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How are average earners able to prep for the future?
Posted on 8/9/23 at 8:59 am
Posted on 8/9/23 at 8:59 am
I've been slowly coming to grips with how much I need to save to call it a career and planning that out. I'm fortunate enough to earn well, but it did make me wonder how in the world people at the median earning levels can plan for the future.
Median income in the US ranges from 58-75k by state, which is not a lot per month after taxes. Perhaps people living out in the country can make it, but I can't fathom how people in the cities are able to save anything for a house or retirement on what they earn.
Is this just a crisis bound to come to a head at some point in the next 20-30 years?
Median income in the US ranges from 58-75k by state, which is not a lot per month after taxes. Perhaps people living out in the country can make it, but I can't fathom how people in the cities are able to save anything for a house or retirement on what they earn.
Is this just a crisis bound to come to a head at some point in the next 20-30 years?
27
Posted on 8/9/23 at 9:13 am to Thundercles
It's no accident. I am slowly coming to the realization that I will probably never retire with the way things are going.
Posted on 8/9/23 at 9:14 am to Thundercles
I wonder about this myself every single day. Wife and I do well for Louisiana standards, 140k a year. We don't live a lavish life, but a comfortable one. Still some months we "break even". Worst part is? We only have a mortgage, and normal bills.
My wife's coworker and husband are looking for a house right now. She overheard her coworker tell her husband on the phone that they couldn't pull out $500 out of their bank account because they would be overdrawn. There is no savings account.
My wife's coworker and husband are looking for a house right now. She overheard her coworker tell her husband on the phone that they couldn't pull out $500 out of their bank account because they would be overdrawn. There is no savings account.
Posted on 8/9/23 at 9:20 am to Thundercles
Get the Match in 401K
Social Security
Downsize home in retirement
Most likily work until 65 to get larger SS payment plus Medicare. Medicare is key because health insurance is killer for fixed income.
Social Security
Downsize home in retirement
Most likily work until 65 to get larger SS payment plus Medicare. Medicare is key because health insurance is killer for fixed income.
Posted on 8/9/23 at 9:23 am to Pauvetibete
I dicked around in my 20's and early 30's before I got my act together and now I'm in overdrive trying to catch up. I do well and am single so can dedicate a good chunk to fixing this, but I think about people facing down expensive car payments and student loans and God forbid they have any credit card debt racked up.
I'm in Dallas for example and starter homes in the suburbs are running 350k, and with Texas property tax that adds up. Just putting enough aside for an FHA loan on that would burden people, let alone paying the note along with PMI. And then trying to prep for retirement?
I'm in Dallas for example and starter homes in the suburbs are running 350k, and with Texas property tax that adds up. Just putting enough aside for an FHA loan on that would burden people, let alone paying the note along with PMI. And then trying to prep for retirement?
Posted on 8/9/23 at 9:23 am to Thundercles
Hulu has been plugging a commercial (I think it's Mass Mutual) where there is a couple sitting on the back porch trying to figure out which of their 3 kids will financially take care of them in retirement. The quote was something on the lines of, 55% of Americans expect their kids to help them financially in retirement.
Sadly, I think that number will be a lot higher when it's time for a lot of people to retire. It's also why you are seeing more and more elderly people working retail.
Sadly, I think that number will be a lot higher when it's time for a lot of people to retire. It's also why you are seeing more and more elderly people working retail.
Posted on 8/9/23 at 9:26 am to lsu13lsu
quote:
Most likily work until 65 to get larger SS payment plus Medicare
It's currently 67 to get the full SS benefits, but if you work until 70 you can get a little more. I expect Congress to bump those numbers up again before I reach 60.
Posted on 8/9/23 at 9:26 am to Thundercles
quote:
how in the world people at the median earning levels can plan for the future.
you learn to live on less. That is how.
Posted on 8/9/23 at 9:28 am to Thundercles
Best bet, power of stock market over a lifetime. My kids are just starting their working lives in early 20s, I am stressing to them over and over just put something in the market each week, the more you put the better chance you have. My goal is to help them all get a ROTH started even as part time workers and let it drip, drip, drip for 30 years.
This post was edited on 8/9/23 at 9:29 am
Posted on 8/9/23 at 9:29 am to Weekend Warrior79
quote:
55% of Americans expect their kids to help them financially in retirement
And I see the next generation in worse shape unless they can shake the materiality mentality of the boomers.
Posted on 8/9/23 at 9:29 am to Weekend Warrior79
quote:
Sadly, I think that number will be a lot higher when it's time for a lot of people to retire. It's also why you are seeing more and more elderly people working retail.
I think this as well. Who knows if social security will actually be available when a bunch of millennials are coming due, but even that isn't much to sustain a life on. I just wonder if there's going to be this massive group in a real financial pickle.
