how much money should someone be making by age 35?

[Exterous]

5% to retirement? So basically you never want to retire?

I was kinda curious what kind of income could be generated so I ran some numbers:
assuming an $80k salary and 5% savings starting at age 30 would get you a retirement account at 65 that would generate ~$23,000 per year at a 4% SWR. Plugging that salary in to Social Security gives an annual benefit of ~$27,000. So $50k per year at age 65. Not great but certainly doable.
5% at $100k salary gives a combined retirement income of $58,000
5% at $120k salary gives a combined retirement income of $65,500

More of a thought experiment as all kinds of questions abound like 'How much will SS actually pay?', 'What if the market over\under performs historical trends?', 'What do I actually want per year?' and 'Why didn't your salary change even once over those 35 years of working?'

 

[homebrew2ny]

The only correct answer is enough to be self sufficient.

 

[jpiniero]

'How much will SS actually pay?'

Age of course would matter, but zero.

 

[brianmanahan]

Age of course would matter, but zero.

there is an almost zero chance of that actually happening.

 

[Red Squirrel]

I guess that's why I never went high with my costs to begin. I'm very much in the upper middle class white collar pay class living in a blue collar neighborhood. I cut the cable cord, and constantly monitor my alarm, internet, cell, insurance, and energy bills. If they ever raise the price I immediately look at competition.

I try to live life below means as much as possible. I have an In law family that is exactly what I never want to be... the type that upgrade from a 65" TV to a 72" as if it was in anyway needed. It isn't. Game of thrones looks just as fine on my shit 42" plasma as does anything else.

And through things like that, it's why I have most of the mortgage paid off - and its why I can max out 2 401ks (18.5k ea), 2 IRAs (5.5k ea) , and an HSA (6.5k)... and still having leftovers for other investments.

But 5% for retirement is pretty scary, not going to lie. I love being able to count down the days of not having to deal with incompetent people.

One time costs like a TV arn't really the issue, it's all the reoccurring costs like bills and taxes, and you have no control over those. I personally don't tend to splurge much on big purchases either. Like I have a 55" HDTV that I bought when I bought my house, not even 4k. I did cancel cable and land line a while back though since I hardly used it. The biggest costs are hydro, gas, insurance, property taxes and those I can't change. Though it's crossed my mind to downsize to a trailer, I actually see really nice ones pop up now and then. They're expensive though, like 75k+. So is it worth paying just a little bit less than the price of a house for 1/4 of a house. Don't think those have basements either. Though some of them might. I guess it would make utility bills slightly cheaper too though. Less area to heat etc. Maybe even insurance is cheaper for those, not sure. It's car insurance that's really expensive though, house insurance is not really that bad.

Once I don't have to work anymore then I'll be able to move to a nearby city that is much smaller and cheaper to live in, and get more property for my money, so I'd have room for stuff like a wind turbine and solar panels. I'd also want a big wood furnace or wood stove for heat. If I can generate my own energy, and live in a place where taxes are like $200/year that's where I would save quite a lot. I still want to live life right now though, so while I could do things like live in a super cheap apartment and not even own property, that's just not living.

 

[ultimatebob]

5% to retirement? So basically you never want to retire?

I married a government employee, so she's guaranteed a sweet pension that covers something like 75% of her salary on retirement. That said, 5% isn't all THAT bad considering that it has a 50% employer match.

Besides, I plan on dying with I'm 70 from a heart attack due to too much crazy wild sex

 

[jpiniero]

there is an almost zero chance of that actually happening.

The Federal Government won't be able to afford it. Could be axed to avoid the deficit asploding, maybe to find a different social program or a war, something's going to happen. Wouldn't rely on Government pensions either, maybe if you are in your late 50s.

 

[brianmanahan]

The Federal Government won't be able to afford it.

at current payout levels it would run into trouble in the mid 2030's, but at %75 of the current level it would be fine until 2100.

all they need to do is make some tweaks to a few factors (contribution percentages, full retirement age, income limit, etc) and it would definitely be possible at the current level. they should be doing this now, but will probably wait until within 5 years of the problem to actually make the changes.

my retirement calculations use %75 as the expected payment.

 

[Aharami]

Well, I'm probably not representative, but I'll respond.

I'm 35. I make $230k + partnership distributions. But that aside, it's not really about the job. Those go away. Investments don't. I'd take my investments any day over my job.

Lawyer?

 

[Zeze]

When I was 35 in 1997 I earned $75K as an embedded software engineer in the defense industry living in Texas.

U.S. Inflation Rate, $75,000 in 1997 to 2018
According to the Bureau of Labor Statistics consumer price index, the dollar experienced an average inflation rate of 2.17% per year. Prices in 2018 are 57.00% higher than prices in 1997.

In other words, $75,000 in 1997 is equivalent in purchasing power to $117,751.87 in 2018, a difference of $42,751.87 over 21 years.

The current inflation rate is now 2.87%1. If this number holds, $75,000 today will be equivalent to $77,153.66 next year. The current inflation ratepage gives more detail on the latest official inflation rates.

Inflation from 1997 to 2018
Cumulative price change 57.00%
Average inflation rate 2.17%
Converted amount ($75,000 base) $117,751.87
Price difference ($75,000 base) $42,751.87
CPI in 1997 160.5
CPI in 2018 251.989

This was a fun read, thanks.

1. I'm surprised being a developer in 1997 didn't pay more.

2. You actually probably made $150K~ or so in 2018 dollars. Why? Because inflation does not account for specific industry BS price increases. Colleges & real estate weren't so crazy expensive as 2018.

 

[dr150]

i need to know if i'm dong OK at life or not

If you're not making a cool million AFTER taxes, then there's something really, really wrong with you!

