Hard to live on 100K per year ?

[97guns]

I live in the heart of the SF Bay Area with an income of around $70k, more than I ever made yearly working non college degree jobs and live very comfortably with money to save but I don’t.

The key for me is having the home I live in paid off, free and clear

[Car-Guy]

If I eliminated the cost associated with my hobbies, I could easily live on 60 to 70k a year and be comfortable in my chosen lifestyle.

[NW-Bound]

Quote:

Originally Posted by Bigdawg Too bad they only hire pharmacists in HCOL areas like NYC. Wouldn't it be nice if a pharmacist could get a job in a LCOL area maybe an hour or two from NYC? Imagine if we had freedom of choice like that.

But it is not "fun" living outside the city.

[MarieIG]

In our (middle class neighborhood on LI, a teacher can easily make more than that in our school district). As a still working couple, our income is well in excess of that. Our only "vacation" in the past few years was to fly to Pensacola to see his son get his Wings, so the money is not going there.

A large portion of our income goes to income tax (Fed, State). We get hit with the AMT as we had high deductions based upon State & property tax).

Our overhead for our primary (paid off mortgage) 1780 foot house on a 70 by 100 lot (with property tax) is over $26,000 a year.

LIRR commuting expense (approx $300 per month);

We paid our kiddos college tuition (State University) out of pocket. When needed paid tutors out of pocket. Until kiddos were established we were also carrying the costs of their cars (insurance / maintenance). No kiddos were given new cars, and there was no co-signing of loans).

We fund our 401(k)s and I am funding a non-deductible IRA.

Auto insurance is about $509 a month.

Life insurance.

Lately (vet) bills.

Auto-maintenance.

Home repairs.

We mow our own lawn and clean our own house.

We do buy good food (although not in Robby's class) from the supermarket and once and a while, local health food stores.

I am spend money (on vitamins and supplements) today buying my DH some glucosamine & chondroitin for his aching joints.

DH & I are driving 10 & 11 year old Hondas, respectively.

No, we are certainly not starving but are living a solidly middle class existence, without the "frills."

Our retirement income will be much less, however that will save us on taxes which is our biggest expense. We will no longer be funding the 401(k)s and IRA, and also plan to trim costs somewhat by moving to a lower cost of living area, which should further reduce expenses. DH wants to buy one high priced vehicle, and the money will be earmarked for that.

We do hope to travel more (and anticipate an increase in vacation expense as we will finally be able to take them) to visit the kiddos, and maybe even "real" vacations like noted by OP, however hope to fly during cheaper time frames and look for bargains for other vacations.

It will be a "new normal" for us.

[Sunset]

In this story the family doesn't live in CA or NY, both high cost areas. They live in St. Paul, Minnesota.

I found the radio interviews pretty fluffy, in that they didn't ask to many hard questions, even of the family that declared bankruptcy, and moved to MA so her hubby could take a $100K job and they rent an apt.

[Chuckanut]

This sad story is actually rather old. Andrew Tobias wrote a book about it in the 70's:

https://andrewtobias.com/getting-by-on-100000-a-year/

IIRC, one sad chap thought he would date fabulously beautiful women in NY and that these women would be content to wear jeans and a t-shirt while snuggling up with him in front of the TV. In reality, they expected dinner at a fine restaurant, followed by good seats at a hit Broadway production, then drinks at a swanky bar afterwards. Poor fool, he really miscalculated.

[Chuckanut]

Quote:

Originally Posted by NW-Bound My two homes together cost less than one tiny home in San Francisco, where I read that it is tough to get anything for less than $1M. Well, there are, but they are in less desirable neighborhoods, and are only 1BR, 1BA.

Yup. I know of a fellow who sold his home in silicon valley, bought a bigger replacement home in Arkansas, and a small 2 bedroom condo somewhere in the Carolina's. He also had about $500,000 left over.

[MarieIG]

Quote:

Originally Posted by Pilot2013 That won't change, until people choose not to live there. I never have understood it myself.

I can't speak to other people, but I was born here, grew up here, married here, and had my parents here. Parents helped me with the kiddos when they were young, and we helped my parents when they ill (and I would not have left them for anything, in any event). It wasn't until I was older that I fully began to appreciate the financial aspects of living here. Too old at this point and too close to retirement to look for another job out of State. Two of my kiddos have already moved out of State, one is actively looking for a job out of State, and the others are planning to move out of State at an indeterminate time in the future. DH and I plan to high-tail it out of here after retirement.

[NW-Bound]

I have a cousin who sold her house in the LA area, and moved with her husband and kids to Texas, the DFW area. I do not know if they owned the LA home outright or not, but they had enough money to pay for a bigger and newer home in cash, and bought also brand-new furniture.

They lasted about two years there. Not fun, according to them. So, they moved back to the LA area, and were fortunate to do that after the housing bubble burst. And so, they were able to get a larger home than the original one. And they have been living happily since.

