Author Topic: Bloomberg: Millennials Dreaming of Retiring at 30 Have a Math Problem  (Read 18075 times)

anonymouscow

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Re: Bloomberg: Millennials Dreaming of Retiring at 30 Have a Math Problem
« Reply #100 on: September 11, 2018, 08:07:21 AM »
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Mizz, under what circumstances does a person making $33k/year pay over $5k in taxes?  I think you've miscalculated.

By my math, $33,246 in taxable income would at bare minimum get the $12k standard deduction and then pay $2700 in the 10% and the 15% bracket, assuming a worst case scenarios (single filer, no kids, no credits, etc).  You're math is off by approximately a factor of 2.

In reality, this person could easily get their tax burden to zero by increasing their savings rate in their 401k, which is conveniently how you get to retire early anyway.  It just so happens to work out that the problems you see magically disappear when you follow the advice of this forum.

I did forget the standard deduction, but I counted back in the FICA taxes, because those still count as income too. So yeah, you are right it's closer to $24k being taxable on both state and federal. So it's about $3.7k in taxes instead of the $5.5k I estimated. So, sorry $29.5k it still doesn't really change my math. Perhaps they can save an extra $100/month under the new estimate, which essentially drops the needed CAGR over the 9 years by less than 0.5%.

So you think you could squeeze it to work in 9 years? Like I said if they max out their 401k that's $18.5k/yr. They'd still pay approximately $1.8k/yr in federal and state taxes and another $3.4k/yr in FICA. So they are up at $5.2k. So that leaves them with $21.3k/yr in spending. Let's say of that they are really good with money and can save another 3k/yr. Bringing their total savings to $21.5k/yr. You'd need a 17.5% CAGR and again need to be able to make that income consistently from 20-29. So again, show me how it's "FIRE in your 20s no sweat"

How would someone max out their 401k when they only make 33k...?

I make under 30k ($29,640), $5,328 goes to SS, Medicare, Federal, State, City taxes, $24,312 left. $1,006 for health insurance, $23,306 left. $1,480 gas to and from work and car insurance, $21,826 left. $1,819 a month left for housing, home repairs, car repairs, utilities, food.

This year I purchased a used vehicle for $4,400, spent $3,000 on car repairs, $2,500 in medical bills, that leaves $11,926 for housing, home repairs, utilities, food.

I am pretty much saving $0.00, this is without eating out, not buying anything that's not needed, buying everything I can used or on sale. I spent 30 dollars for a pair of shoes this year, my SO bought me socks and underwear for my birthday, that's the extent of my clothing purchases. I fill up 4 - 5 gallon gas cans when I have fuel points at Kroger.

There was a time my expenses were less, I had a paid off house in a "LCOL" area, had a roommate, was single. I'm not saying it's impossible to save thousands a year only making 30k a year, but my situation has changed and right now I have more expenses than I used to. I might be able to save a few thousand, but it's laughable to suggest I can save 18.5K a year.

Bucksandreds

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Re: Bloomberg: Millennials Dreaming of Retiring at 30 Have a Math Problem
« Reply #101 on: September 11, 2018, 08:12:21 AM »
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Mizz, under what circumstances does a person making $33k/year pay over $5k in taxes?  I think you've miscalculated.

By my math, $33,246 in taxable income would at bare minimum get the $12k standard deduction and then pay $2700 in the 10% and the 15% bracket, assuming a worst case scenarios (single filer, no kids, no credits, etc).  You're math is off by approximately a factor of 2.

In reality, this person could easily get their tax burden to zero by increasing their savings rate in their 401k, which is conveniently how you get to retire early anyway.  It just so happens to work out that the problems you see magically disappear when you follow the advice of this forum.

I did forget the standard deduction, but I counted back in the FICA taxes, because those still count as income too. So yeah, you are right it's closer to $24k being taxable on both state and federal. So it's about $3.7k in taxes instead of the $5.5k I estimated. So, sorry $29.5k it still doesn't really change my math. Perhaps they can save an extra $100/month under the new estimate, which essentially drops the needed CAGR over the 9 years by less than 0.5%.

So you think you could squeeze it to work in 9 years? Like I said if they max out their 401k that's $18.5k/yr. They'd still pay approximately $1.8k/yr in federal and state taxes and another $3.4k/yr in FICA. So they are up at $5.2k. So that leaves them with $21.3k/yr in spending. Let's say of that they are really good with money and can save another 3k/yr. Bringing their total savings to $21.5k/yr. You'd need a 17.5% CAGR and again need to be able to make that income consistently from 20-29. So again, show me how it's "FIRE in your 20s no sweat"

How would someone max out their 401k when they only make 33k...?

I make under 30k ($29,640), $5,328 goes to SS, Medicare, Federal, State, City taxes, $24,312 left. $1,006 for health insurance, $23,306 left. $1,480 gas to and from work and car insurance, $21,826 left. $1,819 a month left for housing, home repairs, car repairs, utilities, food.

This year I purchased a used vehicle for $4,400, spent $3,000 on car repairs, $2,500 in medical bills, that leaves $11,926 for housing, home repairs, utilities, food.

I am pretty much saving $0.00, this is without eating out, not buying anything that's not needed, buying everything I can used or on sale. I spent 30 dollars for a pair of shoes this year, my SO bought me socks and underwear for my birthday, that's the extent of my clothing purchases. I fill up 4 - 5 gallon gas cans when I have fuel points at Kroger.

There was a time my expenses were less, I had a paid off house in a "LCOL" area, had a roommate, was single. I'm not saying it's impossible to save thousands a year only making 30k a year, but my situation has changed and right now I have more expenses than I used to. I might be able to save a few thousand, but it's laughable to suggest I can save 18.5K a year.

This is just a question and not a suggestion but would saving in a 401k and thus lowering MAGI qualify you for lower cost or free health insurance through the ACA or Medicaid?

mizzourah2006

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Re: Bloomberg: Millennials Dreaming of Retiring at 30 Have a Math Problem
« Reply #102 on: September 11, 2018, 08:24:22 AM »
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Mizz, under what circumstances does a person making $33k/year pay over $5k in taxes?  I think you've miscalculated.

By my math, $33,246 in taxable income would at bare minimum get the $12k standard deduction and then pay $2700 in the 10% and the 15% bracket, assuming a worst case scenarios (single filer, no kids, no credits, etc).  You're math is off by approximately a factor of 2.

In reality, this person could easily get their tax burden to zero by increasing their savings rate in their 401k, which is conveniently how you get to retire early anyway.  It just so happens to work out that the problems you see magically disappear when you follow the advice of this forum.