 

[Hugo Drax]

i need to know if i'm dong OK at life or not

Why do you care? What you need to do is worry less about others and worry about yourself instead. Are you happy? Thats really the question you need to ask yourself, if not then you will need to figure out what the issue is and correct it. Too many people are miserable because they spend their lives worried about how others are doing instead of themselves.

 

[madoka]

i need to know if i'm dong OK at life or not

Your question is ambiguous. Are you talking about how many dongs you have in your life or are you talking about your dong in particular? If the later, then how are we supposed to know how your dong is if you don't post pics?

 

[madoka]

Why do you care?

Lots of guys want to compare dongs with others apparently.

 

[Exterous]

This thread took an unexpected turn

 

[vi edit]

I was kinda curious what kind of income could be generated so I ran some numbers:
assuming an $80k salary and 5% savings starting at age 30 would get you a retirement account at 65 that would generate ~$23,000 per year at a 4% SWR. Plugging that salary in to Social Security gives an annual benefit of ~$27,000. So $50k per year at age 65. Not great but certainly doable.
5% at $100k salary gives a combined retirement income of $58,000
5% at $120k salary gives a combined retirement income of $65,500

More of a thought experiment as all kinds of questions abound like 'How much will SS actually pay?', 'What if the market over\under performs historical trends?', 'What do I actually want per year?' and 'Why didn't your salary change even once over those 35 years of working?'

Do any of those numbers include company matches? Wonder how much that changes things.
For example, my wife and I have around 200k annual, we do 5% (max employee contribution) and a 10% company match. We also do a special contribution of another $100 per paycheck each to make up for the cap at 5%. I also put in $100 a month (yeah, I know, should do more but daycare, expensive scotch and excuses...) into a Roth.

Plus whatever social security we would get.
Plus we have around $1200 combined a month coming from a pension account from a previous employer.

 

[purbeast0]

Do any of those numbers include company matches? Wonder how much that changes things.
For example, my wife and I have around 200k annual, we do 5% (max employee contribution) and a 10% company match. We also do a special contribution of another $100 per paycheck each to make up for the cap at 5%. I also put in $100 a month (yeah, I know, should do more but daycare, expensive scotch and excuses...) into a Roth.

Plus whatever social security we would get.
Plus we have around $1200 combined a month coming from a pension account from a previous employer.

If you're making $200k annually you are not eligible to put money into a Roth so you may want to look into that.

Although this thread did educate me on the backdoor Roth so if you're putting into that, then nevermind!

(I still need to read up more on it myself and start contributing)

 

[Tweak155]

If you're making $200k annually you are not eligible to put money into a Roth so you may want to look into that.

Although this thread did educate me on the backdoor Roth so if you're putting into that, then nevermind!

(I still need to read up more on it myself and start contributing)

The Roth IRA qualification is modified AGI based, so if you max your pre-tax options and take advantage of that new $24k standard deduction (if married & filing jointly), you can earn a decent bit above $200k annually yet still contribute to the Roth without any back door methods... and then keep contributing through back-door methods when you hit the measly $11k/yr cap (again, assuming married couples).

 

[pauldun170]

At 35, you should make enough money to afford necessities (Food, Clothing, Housing and important expenses) in your area without relying on unsecured debt while maintaining the ability set aside 10% of your income a year.

For some people that will be 100K a year. For others that could be 35K a year. It all comes down to where you live.

 

[s0me0nesmind1]

The Roth IRA qualification is modified AGI based, so if you max your pre-tax options and take advantage of that new $24k standard deduction (if married & filing jointly), you can earn a decent bit above $200k annually yet still contribute to the Roth without any back door methods... and then keep contributing through back-door methods when you hit the measly $11k/yr cap (again, assuming married couples).

The standard deduction does not count towards your AGI. So you will need to bring down your taxable income with things like 401k and pre-tax medical insurance, etc...

 

[Tweak155]

The standard deduction does not count towards your AGI. So you will need to bring down your taxable income with things like 401k and pre-tax medical insurance, etc...

Yeah I mixed that up, but maxing 2x401k and an HSA alone is over $40k in reductions. Either way you can earn more than $200k and still contribute.

 

[purbeast0]

Yeah I mixed that up, but maxing 2x401k and an HSA alone is over $40k in reductions. Either way you can earn more than $200k and still contribute.

Oh gotcha, wasn't even thinking along those lines. Duh.

 

[Exterous]

Do any of those numbers include company matches?

Nope - mostly because those are so varied from 0-10%

Wonder how much that changes things.
For example, my wife and I have around 200k annual, we do 5% (max employee contribution) and a 10% company match.

10% additional matters a lot. With 5% of $200k ($10,000/yr) you'd get to* $1,258,000 after 35 years which leads to a 4% SWR of $50,000 annually. Your 10% company match ($20,000/yr) would get to $2,516,000 for an additional $100,640 annually.

Doing that for 25 years instead of 35 would likely result in ~$1.87M or $75,000 annually at a 4% SWR

*assuming the historical trend continues

 

[ultimatebob]

This thread took an unexpected turn

Yeah, it shows how much the members of ATOT have aged. When we were all in our 20's, it was all "fuck it, go buy yourself a G35 for street cred" when money discussions came up.

Nowadays, retirement discussions are serious business now!

Edit: I never had one of those G35's. I had a pretty cool Audi A4 3.0 Quattro, though

 

[Kaido]

Yeah, it shows how much the members of ATOT have aged. When we were all in our 20's, it was all "fuck it, go buy yourself a G35 for street cred" when money discussions came up.

Nowadays, retirement discussions are serious business now!