4 ms·

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

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.
- randomdata 3y ago
  > $100k/yr is a 5% withdrawal rate on $2 million Yes, that's what the previous comment said. Of course, you don't need anywhere close to $100k, so you would still be reinvesting the bulk of it, just as you did throughout your career. That will see your returns continue to increase as you grow older. > you won't own your own house, or at least, you definitely won't be anywhere near paying it off. You'd have no trouble buying a home on a $30k income 20 years ago. They could barely give houses away back then. > You have significant risk from healthcare costs You still have $70k to play with each year. If you have to miss a year of reinvestment it won't hamstring you that much. As before, bad luck happens. It is possible you are the unlucky one. But generally speaking the money is there.
  - ryan_lane 3y ago
    > You'd have no trouble buying a home on a $30k income 20 years ago. They could barely give houses away back then. I made a bit more than that 20 years ago and can guarantee you it wasn't anywhere near enough money to buy a house. Finding affordable apartments to rent on that salary was difficult enough. I lived in New Orleans, which wasn't a high cost of living city at the time. Maybe if you lived in the middle of nowhere that would be doable, but almost certainly not in a city.
    - PH95VuimJjqBqy 3y ago
      their username is randomdata, not accuratedata. my experience agrees with yours.
  - fragmede 3y ago
    > You'd have no trouble buying a home on a $30k income 20 years ago. You're absolutely right - the banks would give you a loan you couldn't actually afford. I seem to recall this leading to some sort of financial problem in 2008, unfortunately.

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.

randomdata 3y ago
> $100k/yr is a 5% withdrawal rate on $2 million Yes, that's what the previous comment said. Of course, you don't need anywhere close to $100k, so you would still be reinvesting the bulk of it, just as you did throughout your career. That will see your returns continue to increase as you grow older. > you won't own your own house, or at least, you definitely won't be anywhere near paying it off. You'd have no trouble buying a home on a $30k income 20 years ago. They could barely give houses away back then. > You have significant risk from healthcare costs You still have $70k to play with each year. If you have to miss a year of reinvestment it won't hamstring you that much. As before, bad luck happens. It is possible you are the unlucky one. But generally speaking the money is there.
- ryan_lane 3y ago
  > You'd have no trouble buying a home on a $30k income 20 years ago. They could barely give houses away back then. I made a bit more than that 20 years ago and can guarantee you it wasn't anywhere near enough money to buy a house. Finding affordable apartments to rent on that salary was difficult enough. I lived in New Orleans, which wasn't a high cost of living city at the time. Maybe if you lived in the middle of nowhere that would be doable, but almost certainly not in a city.
  - PH95VuimJjqBqy 3y ago
    their username is randomdata, not accuratedata. my experience agrees with yours.
- fragmede 3y ago
  > You'd have no trouble buying a home on a $30k income 20 years ago. You're absolutely right - the banks would give you a loan you couldn't actually afford. I seem to recall this leading to some sort of financial problem in 2008, unfortunately.