I've already made peace with the fact I likely will not - my income has gone up 8x in 10 years and I'm still barely keeping up with the cost of things, barely any real savings, etc. I'm just very lucky to have no real debt. Now, wages are kind of flatlining and stagnating at my current level. Prices always increasing at a savage pace. And I'm one of the ones that's doing well compared to my peers - I have friends that I am doubtful they will survive into older age without significant government intervention.
I am just trying to stay healthy enough to be able to stay sharp enough to work into my 70's. I think the system is "working as intended" honestly - if workers are constantly worried about basic survival, how can they ever organize? It keeps people in line far too often, all the while the wealthiest keep getting wealthier. I have a very hard time taking anyone seriously that says this system is working well (at least in the US).
I'm not even mentioning the fact that if you are <40 there is virtually no chance you are going to get social security benefits - the political elite nowadays don't even try to pretend like that's not a thing anymore.
So let's assume something like $25k for first job. That would be $200k now after the 8x. Poverty line in SF right now is $82k, so depending on where you live, $200k isn't that much.
Especially in places like Washington state, where the latest stats tell us you need an income of $150K to even consider buying a home (averaged across the state).
It depends on what you want out of retirement. If you are making 200k in a high cost of area, your home will be worth several million.
That's where the retirement money went. If you expect to be able to die without tapping the retirement account, you will have a problem. You need a reverse mortgage or to sell out and go back to renting.
I think that is over-stated. Much of it depends on the home people want, how long they will save, and commute distance acceptable. At 200k, it isnt that people can't buy a house, it is that they dont like what they can afford.
You cant afford a downtown penthouse/mansion on SF & NY with 200k, but you can absolutely buy a home in both locations.
thanks for clarifying. I ready it the other way in that you make 8x but you feel you were doing no better at keeping up with the costs of living (e.g. you were on the same track before)
I read it that way because of this:
>my income has gone up 8x in 10 years and I'm still barely keeping up with the cost of things, barely any real savings, etc.
I made those sorts of wages, and at least for me what happened initially as income went up is I went from drowning to treading water. Instead of having a car that doesn't run or a suspended license from being unable to pay a speeding ticket, or a dentist visit many years deferred, those issues get taken care of.
Salary that low and you're not keeping up, you're falling behind. It's entirely possible to make 8X as much and feel you're barely advancing. While this is progress, it's not very satisfying progress because it feels that falling back into the previous pit is not really ever very far away.
I made a joke to my GF about ten years ago that I'm going to write a travel book called.
Live Flat Fucking Broke in San Francisco for Only $300 a Day.
Take one person in a non married couple earning $116k and the other unemployed. Strip off taxes, rent, utilities, gas and auto insurance, FOOD. Ain't much left over.
I don't expect to ever want to retire. I took 2022 and 2023 off to do independent research while living on savings.
I didn't find a job because of finances but because of being unbelievably bored and unmotivated after the first year.
The worst part is that the two years subjectively felt like they went by in a blink of an eye. That is not really what you want in retirement with what waits for you at the end.
I took two years off during a job transition in 2010. I’ve been dreaming about it since. I traveled the US with my Subaru and my Trek; I sculpted; I took an Italian class; I took an online astrophysics class; I gardened; I backpacked; it shot by in blink and I hope I can retire before I’m dead and do most of that again.
The majority of people retire sooner than they want to.
"In the Transamerica survey, 56% of retirees said they retired sooner than they had planned. A much smaller share, 7%, retired later than expected. Only 37% retired on their own schedule."
...
"nearly half of those who retired earlier than planned blamed their health: physical limitations, illness or disability. Roughly two-fifths blamed their jobs: They were laid off, downsized or lured into early retirement, or they were no longer happy at work."
...
"“We ask retirees why they retired sooner than planned and, by and large, it’s due to either personal health issues or employment-related issues. They may get laid off, bought out, reorganized, and it’s extremely difficult for older workers to find work.”"
This is the survey of people who have already retired. It might be that only 10% of people can afford retirement. This survey has no bearing on those who can not/will not retire.
