This was brought up in a different thread but I didn't want to hijack. It seems like everyone here is major breadwinners, no median income people. Our household income will be about $160,000 this year, for example. Anyone here that is earning close to the median household income (I think ~50k U.S.) who has a plan for ER? It seems that even with LBYM, ER is for the few....
Any middle class ER wannabe's?
- Thread starter laurence
- Start date
I don't want to rehash the whole INTJ thing, but we all know RE folks are (for the most part) 'planners' who understand money. For many, these skills likely pervade every aspect of their lives (look at the avg age of the folks on this board who are now having kids... older than the norm... probably planned that way), and also translate into higher paying jobs.... and those of us who do earn the median "household" income are likely doing it without the aid of a SO (speaking for myself, and probably most of the younger folks here).
From my own planning and endless Exceling, I know that even with the "median" income, it's a very attainable goal.... it's just a matter of priorities.
From my own planning and endless Exceling, I know that even with the "median" income, it's a very attainable goal.... it's just a matter of priorities.
Berkshire_Bull
Recycles dryer sheets
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My income from working last year was $16,000. Try low-income ER wannabe! I'll hopefully be getting a 2 to 3 fold raise upon grauation though. 
bruce1
Full time employment: Posting here.
Warning pre coffee post. $70,000 last year before tax. Spent about 32,000 after tax. I'm 52 this year and will probably work another year unless our reorg ticks me off too much. Spent everything I earned till about five years ago but had various positions with a company that has a good cola pension. Got to the point last year where pension will cover all expenses with some left over for fun. Will have income from a rental and a mortgage as well . Not awake yet have a week off.
Bruce
Bruce
Anyone here that is earning close to the median household income (I think ~50k U.S.) who has a plan for ER? quote]
Interesting you should ask...I've been off the boards for awhile because I took a second job to help us get to ER. It's a state university job so has better benefits (but poor pay, laughable in fact). We will probably make 60,000 this year, a high for us!! I'm an RN (25yrs) and he's a stay at home Dad. We have 2 sons 15 and 12. Our version of ER will probably include me continuing to work in some fashion, possibly 13 week travel assignments in places of our choice. We also have some real estate, nothing big but will help. I'm also the queen of thrift store shopping and yard saling and LBYM. Another thread mentioned seeing well-dressed people using food stamps, probably just an excellent yard sale find.
Off to work,
Judy
Great topic. Our household income was in the neighborhood of bruce1's, and DW and I have aspirations of retiring earlier than normal. I won't say early, as recent posts seem to indicate that defines retiring before age 55. We plan on it before 60, but that doesn't count I guess.
Still, 20 years from now, we may then fall under the cut, as talk of raising SS limits to 68, 70 or 73 surface. But I think early retirement for middle-classers depends on your savings rate, which would prolly need to be well above the historical average of 8%. Either that, or perhaps an additional leg for the retirement stool (the kind ya stand on, just to be clear ). Of course I'm refering to the one that seems to be going the way of the Edsel - a DBP, a pension. Having that guaranteed income stream during retirement takes the pressure off one's need to be anally (is that even a word?) frugal.
DW and I both have that benefit, as well as both having DCP's with employer-matching. If one's mortgage and other debt can be paid off prior to retiring, and a consistent long-term investment plan (DCA) is implemented, while keeping other expenses in a reasonable framework, I see leaving the work force and retiring ahead of schedule as a very possible outcome.
Having the majority of my friends in law enforcement, I see most of them work about 25 years, retire from that position young, then have to go out and start another full-time job for another two decades or so. If they adopted an invest-first mentality in their first years of employment with these police agencies, they wouldn't have to put themselves into that trap. Of course, I can count on one hand the number of these friends that knows even a little about personal finance/investing. I'm actually considered a geek among this crowd regarding my interest in finances.
