First tax increase of 2017 announced

[Exterous]

You'll face a tough crowd here OP - mainly because the view on SS has changed since its inception. Back when it was started the eligibility age was still 65 but the life expectancy was 61.7. It was viewed as a catastrophic situation safety net for the few that made it that far. People were working far closer to the end of their life and\or living with family. Now life expectancy is getting close to 80, the eligibility date is the same and the viewed safety net position has moved quite a bit higher as people expect it to provide for ~15 years of retirement. Thats a bit different from the original intention. Personally I'd like to see a gradual increase in the eligability age combined with some changes to the SS tax cap. Many here aren't willing to increase the age despite the pressure it puts on SS and far greater long term problem that creates for SS as life expectancy continues to climb

When most white collar professionals in your area make ~1/3 to 1/2 of that amount, yes, it most certainly make you a "high rolling Rockefeller" by comparison.

If you think this is true you don't know much about Rockefeller.

 

[Fanatical Meat]

The problem is the loose definition of Rockefeller rich.
I will point out the above budget shows a pretty comfortable life add a nice vacation and being able to buy nice gifts plus have 15-20k a year to save is doing pretty well in my book. Back to the point if that person had to pay an additional $750 in taxes its hardly going to effect their budget.

 

[child of wonder]

A $2000 mortgage? Do you really need to live in a $640,000 McMansion?

$150 cable? Who watches TV anymore?

$400 car payment? Pay cash for used ones. For $3,000 to $4,000 cash there are plenty to chose from. And $400 will only pay for one new car anyway.

McMansion? A $2,000 mortgage payment would be a $300,000 principal at 3.75%, $400/mo for property tax, and $110/mo for homeowner's insurance combined.

Amazing. Cable TV and internet is unreasonable. A single $400 car payment is unreasonable. Rich bitches! Pay more taxes!!!

 

[purbeast0]

Well that sucks. I always enjoy the extra money in the last few months of the year. That won't last quite as long now I remember the first time my paycheck was bigger in December I emailed HR because I thought there was a mistake with accounting or something, then she explained to me that I'm "Rockefeller Rich" and then I went out and bought a Lambo to keep next to my Ferrari in my 5 car detached garage.

 

[child of wonder]

Just a point of fact: $500 Roth Ira savings is SAVINGS. So $2500 to go towards "savings", and that ignores the 6% 401k you mentioned. Shit! If the idiot baby boomer generation were doing this shit already we'd have a booming economy with millennial's sitting pretty! Boomers would retire at the normal age, if not sooner, and everyone else would move up the ladder.

Sure, but I think we'd both agree the 6% to 401k and $500/mo for Roth IRA is what someone "should" be doing to prepare for retirement. That's why I included them. And if someone who was earning half as much suddenly were bumped up to the $140k in my example, they "should" also do the same.

 

[child of wonder]

So you're basically saying you don't have any money after you spend all your money.

Name anything in that list that is an unreasonable expense or that should be eliminated so this sample family can pay their "fair share."

 

[child of wonder]

The problem is the loose definition of Rockefeller rich.
I will point out the above budget shows a pretty comfortable life add a nice vacation and being able to buy nice gifts plus have 15-20k a year to save is doing pretty well in my book. Back to the point if that person had to pay an additional $750 in taxes its hardly going to effect their budget.

And I never claimed the extra SS tax would be a burden, only that it's frustrating for the limit to go up all the while some political leaders and think tanks suggest means testing as a way to curtail SS costs.

 

[fskimospy]

Name anything in that list that is an unreasonable expense or that should be eliminated so this sample family can pay their "fair share."

That's incredibly easy, haha. You are claiming that a family of four spends $1,000 a month on food alone? WTF?

On top of that you are complaining that they can only save $2,000 a month on top of their retirement savings. Saving $25k a year is pretty excellent.

 

[child of wonder]

That's incredibly easy, haha. You are claiming that a family of four spends $1,000 a month on food alone? WTF?

On top of that you are complaining that they can only save $2,000 a month on top of their retirement savings. Saving $25k a year is pretty excellent.

As a father of two teenagers, it's pretty easy to spend $1,000 on food.

Saving $24,000 per year is good. When did I complain? Spend $6,000 for a nice family vacation, $1,000 on car repairs, $2,000 on home repairs or improvements, and $1,000 on some other unexpected expense (medical bill, braces, etc.) and now it's $14,000.