See how people's definitions of "fun" are different? If you want "fun", and too many people have the same idea, it's gonna cost you.

[razztazz]

Quote:

Originally Posted by REWahoo Haven't we had a couple of posters saying they were having problems making it on $250K per year? All depends on your perspective of what "making it" entails.

Aren't there posters who have said they 100 Grand is their discretionary travel budget?

[razztazz]

Quote:

Originally Posted by RunningBum $100K..less income and FICA taxes...less retirement and college savings...other costs associated with kids. Not as much as you might think. Not saying they aren't spending on things they shouldn't, but $100K working wage is not the same as $100K retirement withdrawals which may be lightly taxed.

Which just goes to show how distorted things really are. The tendency is to say: "He's making the median and therefor he must be doin' OK." Now, we have a case being made that twice the median is not enough.

[NW-Bound]

Quote:

Originally Posted by Sunset In this story the family doesn't live in CA or NY, both high cost areas. They live in St. Paul, Minnesota. I found the radio interviews pretty fluffy, in that they didn't ask to many hard questions, even of the family that declared bankruptcy, and moved to MA so her hubby could take a $100K job and they rent an apt.

I finally read the article, and also the radio transcript. No details here. All fluff.

But I can see how they do not have a lot of money left over. $100K is gross income, and after taxes, mortgage, health insurance, kid's expenses, etc..., that is not the same thing as a retiree living on $100K and having Medicare.

My son, an engineer just 5 years out of school, does not make $100K, but is living very well in his own modern 2,600 sq.ft. home, for which he paid $350k. If he had a non-working wife and a couple of kids, he would not feel so flush.

[jkern]

The $100k per year standard of living is so dependent on individual parameters and geographical location that it makes the article useless.

I have lived in the SF Bay Area my whole life and I have seen cases where $100k per year is poor. After tax and 15% towards retirement a family might have $50k to $55k left. Depending on age of kids, daycare is about $12k per year per kid. Depending on health insurance employer subsidy, that could be $25k per year per family. Transportation costs are much higher here too. If you had to cross bridges to go to work, that can add up to $3k per year alone. All this is before the 800 lb gorilla in the room HOUSING.

[cathy63]

Some of you might be interested in some discussions that are occurring in the Data is Beautiful reddit here: https://www.reddit.com/r/dataisbeautiful/

People from all over the world are using Sankey diagrams to show how their monthly or annual income is spent. It's quite interesting to be able to visualize some of the differences in lifestyle and priorities.

[MarieIG]

Quote:

Originally Posted by Sunset In this story the family doesn't live in CA or NY, both high cost areas. They live in St. Paul, Minnesota. I found the radio interviews pretty fluffy, in that they didn't ask to many hard questions, even of the family that declared bankruptcy, and moved to MA so her hubby could take a $100K job and they rent an apt.

Barring uncontrollable issues, such as extreme medical issues/ job losses, typically, if they declared bankruptcy, most likely they were spending too much. (While not necessarily financially savvy, I have figured out it's a bad thing to spend more that you make.)

IMHO, some type of budgeting/ spending control is necessary. It is possible to outspend almost any income. (Example Michael Jackson & Nicholas Cage).

[Luck_Club]

With DS in his senior year of high school, wife and I have just been through the child rearing period.

Where we live which is in the Northeast, it isn't easy doing right by your family and for your retirement future. In are neck of the woods a $100K just doesn't carve out much of a standard of living. To keep it in perspective a family of 3 receives around $40K in welfare benefits. So really it is like being a bit under twice the poverty level, when you consider the 30% tax bite.

[gayl]

My income was 56k last year & I only afforded 2 long cruises, spring in Belgium, adding 12k to savings in 2017 (a typical year). But then I only have a gardener & a kid who cleans my house every other week, donate around 2k to charity. So my standard of living is low

[IMATERP]

Lived in DC for the first 40 years of my life. I worked for a couple of non for profits and enjoyed my work - although I didn't make much money. In 1987 I sold my car and made a commitment to pay off a small one bedroom condo. It took me 10 years to pay it off and complete a Masters Degree. I learned then, it was all about life choices.

Sixteen years later - I'm ready to retire all because I've made prudent financial choices. I also still own a flip phone and drive a 10 year old Honda.

I
(11 days to ER)

[Nemo2]

Quote:

Originally Posted by IMATERP it was all about life choices.

Yup.

[karen1972]

When I lived in Chicago burbs I could see that as being a very true statement. you certainly didn't feel rich, everyone else made that same amount too.. which meant everything cost a lot especially day care, after-school care, summer camps.

To me fees/taxes, I easily spent an extra $15K+ in that alone being there. Property tax $10k, parking fees of $25/day, 11.5% sales tax it adds up very quickly, etc

At the end of the day, I couldn't imagine retiring there, and we moved. its just too much money not adding any value to my life. For $8k difference in property tax I could vacation all over the place.