But getting back on topic, maybe those of us in the middle income brackets with FIRE aspirations are more an exception to the rule. But that doesn't necessarily have to be. Maybe another poster in the thread is right that there is a relationship between this and education. If only enough people would educate themselves, perhaps they wouldn't have to work when the time came when they didn't want to work. To use a saying I had as my signature at TMF: It's not how much you make, it's how much you keep.
Bookm
Still, 20 years from now, we may then fall under the cut, as talk of raising SS limits to 68, 70 or 73 surface. But I think early retirement for middle-classers depends on your savings rate, which would prolly need to be well above the historical average of 8%. Either that, or perhaps an additional leg for the retirement stool (the kind ya stand on, just to be clear
). Of course I'm refering to the one that seems to be going the way of the Edsel - a DBP, a pension. Having that guaranteed income stream during retirement takes the pressure off one's need to be anally (is that even a word?) frugal.DW and I both have that benefit, as well as both having DCP's with employer-matching. If one's mortgage and other debt can be paid off prior to retiring, and a consistent long-term investment plan (DCA) is implemented, while keeping other expenses in a reasonable framework, I see leaving the work force and retiring ahead of schedule as a very possible outcome.
Having the majority of my friends in law enforcement, I see most of them work about 25 years, retire from that position young, then have to go out and start another full-time job for another two decades or so. If they adopted an invest-first mentality in their first years of employment with these police agencies, they wouldn't have to put themselves into that trap. Of course, I can count on one hand the number of these friends that knows even a little about personal finance/investing. I'm actually considered a geek among this crowd regarding my interest in finances.
But getting back on topic, maybe those of us in the middle income brackets with FIRE aspirations are more an exception to the rule. But that doesn't necessarily have to be. Maybe another poster in the thread is right that there is a relationship between this and education. If only enough people would educate themselves, perhaps they wouldn't have to work when the time came when they didn't want to work. To use a saying I had as my signature at TMF: It's not how much you make, it's how much you keep.
Bookm
Interesting you should ask...I've been off the boards for awhile because I took a second job to help us get to ER. It's a state university job so has better benefits (but poor pay, laughable in fact). We will probably make 60,000 this year, a high for us!! I'm an RN (25yrs) and he's a stay at home Dad. We have 2 sons 15 and 12. Our version of ER will probably include me continuing to work in some fashion, possibly 13 week travel assignments in places of our choice. We also have some real estate, nothing big but will help. I'm also the queen of thrift store shopping and yard saling and LBYM. Another thread mentioned seeing well-dressed people using food stamps, probably just an excellent yard sale find.
Off to work,
Judy
Ed:OOPs, sorry for the double post, out of practice. Judy
This is awesome, also very humbling. This year has been an all time high for us, and we'll probably drop at least 20k this next year, and SD is a high cost of living, but all of you are making it happen on less, makes me wonder what we are doing wrong!
It's so easy to fall into the make more/spend more cycle, it's always healthy to get a reality check. My wife and I lived in a 450 sq foot apartment as newlyweds, we didn't think we were poor! I think we stress about money more now than we did then. Only this last year did we stress less than the year before, not more, hoping as we get more financial control that will continue.
It's so easy to fall into the make more/spend more cycle, it's always healthy to get a reality check. My wife and I lived in a 450 sq foot apartment as newlyweds, we didn't think we were poor! I think we stress about money more now than we did then. Only this last year did we stress less than the year before, not more, hoping as we get more financial control that will continue.
A number of the median income earners, and former earners, I have seen post here seem to have jobs with pensions and retiree health benefits. Very very valuable and can be more valuable than a big wage.
Once I was looking at hiring someone away from local government. I could have immediately doubled what she made plus there was a good chance her pay would triple in a year or two. However, as a government employee if she stayed on she would get a significant pension as well as retiree health benefits. Needless to say, she didn't leave her job. Besides, she could work at a slower pace at her current job.
Sometimes I think I erred in not going for public employment.