The point of the mock budget was to show $140k is not rich by any stretch of the imagination. Comfortable, yes, but not rich.

 

[fskimospy]

As a father of two teenagers, it's pretty easy to spend $1,000 on food.

Saving $24,000 per year is good. When did I complain? Spend $6,000 for a nice family vacation, $1,000 on car repairs, $2,000 on home repairs or improvements, and $1,000 on some other unexpected expense (medical bill, braces, etc.) and now it's $14,000.

The point of the mock budget was to show $140k is not rich by any stretch of the imagination. Comfortable, yes, but not rich.

Saving $25,000 a year on top of retirement savings is very comfortable. I don't know how you are trying to define 'rich' but that seems pretty rich to me. In my household we make approximately $150k and I consider us to be rich by any reasonable standard.

People tend to adjust their ideas of wealth based on what they make. Studies show that when people are asked what it takes to be rich they say whatever they make plus 50%. Considering the median household income for the US is about $50k, almost three times that is rich to a lot of people.

 

[bshole]

That's incredibly easy, haha. You are claiming that a family of four spends $1,000 a month on food alone? WTF?

On top of that you are complaining that they can only save $2,000 a month on top of their retirement savings. Saving $25k a year is pretty excellent.

That is about what my family of four pays for food a month. I am paying $200/month for my son's school lunch alone. Having their friends regularly emptying our pantry and ordering pizzas doesn't help.

 

[Ackmed]

McMansion? A $2,000 mortgage payment would be a $300,000 principal at 3.75%, $400/mo for property tax, and $110/mo for homeowner's insurance combined.

Amazing. Cable TV and internet is unreasonable. A single $400 car payment is unreasonable. Rich bitches! Pay more taxes!!!

He's clearly ignorant and making blanket statements. Mcmansion, Rockefeller rich? Please. I'm actually closing on a house today at 3pm. $325,215 at 3.25% (VA loan). $1576.79 a month with taxes and insurance included. 5br almost 4k sq foot, new home just finished two weeks ago. Pretty excited, except for fucking moving.

$325k is probably nothing in certain parts of the country, get you a 1500 sq foot home. And taxes would be much higher. Here it's not too bad. I don't do bad salary wise, I shouldn't have to pay more percentage wise for SS than someone who makes less.

This thread is annoying because people like to project their beliefs and opinions on others. Like most threads I guess. Not everyone lives the same, has the same needs or desires.

 

[bshole]

Saving $25,000 a year on top of retirement savings is very comfortable. I don't know how you are trying to define 'rich' but that seems pretty rich to me. In my household we make approximately $150k and I consider us to be rich by any reasonable standard.

People tend to adjust their ideas of wealth based on what they make. Studies show that when people are asked what it takes to be rich they say whatever they make plus 50%. Considering the median household income for the US is about $50k, almost three times that is rich to a lot of people.

Rich to me implies that you could never work another day in your life and still live a comfortable life..... that no medical condition could financially ruin you. Until that point is reached, you are wage slave like everybody else.

 

[fskimospy]

That is about what my family of four pays for food a month. I am paying $200/month for my son's school lunch alone. Having their friends regularly emptying our pantry and ordering pizzas doesn't help.

So again, you're saying that you spend that much because you're ordering a bunch of pizzas all the time.

This isn't to condemn anyone's life choices as pizza is wonderful, I'm just saying that contending that you aren't wealthy because the monthly pizza budget is straining you isn't compelling to me.

 

[fskimospy]

Rich to me implies that you could never work another day in your life and still live a comfortable life..... that no medical condition could financially ruin you. Until that point is reached, you are wage slave like everybody else.

Well that's your idea of rich but my guess is that a lot of people would consider having pizza or restaurant food whenever they want while fully funding their IRA and still saving $25k a year for nice vacations and such to be rich. It's all about different perspectives, and people tend to redefine rich as 'richer than me'.

 

[bshole]

So again, you're saying that you spend that much because you're ordering a bunch of pizzas all the time.

This isn't to condemn anyone's life choices as pizza is wonderful, I'm just saying that contending that you aren't wealthy because the monthly pizza budget is straining you isn't compelling to me.

I was responding to your contention that $1000/month was unreasonable for a family of four. I think it is kind of normal especially if you have teenagers.