I did forget the standard deduction, but I counted back in the FICA taxes, because those still count as income too. So yeah, you are right it's closer to $24k being taxable on both state and federal. So it's about $3.7k in taxes instead of the $5.5k I estimated. So, sorry $29.5k it still doesn't really change my math. Perhaps they can save an extra $100/month under the new estimate, which essentially drops the needed CAGR over the 9 years by less than 0.5%.

So you think you could squeeze it to work in 9 years? Like I said if they max out their 401k that's $18.5k/yr. They'd still pay approximately $1.8k/yr in federal and state taxes and another $3.4k/yr in FICA. So they are up at $5.2k. So that leaves them with $21.3k/yr in spending. Let's say of that they are really good with money and can save another 3k/yr. Bringing their total savings to $21.5k/yr. You'd need a 17.5% CAGR and again need to be able to make that income consistently from 20-29. So again, show me how it's "FIRE in your 20s no sweat"

How would someone max out their 401k when they only make 33k...?

I make under 30k ($29,640), $5,328 goes to SS, Medicare, Federal, State, City taxes, $24,312 left. $1,006 for health insurance, $23,306 left. $1,480 gas to and from work and car insurance, $21,826 left. $1,819 a month left for housing, home repairs, car repairs, utilities, food.

This year I purchased a used vehicle for $4,400, spent $3,000 on car repairs, $2,500 in medical bills, that leaves $11,926 for housing, home repairs, utilities, food.

I am pretty much saving $0.00, this is without eating out, not buying anything that's not needed, buying everything I can used or on sale. I spent 30 dollars for a pair of shoes this year, my SO bought me socks and underwear for my birthday, that's the extent of my clothing purchases. I fill up 4 - 5 gallon gas cans when I have fuel points at Kroger.

There was a time my expenses were less, I had a paid off house in a "LCOL" area, had a roommate, was single. I'm not saying it's impossible to save thousands a year only making 30k a year, but my situation has changed and right now I have more expenses than I used to. I might be able to save a few thousand, but it's laughable to suggest I can save 18.5K a year.

That was kind of two examples intermingled. The first example was someone making $45k/yr and saving 20% in their 401k (leaving them with $33k after FICA and 401k deductions) and then it switched to maxing your 401k to lower taxes as much as possible. But, yes I agree it would be difficult for a single person earning even $45k/yr to max out their 401k as that would likely leave them with about $20k for spending for the year. Not impossible, but definitely not easy.

Dabnasty

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Re: Bloomberg: Millennials Dreaming of Retiring at 30 Have a Math Problem
« Reply #103 on: September 11, 2018, 08:41:16 AM »
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Mizz, under what circumstances does a person making $33k/year pay over $5k in taxes?  I think you've miscalculated.

By my math, $33,246 in taxable income would at bare minimum get the $12k standard deduction and then pay $2700 in the 10% and the 15% bracket, assuming a worst case scenarios (single filer, no kids, no credits, etc).  You're math is off by approximately a factor of 2.

In reality, this person could easily get their tax burden to zero by increasing their savings rate in their 401k, which is conveniently how you get to retire early anyway.  It just so happens to work out that the problems you see magically disappear when you follow the advice of this forum.

I did forget the standard deduction, but I counted back in the FICA taxes, because those still count as income too. So yeah, you are right it's closer to $24k being taxable on both state and federal. So it's about $3.7k in taxes instead of the $5.5k I estimated. So, sorry $29.5k it still doesn't really change my math. Perhaps they can save an extra $100/month under the new estimate, which essentially drops the needed CAGR over the 9 years by less than 0.5%.

So you think you could squeeze it to work in 9 years? Like I said if they max out their 401k that's $18.5k/yr. They'd still pay approximately $1.8k/yr in federal and state taxes and another $3.4k/yr in FICA. So they are up at $5.2k. So that leaves them with $21.3k/yr in spending. Let's say of that they are really good with money and can save another 3k/yr. Bringing their total savings to $21.5k/yr. You'd need a 17.5% CAGR and again need to be able to make that income consistently from 20-29. So again, show me how it's "FIRE in your 20s no sweat"

How would someone max out their 401k when they only make 33k...?

I make under 30k ($29,640), $5,328 goes to SS, Medicare, Federal, State, City taxes, $24,312 left. $1,006 for health insurance, $23,306 left. $1,480 gas to and from work and car insurance, $21,826 left. $1,819 a month left for housing, home repairs, car repairs, utilities, food.

This year I purchased a used vehicle for $4,400, spent $3,000 on car repairs, $2,500 in medical bills, that leaves $11,926 for housing, home repairs, utilities, food.

I am pretty much saving $0.00, this is without eating out, not buying anything that's not needed, buying everything I can used or on sale. I spent 30 dollars for a pair of shoes this year, my SO bought me socks and underwear for my birthday, that's the extent of my clothing purchases. I fill up 4 - 5 gallon gas cans when I have fuel points at Kroger.

There was a time my expenses were less, I had a paid off house in a "LCOL" area, had a roommate, was single. I'm not saying it's impossible to save thousands a year only making 30k a year, but my situation has changed and right now I have more expenses than I used to. I might be able to save a few thousand, but it's laughable to suggest I can save 18.5K a year.

When you add in the car purchase/repairs and medical bills, it doesn't sound like this was a good year to be saving much. On the other hand, remember that if you did max a 401k your tax liability would be <$2300, a savings of $3,000 based on your above number. You would pay zero state and federal taxes. And assuming those one time expenses aren't matched next year, you could be on track to save $9,900+tax savings+401k match (this is assuming you have a 401k option which wasn't clear, but there's always IRA).

I'm certainly not criticizing your spending because it looks like you're doing pretty well, but the idea of maxing a 401k at $30,000 income is not laughable. As has been mentioned, Jacob of ERE lived on $7,000 annual expenses. He didn't have free housing or any other special circumstance, he made it happen.


sol

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Re: Bloomberg: Millennials Dreaming of Retiring at 30 Have a Math Problem
« Reply #104 on: September 11, 2018, 09:01:09 AM »
How would someone max out their 401k when they only make 33k...?

Lol, you must be new here.  This forum is literally dedicated to showing people like you how to do this.  Have you been reading along?

Quote
I make under 30k
...
I am pretty much saving $0.00

Then you are spending too much, if your goal is an early retirement.  A person who saves zero dollars per year can never retire.  That's the path you're currently on.

Just as a first helpful suggestion, you're probably not going to buy a new car every year, right?  So the $4k you spent on one this year can go 100% to savings next year, and that 4k out of your 23k of take home pay would put you at a 17% savings rage, on track to retire after 32 years of working according to the Simple Math spreadsheet.  Which sounds about right to me. 