That would be a good bit of info to know but also the retirement situation is changing quite rapidly by the decade so the correlation may not be as instructive as it could be if things were static
I'm confused. This is about retirement savings and cost of living. If they don't already have a retirement savings, how would they after the age of 50?
People do not want to leave the house they've been living in, whether they worked hard to get a big house or their family has been in the house for generations. Moving sucks worse when you're older and have to get used to new things after decades of nothing changing.
Americans retirement plan should be to learn Spanish and save some money to live in Latin America. There are pretty good places where the QOL is good to retire.
Around 20 years ago I lived in La Paz BCS Mexico (small city near Los cabos). There was a decent number of old Caucasian folks chilling out at the malecon (broadwalk) everyday.
That place is more expensive now, but there are others in central/south America with good cost/qol
Definitely a problem. Aside: the US retirees I saw in Mexico a few years ago seemed to group together in a few locales that were a bit wealthier or touristy. e.g. Puerto Vallarta and Ajijic.
Pricing out thr locals occurs in wealthier countries too. Very noticable in my country (New Zealand) which encourages wealthy foreigners (Peter Thiel, Shania Twain) to buy up nice real estate over here. Our lefty government slows it down but then our righty government gets in and they open the gates for a couple of million down. A bad deal.
One-off sales are shite economically versus recurring revenue.
New Zealand's dear leaders don't seem to understand the value of selling subscriptions.
> Aside: the US retirees I saw in Mexico a few years ago seemed to group together in a few locales that were a bit wealthier or touristy. e.g. Puerto Vallarta and Ajijic
Yep. People in Spain started to label what is happening 'colonization'. They complain that the language you hear most in Barcelona city center is neither catalan nor castilian - its English. And some waiters can only speak English - they don't know catalan, castilian, basque, valencian etc. Gentrification is horrible of course - the city centers across Spain have become expensive even for white collar Spanish professionals like engineers, lawyers, doctors.
There is going to be major flashback against rich immigrants at this rate - like how it happened in Lisbon.
This is pretty interesting to me. The pattern is similar to what's happening between Mexico and the US: A lot of people emmigrated from Spain(Mexico) in the past , looking for better jobs and pay (I remember seeing plenty of Spaniards working in Scotland hostels when I traveled there). The locals (Britons/Americans) revolted against said immigration with the justification of lost jobs, and reduction of wages.
Now the roles inverted somehow: Spaniards/Mexicans don't like people immigrating to THEIR country. Even if they do it legally and inject money to the local economy. Mainly because they are making the cost of living higher than what the locals can afford.
I personally don't care people coming to gentrify Mexico. Globalization cuts both ways, and.
> Now the roles inverted somehow: Spaniards/Mexicans don't like people immigrating to THEIR country. Even if they do it legally and inject money to the local economy.
Its simply because that 'injecting money to the local economy' thing is a false proposition. A rich immigrant doesn't buy 100 shoes, 10 cars, or a dozen breads every day. They consume only as much as any other person would do. Their benefit to the local economy is negligible as a result. But...
> Mainly because they are making the cost of living higher than what the locals can afford.
...the difference between the Spanish, the Mexican immigrants in the US and the new wave of (mainly Angloamerican) immigrants in places like Spain is that the latter are rich immigrants. Even in the case of a merely working class American or Brit moving to Spain, the immigrant has much more income or life savings than the average Spaniard due to the high cost of living in the US or the UK etc. So when they come to cheaper places, they directly gentrify even the white-collar professionals from the city centers and coastal areas. If a white collar lawyer and engineer cant cope up with the rising housing costs and food prices, there is no way that the average Spaniard could afford those either.
So in the current dynamic, these rich individuals gentrify the people of the target nation out of their cities entirely, like in the case of Barcelona. Some locals started to call this 'a colonization' recently.
> The intersection between “poor countries” and “nice place to live” is limited. I think we’ve largely forgotten organized crime still exists
Nah, the income of the average golden visaer or digital nomad is already a few multiples of even some European countries' median wage. The difference is too high. They are gentrifying even parts of Europe.