Once I was looking at hiring someone away from local government. I could have immediately doubled what she made plus there was a good chance her pay would triple in a year or two. However, as a government employee if she stayed on she would get a significant pension as well as retiree health benefits. Needless to say, she didn't leave her job. Besides, she could work at a slower pace at her current job.
Sometimes I think I erred in not going for public employment.
Greetings laurencewill.
), yet money left over seemed to diminish at times. But this was easy to figure out if one tracks expenses with a spreadsheet or a program like Money. Years ago we didn't have cell-phones, now we have two. Just about every utility you pay likes to increase their rates almost annually. Property values have gone haywire, leading to jumps in property taxes, which in turn raises your homeowner's insurance. That also brings up increases in health and life insurance. Memberships to clubs and organizations. Tuition increases. Everyone seems to have their hand out, trying to take more money than in the past.
So, you may get a 5% raise every year, but the total increase in your expenses are sure to be perched a bit higher in that tree. No doubt it's a battle.
Bookm
Part of that is prolly because more of your money is going towards numerous expenses. DW and I had this same discussion a few months ago. Our combined income has increased every year (well, hers has mostly
), yet money left over seemed to diminish at times. But this was easy to figure out if one tracks expenses with a spreadsheet or a program like Money. Years ago we didn't have cell-phones, now we have two. Just about every utility you pay likes to increase their rates almost annually. Property values have gone haywire, leading to jumps in property taxes, which in turn raises your homeowner's insurance. That also brings up increases in health and life insurance. Memberships to clubs and organizations. Tuition increases. Everyone seems to have their hand out, trying to take more money than in the past.So, you may get a 5% raise every year, but the total increase in your expenses are sure to be perched a bit higher in that tree. No doubt it's a battle.
Bookm
In the past, perhaps, but certainly not now. In my state they were too generous with the plan 1 benefits, and in the very near future, the plan 2/3 folks will actually have part their pay (.75%) going towards the plan 1 folks rather than paying for their own benefits. As icing on the cake, many of the plan 1 folks did the work-rehire bit where they "retire", collect their pension, and then return to their same job 80% time.
That's the double-edged sword we in the public sector are handed, and the gripe we share among ourselves - "I'd look for a new job, but I can't give up the bennie's." (benefits)
In simpler terms, you have to suck it up for a while and hope you make it long enough to enjoy the benefits down the road. Which is similar to those in the military, who chose to be lifers. And once you get to a certain tenure with the agency, it's even harder to leave. But life's full of choices, ain't it.
Bookm
Bookm ( is that like Book'em, Dano! by the inimitable Jack Lord in Nord's stomping ground?)
I have used that -it's not how much you make- line a lot, and am usually looked at like I've just grown another head. But if you're one of this income group you can't lose sight of expenses and must keep your goals in sight. When you lose focus, you're lost. I also find it's important to build in those things you lke to do. We like to eat out occasionally so we do it. It's planned for so I don't feel guilty. We like to travel, so we plan for that. You only get one shot at this life and I don't want to think-I wish I would've...
Judy
My biggest year (my last) was $86K. The vast majority of my annual earnings were in the $40K-60K range. Except for the first 10 years of promotions, the wage increases generally came in increments of 3-6%.
But our savings rate improved every year by at least that much (if not more). It's much harder to raise your earnings than it is to lower your expenses!
But our savings rate improved every year by at least that much (if not more). It's much harder to raise your earnings than it is to lower your expenses!
Mr._johngalt
Thinks s/he gets paid by the post
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- 4,801
Hey Nords. Good Post! My salary history is similar to yours, but in our case, we always spent more than we made amd the gap increased as our income went up.
Thus, the more we earned the more we lived beyond our means. Obviously that couldn't go on forever.
Funny how many people seem to think otherwise
JG
Thus, the more we earned the more we lived beyond our means. Obviously that couldn't go on forever.