Posted on 8/9/23 at 9:39 am to lsu13lsu
quote:
Get the Match in 401K
Social Security
Downsize home in retirement
Most likily work until 65 to get larger SS payment plus Medicare. Medicare is key because health insurance is killer for fixed income.
All of this. Plus I have some kind of quazi pension program that my company has that slowly builds up.
Used to feel certain that I would be able to retire at 55. I'm now into my late 40's and laugh that I used to have that thought. Spending $2400 a month for private school for the kids over the past 8 years will do that.
Someone close to me was able to retire at age 50 several years ago on a single income and I'm always envious. #1, they were penny pinchers in the truest sense, but when his 401-K was really growing he was able to hit that time in the 90's where some years the market was growing 25-35% at times it seemed.
We will never see that.
This post was edited on 8/9/23 at 9:48 am
Posted on 8/9/23 at 9:45 am to Thundercles
quote:
how much I need to save to call it a career
Just a question here, but what financial and/or time capacity do you have to own a business venture of some sort? Something that you can do, and also keep your corporate job.
I’ve worked since I was in college. And I’ve typically worked for corporations across my working life. But in addition to that, I’ve owned various business ventures since I was in my 20s (rental real estate, a mortgage company and now an options trading business). Long story short: today I am retiring from my current employer at 58. I could have left last year, but I had to prove to myself that my options business was truly robust. It is… and I’m retiring with a higher income than what my employer was paying me (which was healthy enough).
Anyway, just something to think about. Be the captain of your own ship… as much as is possible.
Posted on 8/9/23 at 9:51 am to Weekend Warrior79
quote:
It's currently 67 to get the full SS benefits
Correct, note I said larger and not full. But once you get to 65 and can get Medicare you'll see the increase from 65 to 67 isn't worth the wait. It is tiny.
This post was edited on 8/9/23 at 9:57 am
Posted on 8/9/23 at 9:52 am to Jag_Warrior
quote:
Just a question here, but what financial and/or time capacity do you have to own a business venture of some sort? Something that you can do, and also keep your corporate job.
There are certainly some irons in the fire. Once I got myself in a comfortable earning position I started checking out what ventures are next and at least one of them will be starting next year to speed up this process.
Posted on 8/9/23 at 9:55 am to notiger1997
quote:
Spending $2400 a month for private school for the kids over the past 8 years will do that.
Yea, this is the ultimate killer; but you really have no other options in LA.
We started putting $1,000 a month into a UTMA as soon as we had their SS#s. Logic was the tuition at their school was around $8,500 for pre-K and $6,500 for elementary so we'd be saving enough already, planning ahead for HS, and building a nice nest egg for college. Now we're almost at $11k for pre-K; thankfully the elementary hasn't jumped as much.
Posted on 8/9/23 at 10:15 am to ynlvr
quote:
And I see the next generation in worse shape unless they can shake the materiality mentality of the boomers.
Yes. I see Gen Z talk about their debt load and approach to income and it makes me think there is a real reckoning coming when millennials, and then especially young millennials and Gen Z hit 60 and realize well, only 30 years of work to go.
Posted on 8/9/23 at 10:47 am to Thundercles
My wife and I make money than we've ever made before but I feel cheated out of the "American dream".
We bought our first house to live in March. We got screwed from both an interest rate and house cost perspective. We moved back to the south from the north where we didn't need cars so had to buy two vehicles with crazy prices and higher rates. Food costs more. I try not to think about it but just about everyday I get annoyed that we missed the sweet window of super low rates and affordable goods.
We bought our first house to live in March. We got screwed from both an interest rate and house cost perspective. We moved back to the south from the north where we didn't need cars so had to buy two vehicles with crazy prices and higher rates. Food costs more. I try not to think about it but just about everyday I get annoyed that we missed the sweet window of super low rates and affordable goods.
Posted on 8/9/23 at 11:36 am to Thundercles
It has to be getting harder for average working families to keep up with the steady price increases in every day necessities coupled with wildly over inflated real estate prices and the highest mortgage interest rates we’ve seen in over 20 years.
My friend is having to relocate and forced to home shop in this market, houses that were $400,000 just 5-6 years ago in the area he’s looking are now $650,000-850,000. They have over $240,000 yearly income, he wanted to make an offer on a $670,000 home but backed off when he found out that with $135,000 down his note on a 30 yr loan would be over $4500 a month including escrow.
My friend is having to relocate and forced to home shop in this market, houses that were $400,000 just 5-6 years ago in the area he’s looking are now $650,000-850,000. They have over $240,000 yearly income, he wanted to make an offer on a $670,000 home but backed off when he found out that with $135,000 down his note on a 30 yr loan would be over $4500 a month including escrow.
Posted on 8/9/23 at 11:52 am to Thundercles
quote:
Is this just a crisis bound to come to a head at some point in the next 20-30 years?
Next 10 years. A huge chunk of boomers retiring don’t have a lot saved either.
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