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What percentage is your household?
Old 01-18-2012, 06:57 AM   #1
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What percentage is your household?

NYT has a nice calculator that shows you what percentage your household income places you in around the country. There are a whole lot of people who are not making big bucks.

Edit: this calculator uses Census data which puts 1% at $380K. The Fed includes capital gains and puts it at $690K so this one makes you seem richer.
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Old 01-18-2012, 10:00 AM   #2
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By these measures most ER people are in the 99%. There was an article awhile back that suggested even some retirees with big stashes and/or pensions might be in the top 1%.

I'm conflicted, do I want to be in the rich set or in the saintly set?
Seems I get to be saintly .
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Old 01-18-2012, 12:36 PM   #3
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Originally Posted by Lsbcal
By these measures most ER people are in the 99%. There was an article awhile back that suggested even some retirees with big stashes and/or pensions might be in the top 1%.

I'm conflicted, do I want to be in the rich set or in the saintly set?
Seems I get to be saintly .
Depends on what you want to be compared to. I read somewhere if you about $30,000 a year, you would be in the top 1% world wide. So you might be " stuck" in the top 1% whether you like it or not
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Old 01-18-2012, 12:51 PM   #4
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Old 01-18-2012, 01:16 PM   #5
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Interesting exercise, not sure what to make of the result. Most tax software also does this using IRS data. Another data point perhaps.

I would be interested in a similiar tool for networth, if anyone knows of such a tool.
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Old 01-18-2012, 01:41 PM   #6
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Although folks say that it depends where you live, this article graphic seems to show that a certain amount will put you in the top 8% or so no matter where you live.
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Old 01-18-2012, 02:04 PM   #7
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1%. It helps to live in New Mexico!
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Old 01-18-2012, 02:09 PM   #8
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I am moving to New Mexico.
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Old 01-18-2012, 02:45 PM   #9
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The first "trick" in using the calculator is deciding what figure to use as your "income". Yes, assuming you figured your taxes correctly, you could pick a number from there, but would it be AGI, MAGI, gross income, etc. In reality, your actual "income" may be none of those things. To me, a better indicator of yearly "income" would be a combination of how much you spent (as in consumed - not what you added to savings for instance) PLUS the net change (positive or negative) in your net worth. I don't think I could quickly figure that one out, so why bother with the "tool".

What I "spend" right now, is significantly more than my official sources of outside income (pension and DWs SS). But, as far as gummint is concerned, they also look at how much I took from 401(k)/IRAs, etc., etc. And yet, in any year, my spending may or may not be offset by gains in investments. And, how do I figure in the increase in "value" of my delayed SS? Should I count that as income? What figure would I use? etc.

Unless I missed it, the article only alluded to the source of income (from gummint statistics) rather than the practical meaning to us 99 percenters of what income we should use.

I guess it's sort of an interesting concept, but doesn't shed much light IMHO. I know we've discussed "rich" many times and I don't think we've ever settled the question.

Personally, I've always been more interested in net worth than income, still I understand that from a tax perspective (or "fair share" argument) income is the more important factor - so far.
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Old 01-18-2012, 03:26 PM   #10
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I know folks who have fairly low income but high net worth -- and they would look "poor" just by using income statistics. Someone with $30K taxable income but with $3M net worth would show up as "just scraping by" but is likely to be rather secure.
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Old 01-18-2012, 05:01 PM   #11
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Originally Posted by donheff View Post
Edit: this calculator uses Census data which puts 1% at $380K. The Fed includes capital gains and puts it at $690K so this one makes you seem richer.
At an SWR of 4%, it would take almost $10,000,000 to generate $380K. While I am pretty sure we have a few members with that size of nest egg, I doubt that most of us do.

So, we are very nearly a "Retirees in the 99%" club.
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Old 01-18-2012, 05:46 PM   #12
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I am moving to New Mexico.
Why not Flynn, Michigan?

Darn! Even when both of us were working full-time, our combined income would not put us in the 1% in New Mexico, leave alone now with me working sporadic part-time (25% to 50% of full-time). I feel poor now

PS. Just as I started to feel rich from the fact that I am up $25K today already, and still waiting for my wife's 401k to report, and with only 71% in stocks. I knew it... Should have bought, bought, bought...
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Old 01-18-2012, 06:13 PM   #13
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Seems to me a single retiree with $150K annual income, say, would merit a higher % than a working couple with 2 kids and $150K/year...

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Old 01-18-2012, 07:46 PM   #14
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I saw the Times article and although I can't tell you exactly where I stand, I'm sure a lot closer to the 1% here in Vermont than I was in the Baltimore-Washington area!
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Old 01-18-2012, 08:51 PM   #15
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Except for perhaps my doctor and my dentist, I do not know anyone whose sole income would qualify him for 1% even in New Mexico. That level is $307K in Albuquerque, and it is yet nowhere as high as along the coasts ($500K+).

For a household income, I can see that couples who are both professional workers can qualify a bit easier. But then, I remember starting a thread about a professional couple having a rough time in NYC. Despite the husband having a doctorate from MIT and the wife having her own dentistry practice, they made only $400K in a place where the 1% level is $600K.
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Old 01-18-2012, 10:14 PM   #16
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If you are still working, the key takeaway is, perhaps, not what percent your HH income falls, but at what percent your HH spending falls (adjusting, of course, for different effective tax rates). The larger the difference between HH income ranking and your HH spending ranking, the faster you are FI, allowing you to R E.

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Old 01-18-2012, 11:59 PM   #17
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Originally Posted by Koolau View Post
The first "trick" in using the calculator is deciding what figure to use as your "income". Yes, assuming you figured your taxes correctly, you could pick a number from there, but would it be AGI, MAGI, gross income, etc.
You make a good point. I'm really tired of calculators and quizzes and comparisons that don't even mention whether it's an individual or household income, or whether it's AGI, MAGI, or taxable income.

FWIW, I used Total Income before we maxed out contributions to our HSA (not spent), Solo 401k and SEP-IRAs. It also helps to be self-employed in New Mexico having clients in California (NM has 5% State tax rate, low cost of living, but CA has high wages)! Just have to actually retire now...
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Old 01-19-2012, 12:03 AM   #18
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Originally Posted by RetireBy90 View Post
Interesting exercise, not sure what to make of the result. Most tax software also does this using IRS data. Another data point perhaps.

I would be interested in a similiar tool for networth, if anyone knows of such a tool.
Not exactly a "tool", but a table.

What should your Net Worth be? Net worth by age and by income.
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Old 01-19-2012, 07:10 AM   #19
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I found it interesting and reminded me how blessed I am.
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Old 01-19-2012, 10:08 AM   #20
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You make a good point. I'm really tired of calculators and quizzes and comparisons that don't even mention whether it's an individual or household income, or whether it's AGI, MAGI, or taxable income.
I think most of these types of quizzes and calculators use AGI, but not sure. As for individual or household, that's where it gets a lot fuzzier. It's actually neither. These types of calculators almost always count tax returns, and not households. So, if you have a married couple filing jointly, that's one return. If you have a married couple filing separately, that's two separate returns, although it's still one household. If you have four roommates living together, that's going to count as four separate returns, although that would still be one household.
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