If you want to retire earlier than that, you need to save more.  Get another roommate, for example, or move closer to a higher paying job.  It doesn't make sense for you to say that the simple math doesn't work when you use numbers that work just fine, but give you an answer you don't like. 

For the record, I saved more than $4k/year when I was a graduate student making less than $30k, and I'm sure you could too.

Quote
There was a time my expenses were less

Awesome!  So you already know how it can be done.  Why have you inflated your spending so much?  You know that you are sacrificing your retirement, right?

Quote

my situation has changed and right now I have more expenses than I used to.

That's probably your decision.  And it's a fine one, if you have decided that working longer in order to spend more today is a good trade off for you, but don't pretend it's the only choice you have.

Dabnasty

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Re: Bloomberg: Millennials Dreaming of Retiring at 30 Have a Math Problem
« Reply #105 on: September 11, 2018, 09:04:20 AM »
- $27,878.10 remaining

Mizz, under what circumstances does a person making $33k/year pay over $5k in taxes?  I think you've miscalculated.

By my math, $33,246 in taxable income would at bare minimum get the $12k standard deduction and then pay $2700 in the 10% and the 15% bracket, assuming a worst case scenarios (single filer, no kids, no credits, etc).  You're math is off by approximately a factor of 2.

In reality, this person could easily get their tax burden to zero by increasing their savings rate in their 401k, which is conveniently how you get to retire early anyway.  It just so happens to work out that the problems you see magically disappear when you follow the advice of this forum.

I did forget the standard deduction, but I counted back in the FICA taxes, because those still count as income too. So yeah, you are right it's closer to $24k being taxable on both state and federal. So it's about $3.7k in taxes instead of the $5.5k I estimated. So, sorry $29.5k it still doesn't really change my math. Perhaps they can save an extra $100/month under the new estimate, which essentially drops the needed CAGR over the 9 years by less than 0.5%.

So you think you could squeeze it to work in 9 years? Like I said if they max out their 401k that's $18.5k/yr. They'd still pay approximately $1.8k/yr in federal and state taxes and another $3.4k/yr in FICA. So they are up at $5.2k. So that leaves them with $21.3k/yr in spending. Let's say of that they are really good with money and can save another 3k/yr. Bringing their total savings to $21.5k/yr. You'd need a 17.5% CAGR and again need to be able to make that income consistently from 20-29. So again, show me how it's "FIRE in your 20s no sweat"

How would someone max out their 401k when they only make 33k...?

I make under 30k ($29,640), $5,328 goes to SS, Medicare, Federal, State, City taxes, $24,312 left. $1,006 for health insurance, $23,306 left. $1,480 gas to and from work and car insurance, $21,826 left. $1,819 a month left for housing, home repairs, car repairs, utilities, food.

This year I purchased a used vehicle for $4,400, spent $3,000 on car repairs, $2,500 in medical bills, that leaves $11,926 for housing, home repairs, utilities, food.

I am pretty much saving $0.00, this is without eating out, not buying anything that's not needed, buying everything I can used or on sale. I spent 30 dollars for a pair of shoes this year, my SO bought me socks and underwear for my birthday, that's the extent of my clothing purchases. I fill up 4 - 5 gallon gas cans when I have fuel points at Kroger.

There was a time my expenses were less, I had a paid off house in a "LCOL" area, had a roommate, was single. I'm not saying it's impossible to save thousands a year only making 30k a year, but my situation has changed and right now I have more expenses than I used to. I might be able to save a few thousand, but it's laughable to suggest I can save 18.5K a year.

That was kind of two examples intermingled. The first example was someone making $45k/yr and saving 20% in their 401k (leaving them with $33k after FICA and 401k deductions) and then it switched to maxing your 401k to lower taxes as much as possible. But, yes I agree it would be difficult for a single person earning even $45k/yr to max out their 401k as that would likely leave them with about $20k for spending for the year. Not impossible, but definitely not easy.

This isn't my actual salary, but if I made $45k (and health insurance was covered) I could max my 401k and save an additional $6.5k or so based on current spending. I guess it depends on what you consider "easy" but I don't feel deprived. I don't take much vacation but that's more a lack of time off than not wanting to pay for it. I have free airline miles just sitting around and can't find a way to use them since we spend all of our PTO visiting family within driving distance.

In addition I would gladly save ~$1,000 on eating out if I didn't have to compromise with the SO, and I'm currently paying the full grocery, electric and gas bill. If these were split evenly, that's another $1500 savings. Then add in the $500 I spend on booze and I could save another $3,000 without too much sacrifice.

That puts it at $28k savings from a $45k salary. Of course, things come up. Sometimes things outside of my control, but I think these numbers leave quite a bit of room for error. And again, others spend less than I do.
« Last Edit: September 11, 2018, 09:06:57 AM by Dabnasty »

Paul der Krake

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Re: Bloomberg: Millennials Dreaming of Retiring at 30 Have a Math Problem
« Reply #106 on: September 11, 2018, 09:09:23 AM »
Take your AGI low enough with 401(k)/IRA contributions and you can get an extra $1,000 using the savers credit. It's difficult in the sense that it requires toeing the line where you have nothing left over to cover unexpected expenses. On the other hand, it's a free $1,000 to show off you cashflow skills.


spartana

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Re: Bloomberg: Millennials Dreaming of Retiring at 30 Have a Math Problem
« Reply #107 on: September 11, 2018, 09:24:00 AM »
PTF. Was a lower income person who became FI at 38, divorced, and then became FI and RE at 42. My max take home after maxing 457 and taxes was $3000/month at my highest year of income. Approx $1000 went to mortgage (bought house cheap with big down payment during a housing downturn), $1000 went to all expenses, and $1000 went to taxable savings/investments or tIRA. Got 2 roommates to help pay off mortgage earlier so that I could retire debt free eventually.

ETA the above isvasva single person. When I was married to a frugal guy stashing was much easier and joint income about double.
« Last Edit: September 11, 2018, 09:44:48 AM by spartana »

mizzourah2006

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Re: Bloomberg: Millennials Dreaming of Retiring at 30 Have a Math Problem
« Reply #108 on: September 11, 2018, 09:29:36 AM »
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Mizz, under what circumstances does a person making $33k/year pay over $5k in taxes?  I think you've miscalculated.

By my math, $33,246 in taxable income would at bare minimum get the $12k standard deduction and then pay $2700 in the 10% and the 15% bracket, assuming a worst case scenarios (single filer, no kids, no credits, etc).  You're math is off by approximately a factor of 2.