 

[purbeast0]

Saving $25,000 a year on top of retirement savings is very comfortable. I don't know how you are trying to define 'rich' but that seems pretty rich to me. In my household we make approximately $150k and I consider us to be rich by any reasonable standard.

People tend to adjust their ideas of wealth based on what they make. Studies show that when people are asked what it takes to be rich they say whatever they make plus 50%. Considering the median household income for the US is about $50k, almost three times that is rich to a lot of people.

I could definitely see that. It always seems like if you just made a little bit more money, everything would be so much easier because it would all just be extra disposable income if you keep all things equal prior to making that extra money. I do know as I've gotten further in my career and we're bringing in more money, we're definitely spending more money too. But at the end my retirement savings is still building which is important and we have a decent safe fund to last a few months if we ever lost a job. Now that we have a child obviously we have other expenses that we didn't prior.

But we don't "save" just to save. Any money that I save is typically saved to be used on a vacation, or some kind of home improvement.

 

[Fanatical Meat]

That's incredibly easy, haha. You are claiming that a family of four spends $1,000 a month on food alone? WTF?

On top of that you are complaining that they can only save $2,000 a month on top of their retirement savings. Saving $25k a year is pretty excellent.

For my area $250 for 4 isn't outrageous. We spend $75-125 for two about 4 times a month. Add two growing teens and I could easily see 1k.
I do need to point out a family making $140k should see a pay raise of at least $1500 next year so again even if there is pain to the new upper limit the pain will be short lived.

 

[Brovane]

Now life expectancy is getting close to 80, the eligibility date is the same and the viewed safety net position has moved quite a bit higher as people expect it to provide for ~15 years of retirement. Thats a bit different from the original intention. Personally I'd like to see a gradual increase in the eligability age combined with some changes to the SS tax cap. Many here aren't willing to increase the age despite the pressure it puts on SS and far greater long term problem that creates for SS as life expectancy continues to climb

The eligibility date has changed for SS. Anybody born after 1960 has a full eligibility date of 67 for SS. https://www.ssa.gov/planners/retire/agereduction.html

 

[zinfamous]

Nothing could be further from the truth. Not only do taxes drastically increase as your income passes $75,300 in a household, but you begin to lose deductions and credits along with it. Child tax credit goes away, child care deduction decreases, Lifetime Learning and American Opportunity credits disappear, student loan interest deduction, Roth IRA goes away, and the list goes on and on.

Trust me, those "high rolling Rockerfellers" that exist in the upper middle class/lower upper class range pay a huge amount of taxes and they are NOT living like kings.

My wife and I thought the same as you only 10 years ago when we were making $60k a year combined. "Those greedy people that make $100k+! They should be taxed more! With that kind of income we would live like kings!!" Then we moved up in our careers and found that we were completely off base.

I don't know man. Sounds to me that if you are making between 75.3k-150k per year and not taking advantage of all of the wonderful tax advantaged accounts and income-reduction incentives available to you that drastically reduce your taxes and continue to allow you to contribute to that Roth, then I'd say you are just shitty with taxes and/or enjoy pissing away that money to the feds at the same time you complain about being forced to do so. ...that, or you just aren't aware of how many options are available to you at that income?

Fire your accountant/CPA, maybe?

 

[zinfamous]

That's right. I tell people all the time that $100k isn't much money anymore. It's very difficult to have this type of conversation with people who make an average salary because for the most part they are just getting by.

The tax codes were put forth by the rich and benefit the wealthy. Why do you think they park much of their income in other vehicles such as real estate.

If I were you I'd live on $3-4k a month and bank the rest into an account that you can't touch. Keep doing that for 2-3 years and you should have nearly $100k. Look for ways to make more money and bank it all. You want to save to invest. Not save to save. Stay hungry. While you're doing this focus your attention on multi-family apartments. Do the research. When you find something take that $100k and put it down on a nice complex that has about 12-15 doors. Should cost you about $400-500k. Get a loan from the bank to cover your investment. Not all debt is equal. This is good debt. Have the tenants pay off your mortgage. Immediately you'll have positive cash flow to start paying off your mortgage and you'll have money in the bank. Grant Cardone has stated that he always expects to get 12% his first year. It only goes up year after year. Once you get yourself established buy another and then another. In no time these investments will be creating passive income.

That's exactly what I tend to do. I have a friend whose been doing this and is retired in his mid 40s. He gets to do what he wants and when he wants to do it. Total freedom.

