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Why do you need substantially more than 80k to live if your house is paid down in cash? Earning 200k is usually about spending half of your net income on mortga

Why do you need substantially more than 80k to live if your house is paid down in cash? Earning 200k is usually about spending half of your net income on mortgages etc. Not that 80k is the lifestyle of a king, but it is plenty to get by with if all you are buying is insurance, food and entertainment.

com2kid 3y ago
We are talking early retirement here, so presumably young enough to still have a family. Daycare in my area is ~2400 a month (not the super fancy daycares either, they are over 3k a month). If you want to fully fund a 529 college fund, that is 30k a year for 15 years[1]. So right off the bat we have 50k a year in expenses for having a single kid, not counting feeding them and other activities. If you choose public school, then that number drops after the kid is 5, but if you want a private school that is 15k-35k a year. tl;dr 2 million in the bank isn't enough to raise a single kid w/o supplementary income. If you retire early you'll have to pay for your own health insurance, a Platinum plan is ~700 a month, not counting any other expenses that you have to pay. 7k a year right there. Cars cost $ to purchase and maintain. If you retire in Manhattan you can get away with not having a car, maybe Boston if you are lucky. Most other US cities require a car and that is going to average around 10k a year, assuming you have a mid-range car and that somehow you don't need to buy a new car during your retirement. If all you do is shop at Costco (perfectly doable!) you'll be able to keep food costs down, although you'll have to spend the time and money driving to a Costco. Outside of Costco, I'm paying around $200-$300 a week for groceries for 3 people. I found this lovely quote > As far as specific food items go, a dozen eggs and a pound of apples in Seattle costs $3.54 and $2.71, respectively. Which, while written in August of 2023, is already horribly out of date. (For whatever reason eggs got super expensive recently...) Figure 1k a month for food, if you never go out to eat, ever. Also no drinking alcohol of any type, that'll blow the budget. So we are up to 29K a year in expenses so far, just eating and driving around. No gym membership, no sports or hobbies, no vacations. No streaming services, no cable TV, no internet, no utilities, etc. Figure another 1k a month for those things and you are now spending 41k a year. Assuming no kids and a paid off house, 80k is livable, but it'll be somewhat bare bones for a person who "retired with millions in the bank". Which is kind of messed up, when I graduated college 80k was a really good lifestyle, but inflation did its thing, and so did the rising CoL in Seattle. [1] The absurd price of college is a huge expense for parents who don't want their kids to be stuck with lots of debt. Having to pony up 30k a year is an obscene necessity driven by the horrid cost of a college degree in America.
- sseagull 3y ago
  > Daycare in my area is ~2400 a month If you are retiring early, why are you paying for daycare? Many people would love to retire early just to be able to spend time with their children.
  - com2kid 3y ago
    Hah! Good point, I didn't think about that. Although IMHO daycare has plenty of benefits, and I actually do know of people who send their kids to 1/2 day daycare just for the educational benefits and socialization, so that is still 1k a month or so. I've also noticed that the stay at home parents tend to enroll their kids in more activities, the cost of which quickly adds up. Being with a toddler 24/7 is a ton of mental work, especially in modern western societies where we don't have extended support networks of family and friends.
- toomuchtodo 3y ago
  This isn’t a wealth problem, this is an expectations problem.
  - unshavedyak 3y ago
    Yea. Households are living off of 80k/y and this thread is complaining that it costs a couple million to buy a city house. IMO move. If the life you want is more rich than your funds, congrats you’re still working - but you still have a massive bump. So weird to me lol
- deleted 3y ago
  [deleted]
- unusualmonkey 3y ago
  Why are you funding over half a million just for college?
  - com2kid 3y ago
    Because that is the estimated cost of college in 18 years. :( Over the last couple of decades, tuition has gone up 2x inflation, which means figure 6-7% increase in college costs per year. That sadly adds up to around half a million.

com2kid 3y ago

We are talking early retirement here, so presumably young enough to still have a family. Daycare in my area is ~2400 a month (not the super fancy daycares either, they are over 3k a month). If you want to fully fund a 529 college fund, that is 30k a year for 15 years[1]. So right off the bat we have 50k a year in expenses for having a single kid, not counting feeding them and other activities. If you choose public school, then that number drops after the kid is 5, but if you want a private school that is 15k-35k a year. tl;dr 2 million in the bank isn't enough to raise a single kid w/o supplementary income. If you retire early you'll have to pay for your own health insurance, a Platinum plan is ~700 a month, not counting any other expenses that you have to pay. 7k a year right there. Cars cost $ to purchase and maintain. If you retire in Manhattan you can get away with not having a car, maybe Boston if you are lucky. Most other US cities require a car and that is going to average around 10k a year, assuming you have a mid-range car and that somehow you don't need to buy a new car during your retirement. If all you do is shop at Costco (perfectly doable!) you'll be able to keep food costs down, although you'll have to spend the time and money driving to a Costco. Outside of Costco, I'm paying around $200-$300 a week for groceries for 3 people. I found this lovely quote > As far as specific food items go, a dozen eggs and a pound of apples in Seattle costs $3.54 and $2.71, respectively. Which, while written in August of 2023, is already horribly out of date. (For whatever reason eggs got super expensive recently...) Figure 1k a month for food, if you never go out to eat, ever. Also no drinking alcohol of any type, that'll blow the budget. So we are up to 29K a year in expenses so far, just eating and driving around. No gym membership, no sports or hobbies, no vacations. No streaming services, no cable TV, no internet, no utilities, etc. Figure another 1k a month for those things and you are now spending 41k a year. Assuming no kids and a paid off house, 80k is livable, but it'll be somewhat bare bones for a person who "retired with millions in the bank". Which is kind of messed up, when I graduated college 80k was a really good lifestyle, but inflation did its thing, and so did the rising CoL in Seattle. [1] The absurd price of college is a huge expense for parents who don't want their kids to be stuck with lots of debt. Having to pony up 30k a year is an obscene necessity driven by the horrid cost of a college degree in America.

sseagull 3y ago
> Daycare in my area is ~2400 a month If you are retiring early, why are you paying for daycare? Many people would love to retire early just to be able to spend time with their children.
- com2kid 3y ago
  Hah! Good point, I didn't think about that. Although IMHO daycare has plenty of benefits, and I actually do know of people who send their kids to 1/2 day daycare just for the educational benefits and socialization, so that is still 1k a month or so. I've also noticed that the stay at home parents tend to enroll their kids in more activities, the cost of which quickly adds up. Being with a toddler 24/7 is a ton of mental work, especially in modern western societies where we don't have extended support networks of family and friends.
toomuchtodo 3y ago
This isn’t a wealth problem, this is an expectations problem.
- unshavedyak 3y ago
  Yea. Households are living off of 80k/y and this thread is complaining that it costs a couple million to buy a city house. IMO move. If the life you want is more rich than your funds, congrats you’re still working - but you still have a massive bump. So weird to me lol
deleted 3y ago
[deleted]
unusualmonkey 3y ago
Why are you funding over half a million just for college?
- com2kid 3y ago
  Because that is the estimated cost of college in 18 years. :( Over the last couple of decades, tuition has gone up 2x inflation, which means figure 6-7% increase in college costs per year. That sadly adds up to around half a million.