In reality, this person could easily get their tax burden to zero by increasing their savings rate in their 401k, which is conveniently how you get to retire early anyway.  It just so happens to work out that the problems you see magically disappear when you follow the advice of this forum.

I did forget the standard deduction, but I counted back in the FICA taxes, because those still count as income too. So yeah, you are right it's closer to $24k being taxable on both state and federal. So it's about $3.7k in taxes instead of the $5.5k I estimated. So, sorry $29.5k it still doesn't really change my math. Perhaps they can save an extra $100/month under the new estimate, which essentially drops the needed CAGR over the 9 years by less than 0.5%.

So you think you could squeeze it to work in 9 years? Like I said if they max out their 401k that's $18.5k/yr. They'd still pay approximately $1.8k/yr in federal and state taxes and another $3.4k/yr in FICA. So they are up at $5.2k. So that leaves them with $21.3k/yr in spending. Let's say of that they are really good with money and can save another 3k/yr. Bringing their total savings to $21.5k/yr. You'd need a 17.5% CAGR and again need to be able to make that income consistently from 20-29. So again, show me how it's "FIRE in your 20s no sweat"

How would someone max out their 401k when they only make 33k...?

I make under 30k ($29,640), $5,328 goes to SS, Medicare, Federal, State, City taxes, $24,312 left. $1,006 for health insurance, $23,306 left. $1,480 gas to and from work and car insurance, $21,826 left. $1,819 a month left for housing, home repairs, car repairs, utilities, food.

This year I purchased a used vehicle for $4,400, spent $3,000 on car repairs, $2,500 in medical bills, that leaves $11,926 for housing, home repairs, utilities, food.

I am pretty much saving $0.00, this is without eating out, not buying anything that's not needed, buying everything I can used or on sale. I spent 30 dollars for a pair of shoes this year, my SO bought me socks and underwear for my birthday, that's the extent of my clothing purchases. I fill up 4 - 5 gallon gas cans when I have fuel points at Kroger.

There was a time my expenses were less, I had a paid off house in a "LCOL" area, had a roommate, was single. I'm not saying it's impossible to save thousands a year only making 30k a year, but my situation has changed and right now I have more expenses than I used to. I might be able to save a few thousand, but it's laughable to suggest I can save 18.5K a year.

That was kind of two examples intermingled. The first example was someone making $45k/yr and saving 20% in their 401k (leaving them with $33k after FICA and 401k deductions) and then it switched to maxing your 401k to lower taxes as much as possible. But, yes I agree it would be difficult for a single person earning even $45k/yr to max out their 401k as that would likely leave them with about $20k for spending for the year. Not impossible, but definitely not easy.

This isn't my actual salary, but if I made $45k (and health insurance was covered) I could max my 401k and save an additional $6.5k or so based on current spending. I guess it depends on what you consider "easy" but I don't feel deprived. I don't take much vacation but that's more a lack of time off than not wanting to pay for it. I have free airline miles just sitting around and can't find a way to use them since we spend all of our PTO visiting family within driving distance.

In addition I would gladly save ~$1,000 on eating out if I didn't have to compromise with the SO, and I'm currently paying the full grocery, electric and gas bill. If these were split evenly, that's another $1500 savings. Then add in the $500 I spend on booze and I could save another $3,000 without too much sacrifice.

That puts it at $28k savings from a $45k salary. Of course, things come up. Sometimes things outside of my control, but I think these numbers leave quite a bit of room for error. And again, others spend less than I do.

Yeah, it's a lot easier if you essentially treat your SO as your roommate when figuring expenses. In that case before we had kids I lived off of about $22k/yr. Hell if you back out kids expenses now and divide by 2 I live off of less than $20k/yr right now. But, we also have two paid off cars, saved enough for a down payment on a home that put our 4 bedroom home with PITI at $1050/month, etc. There was a time when I was living off of $10k/yr during grad school and she was paying for a bit more stuff than me because she was making $30k/yr. Like you said, I was fine. There was also a time where I had 3 roommates in a 2 bedroom, which was fine for the short term, but when we got married I don't think my wife would have been cool with a roommate. Obviously, just about anything is possible if you are willing to sacrifice enough, I get that. But is that really the FIRE we want to show the world. Look you can live off of $7k/yr and retire after working for 5 years! You can probably work at Walmart for 5 years and become FIRE if you are willing to live in a tent or a van for the rest of your life too.


The example I had responded to was very specific to a 20 year old retiring by 29. My guess is you have a paid for car that's in relatively good shape, you are relatively healthy, plus you likely have cash in the case of an emergency. If we gave this 20 year old a paid for 2008 honda civic, and $20k in cash reserves, sure he/she could live off of $15-18k/yr, probably even renting their own 1 bedroom apartment in the midwest. I was working under the assumption that the 20 year old in question was starting out from zero and wanted to retire by 29.
« Last Edit: September 11, 2018, 09:32:21 AM by mizzourah2006 »

anonymouscow

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Re: Bloomberg: Millennials Dreaming of Retiring at 30 Have a Math Problem
« Reply #109 on: September 11, 2018, 09:51:47 AM »
- $27,878.10 remaining

Mizz, under what circumstances does a person making $33k/year pay over $5k in taxes?  I think you've miscalculated.

By my math, $33,246 in taxable income would at bare minimum get the $12k standard deduction and then pay $2700 in the 10% and the 15% bracket, assuming a worst case scenarios (single filer, no kids, no credits, etc).  You're math is off by approximately a factor of 2.

In reality, this person could easily get their tax burden to zero by increasing their savings rate in their 401k, which is conveniently how you get to retire early anyway.  It just so happens to work out that the problems you see magically disappear when you follow the advice of this forum.

I did forget the standard deduction, but I counted back in the FICA taxes, because those still count as income too. So yeah, you are right it's closer to $24k being taxable on both state and federal. So it's about $3.7k in taxes instead of the $5.5k I estimated. So, sorry $29.5k it still doesn't really change my math. Perhaps they can save an extra $100/month under the new estimate, which essentially drops the needed CAGR over the 9 years by less than 0.5%.

So you think you could squeeze it to work in 9 years? Like I said if they max out their 401k that's $18.5k/yr. They'd still pay approximately $1.8k/yr in federal and state taxes and another $3.4k/yr in FICA. So they are up at $5.2k. So that leaves them with $21.3k/yr in spending. Let's say of that they are really good with money and can save another 3k/yr. Bringing their total savings to $21.5k/yr. You'd need a 17.5% CAGR and again need to be able to make that income consistently from 20-29. So again, show me how it's "FIRE in your 20s no sweat"

How would someone max out their 401k when they only make 33k...?