Funny how many people seem to think otherwise
JG
Hyperborea
Thinks s/he gets paid by the post
Of course there is the large extra deferred income in the form of a government pension. A job with a pension might be the best way for many people to FIRE. Unfortunately, most pensions are disappearing except for government employees and those that remain look kind of shaky.
They just don't make pensions like they used to back in the days. I'm afraid I will have to do it in the private sector and crawl across the middle class mark. I don't expect much in terms of offense but I will have to play "D" like the Chicago Bears back in the mid 80's. I have read a lot of articles saying salaries will not increase much and new employees in most industries will not make as much either. Awesome news for a person that is dropping serious money & time on an MBA. I will have to come up with something good to make it.
<<<<<< That is why my guy is angry
<<<<<< That is why my guy is angry
Greetings JWV:
Bookm
It certainly is. The moniker is job-related. I agree with your points completely too. I think I saw someone here with a signature line that more or less says that you regret more the things that you never tried than those you have. I think that's similar to your last line in your post, and it's true. You have to allow yourself a little fun while still saving.
Bookm
flipstress
Full time employment: Posting here.
- Joined
- Jun 23, 2004
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- 538
Hi, laurencewill. I am within the median household income range, and I dream of ER. Highest salary was $65K for about six months around the time of the Y2K panic. (I was a contract mainframe programmer.) I say dream because my plan for now does not go beyond just saving around 30% of gross.
I max into our deferred comp (457) plan, max my ROTH IRA, go for $50/month into one DRIP account, and put some teeny amounts gambling with individual stocks. It's tight and there's not much left for taxable-account savings. I started late so I am trying to save a lot. My plan is for 8 more years at this local government job--I'll be 51 then--and then I'll probably be barebones FI but will evaluate at that time if I'm ready for RE.
In the meantime, I am learning about asset allocation. I was wholly into the VFINX (Vanguard S&P 500) for my rollover IRA. I had read Bernstein's Four Pillars of Investing and Gillette Edmunds Retire Early and Live Well before I joined this forum so I knew the need for asset allocation but I thought I was limited by Vanguard into 2 transfers per year per account. The diversification advice on these forums finally got me to call Vanguard and I found out I can transfer, and I have taken steps towards diversifying just in the last six months. However, all my 457 plan money is in a broad-market index because that fund has the lowest expense ratio.
I want to stop being obsessed with checking my balances each day. I want to enjoy life more and avoid the monkish existence mentioned by another poster (Hyperborea?).
Hyperborea
Thinks s/he gets paid by the post
Again, the benefit of a pension available at a young age (compared to most pension plans) which is probably about as secure as a pension can be is the secret here. A pension, particularly a government pension, is probably the best way for most middle class wage earners to retire. To ignore the pension as the source of your ability to ER is to venture into the strange world of Galtian accounting and finance.
Mountain_Mike
Recycles dryer sheets
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I am not sure how high the "middle income" extends, but if I'm in it, I must be at the high side ($80K). Since I started working at age 20, my pension plan would let me collect 70% salary at age 55...thus, age 55 is the outer limits of how long I plan to work; I figure I can muddle through on $60K per year, since LBYM causes me to live on less than that. I look on the pension as my bedrock, with my private investments, ROTH IRAs, etc., as pure bonus.
Flipstress, you're correct in the desire to want to enjoy life each day. ER should be a goal, not an obsession. (I need to tell myself this often, too).
I'll sure be glad to walk out the working door for the last time.
Cheers....Mike
Flipstress, you're correct in the desire to want to enjoy life each day. ER should be a goal, not an obsession. (I need to tell myself this often, too).
I'll sure be glad to walk out the working door for the last time.
Cheers....Mike
Obviously the big variable I didn't really speak to is cost of living. My friend bought a bigger house than I for half the cost, he's in Deleware, I'm in San Diego. Now if only I could convince my wife to move someplace cheaper when we ER......
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