.
    - manzanarama 3y ago
      Really, what is a good ballpark for a family of 4? Is it like 5k a month?
      - madengr 3y ago
        [dead]
randomdata 3y ago
The median income is ~$30,000. That means you have ~$70,000 to invest each year. If we assume a 5% rate of return, you'll have ~$2MM after 20 years. At the same rate, that will continue to provide you $100,000 each year in retirement. Bad luck can happen, but generally speaking retirement should have been quite easy with that kind of income.
- adra 3y ago
  I love your optimism. Some may be able to live off software at 30k/yr making 100/yr "somewhere", but not most places. My rent started at around 40% of my take home and adding taxes alone, my pay rate was well under this 70% fantasy which doesn't even begin to address any other "incidental" living expenses like food, transport, children, elderly, school loans, etc......
  - randomdata 3y ago
    > My rent started at around 40% of my take home You were paying ~$3,000 per month for rent 20 years ago? I remember renting a place 22 years ago for $250 per month. Maybe you were in some super insane cost of living area, but if that's the case, why would you accept just an average developer salary? Average salaries are for average places.
- hotnfresh 3y ago
  Median topped $40k in 2022. The (just under) $100k is pre-tax. You won't get much social security when you hit "retirement age" if you retire after only 20 years of working at that level of income, so you'll need more savings at that age than others do. $100k/yr is a 5% withdrawal rate on $2 million, which might be a "safe" rate at normal retirement age (debatable) but is risky as hell if you start doing it at 45 and don't plan to die in your 60s. If you've been saving that aggressively (as cash/investments), you won't own your own house, or at least, you definitely won't be anywhere near paying it off. That significantly raises your costs in retirement. You have significant risk from healthcare costs until you hit medicare age (and even then...). You're probably looking at $5k-10k a year in premiums (individual) at age 45+, and still five figures of annual risk exposure despite already paying that much. Retiring on $2m at 45 would be very likely to end in failure, even as an individual supporting only yourself.

irrational 3y ago

What is a competitive salary? Do you mean the small fraction of programmers that work for FAANG companies? Or do you mean the more normal salaries the vast majority of programmers make at non-FAANG companies? I’ve worked for the past 20 years and am as far from not needing to work anymore as my first day. Well, that isn’t strictly true, but my 401k only has about 33-50% of what it needs for me to retire. I have no savings beyond that.

mrits 3y ago
I didn't realize anyone could go to medical school.
- dmoy 3y ago
  Maybe a little overly sarcastic, but there's a real point there: Not everyone can get into med school (~5% acceptance rate?), but even more disturbingly some people get out of med school with tons of debt, and then either fail their step 2 or don't pass quickly enough to get a residency. Or fail boards after residency. Then you're in a really shitty position, with hundreds of thousands of debt but no ability to practice medicine.
  - squigglingAvia 3y ago
    Thing is which med school you’ll go will determine your debt load. Not all med schools charge the same rate.
    - radlad 3y ago
      And also your board exams success rate!

sokoloff 3y ago

That depends exclusively on your savings rate (which dictates your years-needed-to-retire): https://www.mrmoneymustache.com/2012/01/13/the-shockingly-simple-math-behind-early-retirement/ https://www.mrmoneymustache.com/2012/01/13/the-shockingly-si... Most people aren't saving ~43% of their take-home pay, no matter how much they earn.