I make under 30k ($29,640), $5,328 goes to SS, Medicare, Federal, State, City taxes, $24,312 left. $1,006 for health insurance, $23,306 left. $1,480 gas to and from work and car insurance, $21,826 left. $1,819 a month left for housing, home repairs, car repairs, utilities, food.

This year I purchased a used vehicle for $4,400, spent $3,000 on car repairs, $2,500 in medical bills, that leaves $11,926 for housing, home repairs, utilities, food.

I am pretty much saving $0.00, this is without eating out, not buying anything that's not needed, buying everything I can used or on sale. I spent 30 dollars for a pair of shoes this year, my SO bought me socks and underwear for my birthday, that's the extent of my clothing purchases. I fill up 4 - 5 gallon gas cans when I have fuel points at Kroger.

There was a time my expenses were less, I had a paid off house in a "LCOL" area, had a roommate, was single. I'm not saying it's impossible to save thousands a year only making 30k a year, but my situation has changed and right now I have more expenses than I used to. I might be able to save a few thousand, but it's laughable to suggest I can save 18.5K a year.

This is just a question and not a suggestion but would saving in a 401k and thus lowering MAGI qualify you for lower cost or free health insurance through the ACA or Medicaid?

I know a few people have replied to my post.

I have insurance through work, so putting money into a 401K would not lower my health insurance costs.

But yes, putting money into a 401k would lower my taxes in general, I would probably also qualify for the retirement savers credit.

My point more was trying to show that I don't have the means to put large amounts into a 401k to begin with. Everyday things start to add up real quick.

I know the vehicle purchase, repairs, and medical bills will probably not occur ever year. The first 8 months of the year I have spent $15,474.88 and made $15,528. I still need to pay the $2,500 in medical bills. Theoretically, I could have saved $7,400 so far this year if it wasn't for vehicle purchase and repairs, and then my taxes would have been lower.

$7,400 and the tax savings is still not close to maxing out a 401k.

I also have not been giving my SO any money for the mortgage, which I would be doing if my expenses were not so high. If it wasn't car or medical bills I would probably be spending it on home repairs (I have a list of dozens of things that need done), or car repairs that should be done. My radiator mount rusted out and now the radiator is held in by a piece of wood and some tie down straps, the turn signals are wired up with random lights from another car, etc.

The only way I could max out a 401k would be to only spend money on the mortgage, utilities, car insurance, and gas to and from work. No money left for food, car / home repairs / maintenance, gas going places other than work, etc. That is just not realistic at all.

Dabnasty

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Re: Bloomberg: Millennials Dreaming of Retiring at 30 Have a Math Problem
« Reply #110 on: September 11, 2018, 10:09:51 AM »
I know a few people have replied to my post.

I have insurance through work, so putting money into a 401K would not lower my health insurance costs.

But yes, putting money into a 401k would lower my taxes in general, I would probably also qualify for the retirement savers credit.

My point more was trying to show that I don't have the means to put large amounts into a 401k to begin with. Everyday things start to add up real quick.

I know the vehicle purchase, repairs, and medical bills will probably not occur ever year. The first 8 months of the year I have spent $15,474.88 and made $15,528. I still need to pay the $2,500 in medical bills. Theoretically, I could have saved $7,400 so far this year if it wasn't for vehicle purchase and repairs, and then my taxes would have been lower.

$7,400 and the tax savings is still not close to maxing out a 401k.

I also have not been giving my SO any money for the mortgage, which I would be doing if my expenses were not so high. If it wasn't car or medical bills I would probably be spending it on home repairs (I have a list of dozens of things that need done), or car repairs that should be done. My radiator mount rusted out and now the radiator is held in by a piece of wood and some tie down straps, the turn signals are wired up with random lights from another car, etc.

The only way I could max out a 401k would be to only spend money on the mortgage, utilities, car insurance, and gas to and from work. No money left for food, car / home repairs / maintenance, gas going places other than work, etc. That is just not realistic at all.

Unless there is some truly unavoidable spending that we're not seeing here, I have good news. You're wrong! Hooray!

Because there is room to reduce your spending and probably not in the painful ways you're imagining. Based on the bits and pieces you've given us I can make some assumptions but I can't actually offer any advice without more specifics. Plus this isn't the right thread for that.

I would highly recommend posting your situation with more details in the case study section of the forum, that is, if you're interested in retiring someday :)

EnjoyIt

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Re: Bloomberg: Millennials Dreaming of Retiring at 30 Have a Math Problem
« Reply #111 on: September 11, 2018, 10:14:28 AM »
- $27,878.10 remaining

Mizz, under what circumstances does a person making $33k/year pay over $5k in taxes?  I think you've miscalculated.

By my math, $33,246 in taxable income would at bare minimum get the $12k standard deduction and then pay $2700 in the 10% and the 15% bracket, assuming a worst case scenarios (single filer, no kids, no credits, etc).  You're math is off by approximately a factor of 2.

In reality, this person could easily get their tax burden to zero by increasing their savings rate in their 401k, which is conveniently how you get to retire early anyway.  It just so happens to work out that the problems you see magically disappear when you follow the advice of this forum.

I did forget the standard deduction, but I counted back in the FICA taxes, because those still count as income too. So yeah, you are right it's closer to $24k being taxable on both state and federal. So it's about $3.7k in taxes instead of the $5.5k I estimated. So, sorry $29.5k it still doesn't really change my math. Perhaps they can save an extra $100/month under the new estimate, which essentially drops the needed CAGR over the 9 years by less than 0.5%.

So you think you could squeeze it to work in 9 years? Like I said if they max out their 401k that's $18.5k/yr. They'd still pay approximately $1.8k/yr in federal and state taxes and another $3.4k/yr in FICA. So they are up at $5.2k. So that leaves them with $21.3k/yr in spending. Let's say of that they are really good with money and can save another 3k/yr. Bringing their total savings to $21.5k/yr. You'd need a 17.5% CAGR and again need to be able to make that income consistently from 20-29. So again, show me how it's "FIRE in your 20s no sweat"

How would someone max out their 401k when they only make 33k...?

I make under 30k ($29,640), $5,328 goes to SS, Medicare, Federal, State, City taxes, $24,312 left. $1,006 for health insurance, $23,306 left. $1,480 gas to and from work and car insurance, $21,826 left. $1,819 a month left for housing, home repairs, car repairs, utilities, food.

This year I purchased a used vehicle for $4,400, spent $3,000 on car repairs, $2,500 in medical bills, that leaves $11,926 for housing, home repairs, utilities, food.