I always wonder how much you have paid and continue to pay these hucksters for their excellent advice.

 

[zinfamous]

Name anything in that list that is an unreasonable expense or that should be eliminated so this sample family can pay their "fair share."

This family is too busy and struggling to spend that much on cable TV that they probably can't even watch, apparently.
That family is spending $150/month on cell service when most reasonable people are now paying ~$30/line per month on excellent, non-contractual carriers.

That family is only contributing half their annual maximum to a 401k (6% of 140k, but you could fiddle around and do way better), depriving them of greater tax savings and far, far, far greater interest accumulation in retirement, years later. They also aren't contributing to a trIRA which, in their situation, is way better than a Roth IRA. This family bitches about feeding the beast all the while doing so rather happily, by not reducing their taxable income and tossing away savings into useless things like expensive cell phone plans, cable TV that they probably don't get their monthly value from, car payments (lol--CAR PAYMENTS? who does that?), and $200/month on clothes. ....on clothes. seriously? Even with two kids, that is insane.

I can see where $1k /month on that family is reasonable, considering the average, but one could probably still shave another $100-200 off that monthly bill if they learn to cook, plan weekly, and just shop better. ...Oh, but maybe this family doesn't have enough time to cook and enjoy each others' time because they are desperate to squeeze maximum TV time in order to claim that they are getting some value out of a horrific $150/month cable/internet bill?

 

[zinfamous]

He's clearly ignorant and making blanket statements. Mcmansion, Rockefeller rich? Please. I'm actually closing on a house today at 3pm. $325,215 at 3.25% (VA loan). $1576.79 a month with taxes and insurance included. 5br almost 4k sq foot, new home just finished two weeks ago. Pretty excited, except for fucking moving.

$325k is probably nothing in certain parts of the country, get you a 1500 sq foot home. And taxes would be much higher. Here it's not too bad. I don't do bad salary wise, I shouldn't have to pay more percentage wise for SS than someone who makes less.

This thread is annoying because people like to project their beliefs and opinions on others. Like most threads I guess. Not everyone lives the same, has the same needs or desires.

....yeah, no shit. Honest question: is it worth living in a tiny town surrounded by cornfields for the big house and about 5 types of available jobs? Obviously that's great for some people, but I tend to worry about: being bored, access to quality food and entertainment, local job situation with an extremely limited set of in-demand skills (no mobility if shit hits the fan)

 

[Ackmed]

....yeah, no shit. Honest question: is it worth living in a tiny town surrounded by cornfields for the big house and about 5 types of available jobs? Obviously that's great for some people, but I tend to worry about: being bored, access to quality food and entertainment, local job situation with an extremely limited set of in-demand skills (no mobility if shit hits the fan)

I don't have a corn field anywhere around me. Knoxville isn't the biggest city, but sure isn't the smallest either. Almost 200k. Sure there are much bigger, many much smaller. I don't have any issues with food or entertainment. Or the local jobs. Pretty much any job type available, including nuclear scientists, rocket scientists, among other such jobs, jobs one town over at Y12. The place that made the nukes that got dropped on Japan. House is in a new neighborhood, very close to anything you'd want to do. Getting AT&T gigapower Internet hooked up on Thursday, can't be in the boonies doing that.

Yeah you can drive about 30 mins from Knoxville and be way out in the country, especially going towards the Smoky Mountains. I know you're just trying to get under my skin and troll me, not going to work. Too excited about today! Even took of from work, closing in 2 hours and 20 minutes.

 

[fskimospy]

I don't have a corn field anywhere around me. Knoxville isn't the biggest city, but sure isn't the smallest either. Almost 200k. Sure there are much bigger, many much smaller. I don't have any issues with food or entertainment. Or the local jobs. Pretty much any job type available, including nuclear scientists, rocket scientists, among other such jobs, jobs one town over at Y12. The place that made the nukes that got dropped on Japan. House is in a new neighborhood, very close to anything you'd want to do. Getting AT&T gigapower Internet hooked up on Thursday, can't be in the boonies doing that.

Yeah you can drive about 30 mins from Knoxville and be way out in the country, especially going towards the Smoky Mountains. I know you're just trying to get under my skin and troll me, not going to work. Too excited about today!

I for one will say congratulations! If your experience is anything like mine then today is an incredibly exciting and modestly terrifying day. Hope it all goes well!