10 years ago I took a few months between jobs during which I was able to estimate how much money our family of 4 would need per year to maintain a modest middle class lifestyle. That number turned out to be around 130k _after_ taxes. And that was a decade ago, it’s probably close to $170-180k now. I frankly don’t understand how people with five figure incomes are able to even survive in our neck of the woods. And yeah, with the real inflation being as high as it is right now, if I do decide to retire, I’ll have to move to a much cheaper country even though I’m financially very well off. The exponent does that to ya.
I think your interpretation of 'modest middle-class lifestyle' is incredibly skewed. That level of net income is, minimally, a 220K gross income. That is more than 90%+ of households make. By definition, earning in the 90th percentile means you're well above middle-class.
If you’re in rural Minnesota that might be true. But there are no tech jobs in rural Minnesota. And where I live rent alone can run $50K a year, and mortgage is scary to even think about nowadays. Then there’s $20K in medical insurance (before deductibles), which if you do not work you’d have to pay yourself. Then also $24-25K/yr for groceries, and $6-7K for utilities. Then there’s car insurance, and home insurance. That’s $100K already and we didn’t even get to disposable income, home maintenance (I just paid $30K for a rather modest master bathroom remodel), subscriptions, and a modest vacation once a year. For most people there’s also a car loan or two to worry about. Also I own a house, and the property tax alone is $18K/yr. There you go.
Those expenses sound quite high, that is the problem. Middle class is still couponing - groceries should be half that at best. Just don’t eat organic or top quality cuts. Even in HCOL it is possible to rent a passable 2-bedroom for 36K a year. And a house with 18K property tax does not sound middle class to me at all.
It just that we’ve severely stretched the definition of middle class and people’s expectations in the US are too high. That’s why immigrants will eat your lunch any day.
Childcare is the one expense that unfortunately hits middle class the hardest, no way around it. I think there’s room there to relax the regulations around childcare a bit (allow at home daycares, relax max number of children limit) - availability at this point might be more important than quality.
That’s not “organic”, that’s Kroger / Trader Joe’s grade groceries for 4 people. Middle class, to me, means “has shelter, is able to save for retirement, raise kids, and doesn’t have to worry about going bankrupt due to medical expenses”. I’m not willing to compromise on any of those things to define “middle class” more conveniently for the ruling class.
If you go to MIT's living wage calculator, they do the math for you. For a family of four living in SF, they estimate ~$15,400/year in food costs (a bit higher than what I said, but still way less than $24K. Same for housing - they put the costs at ~$35K / year.
The big difference is family of 4 with 2 working (childcare costs) versus only one working - in the former case, living wage (read: middle class wage) for a family of four is ~$164K in SF, and in the latter it is only $113K (as I mentioned in my previous comment).
It's been interesting to see the different financial perspectives on the threads here. I don't know if people haven't done the math or just think a middle-class lifestyle is supposed to be living in mortal terror of an unexpected bill or expense.
I personally think of it as an aspirational descriptor, maybe on par with the lifestyle a single union-employed factory laborer could have afforded many decades prior. I don't care if that now requires a 90% income. We're a wealthy country, that's reasonable. If living in the 50th percentile is a fraught subsistence wage...that's a problem!
My guess is $220K for a family of four if you don't already own a house is not excessive at all. Housing is bonkers. Owning the real estate free and clear would make a big difference, but if I "only" had $220K to retire on and had to pay my rent, I'd move somewhere cheaper and I like it here.
Most of the developed world has effective tax rate of 30-50% https://en.wikipedia.org/wiki/Tax_Freedom_Day Given that fact I find pensions are very low in Canada/USA. I don't see pension-age population as freeloaders.
The best and most rational answer to the problem that is being discussed in this thread. The solution to sociopathic profiteering that destroys the society is not 'downsizing' and making peace with it or moving to poor countries and gentrifying the locals - its fighting it.
I am just trying to stay healthy enough to be able to stay sharp enough to work into my 70's. I think the system is "working as intended" honestly - if workers are constantly worried about basic survival, how can they ever organize? It keeps people in line far too often, all the while the wealthiest keep getting wealthier. I have a very hard time taking anyone seriously that says this system is working well (at least in the US).
I'm not even mentioning the fact that if you are <40 there is virtually no chance you are going to get social security benefits - the political elite nowadays don't even try to pretend like that's not a thing anymore.
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