I am pretty much saving $0.00, this is without eating out, not buying anything that's not needed, buying everything I can used or on sale. I spent 30 dollars for a pair of shoes this year, my SO bought me socks and underwear for my birthday, that's the extent of my clothing purchases. I fill up 4 - 5 gallon gas cans when I have fuel points at Kroger.

There was a time my expenses were less, I had a paid off house in a "LCOL" area, had a roommate, was single. I'm not saying it's impossible to save thousands a year only making 30k a year, but my situation has changed and right now I have more expenses than I used to. I might be able to save a few thousand, but it's laughable to suggest I can save 18.5K a year.

This is just a question and not a suggestion but would saving in a 401k and thus lowering MAGI qualify you for lower cost or free health insurance through the ACA or Medicaid?

I know a few people have replied to my post.

I have insurance through work, so putting money into a 401K would not lower my health insurance costs.

But yes, putting money into a 401k would lower my taxes in general, I would probably also qualify for the retirement savers credit.

My point more was trying to show that I don't have the means to put large amounts into a 401k to begin with. Everyday things start to add up real quick.

I know the vehicle purchase, repairs, and medical bills will probably not occur ever year. The first 8 months of the year I have spent $15,474.88 and made $15,528. I still need to pay the $2,500 in medical bills. Theoretically, I could have saved $7,400 so far this year if it wasn't for vehicle purchase and repairs, and then my taxes would have been lower.

$7,400 and the tax savings is still not close to maxing out a 401k.

I also have not been giving my SO any money for the mortgage, which I would be doing if my expenses were not so high. If it wasn't car or medical bills I would probably be spending it on home repairs (I have a list of dozens of things that need done), or car repairs that should be done. My radiator mount rusted out and now the radiator is held in by a piece of wood and some tie down straps, the turn signals are wired up with random lights from another car, etc.

The only way I could max out a 401k would be to only spend money on the mortgage, utilities, car insurance, and gas to and from work. No money left for food, car / home repairs / maintenance, gas going places other than work, etc. That is just not realistic at all.

Sounds like money is pretty tight for you.  Why not do a case study and post your budget/spending in a separate thread and let some of the cost cutting gurus help you.  I have seen people on this forum provide amazing advice once they know all the details.

SachaFiscal

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Re: Bloomberg: Millennials Dreaming of Retiring at 30 Have a Math Problem
« Reply #112 on: September 11, 2018, 10:28:12 AM »
I always feel those who target retirement at 30 should maybe consider that while a 20something job may feel less empowered, in your 30s and 40s your enhanced skills can allow for some pretty fun, cool and empowered difference making at work.

It is great to be FI by 30 (I was), but assuming one quits the work force is limiting.  How about using the FI to target only a job one loves, or taking more risks at work due to the confidence it brings.  For me I got a lot out of my job and hit burn out more at 50.  The habits of saving are great, but life goals change with maturity, kids, etc.

Articles like this tend to treat life plans as static.  What is interesting is that the habits of saving and investment compounding can create financial independence for any generation.

I have to say I'm glad I stuck it out in my career and worked through my 30s. They were probably the most rewarding years of my career (although also the most taxing and difficult).  That said, I'm really glad I had the savings to quit (at least for a while) in my 40s. I think if you get to retire anytime before you die, you are lucky.

anonymouscow

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Re: Bloomberg: Millennials Dreaming of Retiring at 30 Have a Math Problem
« Reply #113 on: September 11, 2018, 10:45:52 AM »
I know a few people have replied to my post.

I have insurance through work, so putting money into a 401K would not lower my health insurance costs.

But yes, putting money into a 401k would lower my taxes in general, I would probably also qualify for the retirement savers credit.

My point more was trying to show that I don't have the means to put large amounts into a 401k to begin with. Everyday things start to add up real quick.

I know the vehicle purchase, repairs, and medical bills will probably not occur ever year. The first 8 months of the year I have spent $15,474.88 and made $15,528. I still need to pay the $2,500 in medical bills. Theoretically, I could have saved $7,400 so far this year if it wasn't for vehicle purchase and repairs, and then my taxes would have been lower.

$7,400 and the tax savings is still not close to maxing out a 401k.

I also have not been giving my SO any money for the mortgage, which I would be doing if my expenses were not so high. If it wasn't car or medical bills I would probably be spending it on home repairs (I have a list of dozens of things that need done), or car repairs that should be done. My radiator mount rusted out and now the radiator is held in by a piece of wood and some tie down straps, the turn signals are wired up with random lights from another car, etc.

The only way I could max out a 401k would be to only spend money on the mortgage, utilities, car insurance, and gas to and from work. No money left for food, car / home repairs / maintenance, gas going places other than work, etc. That is just not realistic at all.

Unless there is some truly unavoidable spending that we're not seeing here, I have good news. You're wrong! Hooray!

Because there is room to reduce your spending and probably not in the painful ways you're imagining. Based on the bits and pieces you've given us I can make some assumptions but I can't actually offer any advice without more specifics. Plus this isn't the right thread for that.

I would highly recommend posting your situation with more details in the case study section of the forum, that is, if you're interested in retiring someday :)

I can do that. I have all my spending tracked already.

GrumpyPenguin

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Re: Bloomberg: Millennials Dreaming of Retiring at 30 Have a Math Problem
« Reply #114 on: September 11, 2018, 11:53:07 AM »
FIRE is being drastically undersold.  With the median income in the U.S. as high as it is, the savings rate is absolutely pathetic.  A great many folks are clearly able to save a lot more and are choosing not to. 

30 is ambitious, but if the median household does everything they can, so what if they end up being able to FIRE at 40 instead of 30? Sure as hell beats the whole "70 is the new 65" crap I hear these days.

Goldielocks

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Re: Bloomberg: Millennials Dreaming of Retiring at 30 Have a Math Problem
« Reply #115 on: September 11, 2018, 11:54:02 AM »
How would someone max out their 401k when they only make 33k...?

I make under 30k ($29,640), $5,328 goes to SS, Medicare, Federal, State, City taxes, $24,312 left.

....it's laughable to suggest I can save 18.5K a year.
You make a good point, I agree.
 
I am sure your path to early retirement would need to look a lot different.  For one thing, how much will SS pay you at age 65/67?   If you have lower income now, would SS at retirement fully provide your needs after 65?

If yes, then the early retirement goal is to figure out how to reduce work (possibly to zero) starting sometime before you are 65.  That should not require another $18.5k a year in savings.

Some of the NYT article early retirees decided to temporarily move to a HCOLA, but keep shared rent low, to build up a stache for 5 years, to fund earlier retirement in a LCOLA.   $30k per year is close minimum wage in my area, assuming no overtime, so it would fairly easy to make more here, but very hard to figure out accommodation / requiring sharing house rent with others.

mizzourah2006

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Re: Bloomberg: Millennials Dreaming of Retiring at 30 Have a Math Problem
« Reply #116 on: September 11, 2018, 12:34:28 PM »
FIRE is being drastically undersold.  With the median income in the U.S. as high as it is, the savings rate is absolutely pathetic.  A great many folks are clearly able to save a lot more and are choosing not to. 

30 is ambitious, but if the median household does everything they can, so what if they end up being able to FIRE at 40 instead of 30? Sure as hell beats the whole "70 is the new 65" crap I hear these days.
.
I think that more likely what you'd see is most people being able to do it by 55-60, not 40. I think a lot of people forget there are often kids involved in these median HH incomes as well as student loans and car payments, medical bills, etc.

Like I said earlier, it's a lot easier for someone with $250k in investments, $20k in cash, a 30 year mortgage on a modest home, and a paid off vehicle to preach about how easy it is to live on $25k. Hell if I calculated it the way many on this forum do and split our yearly HH expenses in two with 2 kids in daycare I live on $30k/yr. But I also have the luxury of a high income that has allowed me to save up to put 20% down on my home and obtain a low interest rate, to pay cash for both of our family cars, and to pay off my student loans within a year of graduating from grad school. I could even easily get that down to $23-$24k if I needed to by cutting out travel, happy hours, beer and wine with friends and family, eating out, and cable. But again....I have the luxury of having been able to set myself up in a position where our only required payment monthly is our mortgage. Not everyone has enough cash flow to do that quickly.

Now could most people do better....absolutely, but to pretend it's a cake walk for the average household to call it quits after 15 years of work is a bit of an exaggeration IMO. However, I would agree most people should be able to be FI by 55-60 if they actually did a better job of saving and living more thoughtfully.


Goldielocks

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Re: Bloomberg: Millennials Dreaming of Retiring at 30 Have a Math Problem
« Reply #117 on: September 11, 2018, 12:59:43 PM »
.....
Now could most people do better....absolutely, but to pretend it's a cake walk for the average household to call it quits after 15 years of work is a bit of an exaggeration IMO.

Wherever did you get the idea that people are saying it is a cake walk for the average household (with kids) to call it quits after 15 years of work?   

One reason I hear people argue against FIRE being possible, is that they think that there is an implied criticism if they have not / aren't doing it.   There isn't.  Instead, it is just a wake up call to reflect on the choices that got you to where you are now, and support for a plan to move forward to make FIRE happen if you want it to.  If you wake up late (like me), you may not make FIRE before 40, but still do it within 7 to 15 years of where you are now.

Cranky

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Re: Bloomberg: Millennials Dreaming of Retiring at 30 Have a Math Problem
« Reply #118 on: September 11, 2018, 01:09:36 PM »
While I think that many people *can* stash away a substantial sum of money if they start early and are willing to accept a pretty low standard of living

"Low standard of living" is kind of a relative term, right?  Most human beings on planet Earth today have a lower standard of living than 98% of American citizens.  Do you have a heated residence and indoor plumbing?  An automobile?  Internet access?  Congratulations, you're part of the global elite!

And if you're above that basic level of wealth, I assure you that you're still considered destitute by someone higher up on the ladder than you are.  Jeff Bezos has lunch with his friends and tries not to wince at how shabby their 70 foot yacht is compared to his megacruiser.  Oh it must be so hard to live with a private yacht staff of only 9 people!  It doesn't even have a helipad, what are you supposed to do if you run out of milk and need to fly into town real quick, nevermind having a medical emergency while at sea.  A yacht that size is literally a deathtrap!  Your poverty is a threat to your health and safety, you have to earn more!

Yeah, I realize that having indoor plumbing is the good life. But considering that there was recently a whole long thread about whether people were "badass" enough to live in a mobile home, I think we're going to have to narrow down the possibilities.

Because actually, anyone can "retire" today if they want to get a cardboard box and move down under the nearest bridge...

mizzourah2006

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Re: Bloomberg: Millennials Dreaming of Retiring at 30 Have a Math Problem
« Reply #119 on: September 11, 2018, 01:12:32 PM »
.....
Now could most people do better....absolutely, but to pretend it's a cake walk for the average household to call it quits after 15 years of work is a bit of an exaggeration IMO.

Wherever did you get the idea that people are saying it is a cake walk for the average household (with kids) to call it quits after 15 years of work?   

One reason I hear people argue against FIRE being possible, is that they think that there is an implied criticism if they have not / aren't doing it.   There isn't.  Instead, it is just a wake up call to reflect on the choices that got you to where you are now, and support for a plan to move forward to make FIRE happen if you want it to.  If you wake up late (like me), you may not make FIRE before 40, but still do it within 7 to 15 years of where you are now.

FIRE is being drastically undersold.  With the median income in the U.S. as high as it is, the savings rate is absolutely pathetic.  A great many folks are clearly able to save a lot more and are choosing not to. 

30 is ambitious, but if the median household does everything they can, so what if they end up being able to FIRE at 40 instead of 30? Sure as hell beats the whole "70 is the new 65" crap I hear these days.
literally the post I quoted said it's relatively straightforward for the median household to do it by 40. That's roughly 15 earning years, maybe 17 if you start right away with a good income. Also someone said earlier that a plumber or an electrician should be able to do it by 30 if they start at 18-20.

chaskavitch

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Re: Bloomberg: Millennials Dreaming of Retiring at 30 Have a Math Problem
« Reply #120 on: September 11, 2018, 01:19:20 PM »
Just fyi, anonymouscow posted a case study https://forum.mrmoneymustache.com/case-studies/making-under-30k-saving-zero/, for any of you who were offering advice earlier.

Cranky

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Re: Bloomberg: Millennials Dreaming of Retiring at 30 Have a Math Problem
« Reply #121 on: September 11, 2018, 01:23:16 PM »
I don't see the math to retire at 30 without a crypto jackpot or inheritance.

arebelspy did it, and he and his wife were both school teachers.  They took out mortgages on rental properties, retired at 30, and are now multimillionaires who travel the world on their passive income.

I retired at age 41, but I didn't get my first real job until I was 31 because I was in graduate school until then.  I did it the boring way, mostly by saving more than half of our family income and buying index funds.  Either way, I think ten years of working is approximately sufficient.

The graduate student route is interesting because it delays the years when you earn substantial income, but it allows you to experience many more years of lean living. My expenses of $2,000/month when I was in graduate school included living car-free.

It also gave me practice at seeing the lifestyles of my college friends (many of whom are doctors) inflate, while mine did not.

Itís funny, I lived pretty well as a grad student too and traveled, did whatever, but had no house or car, which is the same as now except I make a shit ton more. The grad life showed me what I can do with less and how to survive in the big city. The difference between now and then is that my place is a bit nicer, my vacations a bit longer, I can eat at fancy restaurants and I have savings, which didnít even seem possible then. Looking back I realize I could have actually saved a lot if I had approached things differently. In your 20s you can live with several people, eat junk food and have fun just hanging out or playing video games, their expenses are generally a lot less. No kids, no day care, no big commutes. But is that sustainable? Probably not. However, if they can save a couple hundred iby 30, what will that grow to over the next 30 years?

We were actually really, really poor when we were grad students. It's hard to work out the equivalence in today's dollars, because it's been a while, but we lived in really horrible apartments and it felt like we reeled from one car disaster to the next, and we couldn't afford to go to the dentist, and I didn't buy a single item of clothing besides shoes for about 5 years. It was for sure the experience that made me the cheap person that I am today, but I absolutely do not remember it fondly.

Goldielocks

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Re: Bloomberg: Millennials Dreaming of Retiring at 30 Have a Math Problem
« Reply #122 on: September 11, 2018, 01:49:05 PM »
mizzourah2006
Okay,  we need to re-evaluate what you mean by the "median household".   I can guarantee you that the "Median income " quoted for your area is NOT what the "Median household with kids" is earning.

 
The Median household income for my area is $76k -- all family types.
Average single person income is $39k.  (not quite double the minimum wage)
The median income for a two parent family, with kids under 18 is about $110k. (Combines single and dual income households).
Huge difference.  (nb. 2016 numbers)

It should be possible for a single person with $40k in income to retire by age 40... as long as they start trying early, can set up their shared housing costs to be lower than average.

It is possible for the median household, with kids, earning the median two parent household income to retire by 40.   I started late (it did not occur to me until after age 35, so did not focus on it early, typical spending habits) and we did it by age 45.  Single income, two kids, HCOLA.  DH is working for a modest salary, I am retired now, but we could move to LCOLA and be fully retired if we chose to.

letsdoit

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Re: Bloomberg: Millennials Dreaming of Retiring at 30 Have a Math Problem
« Reply #123 on: September 11, 2018, 02:26:28 PM »


But instead of focusing on insane goals like retiring by 30, why not examine retiring 5 years earlier? Would most average income earners be disappointed with 5 years of additional freedom?


why not write off the idea of saving just bc you cant retire by 30. 
these mags like money set up stupid premises like this to catch people's eye.

mizzourah2006

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Re: Bloomberg: Millennials Dreaming of Retiring at 30 Have a Math Problem
« Reply #124 on: September 11, 2018, 02:31:16 PM »
mizzourah2006
Okay,  we need to re-evaluate what you mean by the "median household".   I can guarantee you that the "Median income " quoted for your area is NOT what the "Median household with kids" is earning.

 
The Median household income for my area is $76k -- all family types.
Average single person income is $39k.  (not quite double the minimum wage)
The median income for a two parent family, with kids under 18 is about $110k. (Combines single and dual income households).
Huge difference.  (nb. 2016 numbers)

It should be possible for a single person with $40k in income to retire by age 40... as long as they start trying early, can set up their shared housing costs to be lower than average.

It is possible for the median household, with kids, earning the median two parent household income to retire by 40.   I started late (it did not occur to me until after age 35, so did not focus on it early, typical spending habits) and we did it by age 45.  Single income, two kids, HCOLA.  DH is working for a modest salary, I am retired now, but we could move to LCOLA and be fully retired if we chose to.

This is a bit overly simplistic, because it assumes people always earn the same income over time. How much more did your husband earn when he was 35 than he did at 25? Did you already have a down payment for a home? Equity? Did you still have car payments, student loan payments, etc.? Does a 28 year old couple with a 2 year old make the same amount as a 38 year old couple with a 12 year old in general? I know for us in particular our HH income when I was 28 was about $70k/yr, now at 35 it's significantly more than that. We also only had about $10k positive networth to our names because of grad school and my wife jumping around a lot because of my early career. We didn't have money for a down payment on a home yet, and our cars were approaching 10-12 years old. Now if you fast forward to 35 and 33, which is where we are today, we have a home, with a reasonable mortgage because we were able to save to put the 20% down, and two paid off cars, so our expenses would leave tons of room for saving if our HH income was $110k, especially if one person stayed home and we didn't have to drop the $20k/yr we currently pay for childcare. In general it's going to be easier for a household to start at 35 than it will be to start at 25. So sure...it's probably relatively easy for an upper middle class couple with limited debt and good health to start at 35 and be able to retire at 50. That's not exactly what we were talking about though, is it?


why not write off the idea of saving just bc you cant retire by 30. 
these mags like money set up stupid premises like this to catch people's eye.

I think the real answer is most people can't envision their 55 year old self at 25-30. So in reality they start to envision that at 40-45 and then at that point they have fixed expenses (heloc for a pool, new truck payment, kids private school, college, etc.) that make it difficult to start saving the 40-50% necessary to be able to retire in 15 years.  I'm not saying it's ideal, just giving what I see as reality. I have so many friends that are my age (early-mid 30s) that are burying themselves in debt. New pool, when they already have over $100k in SL debt, new $400k home when they barely make $100k/yr, etc. Then they are telling my wife and I they can't do friends vacations anymore because they just don't have the money....I wonder why?
« Last Edit: September 11, 2018, 02:35:44 PM by mizzourah2006 »

Goldielocks

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Re: Bloomberg: Millennials Dreaming of Retiring at 30 Have a Math Problem
« Reply #125 on: September 11, 2018, 02:34:13 PM »
My husband earned $0 when he was 35.  ;P   
I had two maternity leaves in my 30's, which dropped my income, too..
I did have 5 years of strong income, starting in my late 30's but we still made less than most people around us with 2 incomes.   We also lost a huge amount of money in 2008-2010 stockmarket (realized loss, not just a paper loss).

Every situation is different...   AND, we could have done this much sooner, on much lower income, if we had stayed in a mid COLA, rather than moving to San Francisco and where we are now.   If I had stayed put at 34, and not chased the 50% higher income, we would have a paid off home and much more FIRE expense money.
« Last Edit: September 11, 2018, 02:40:19 PM by Goldielocks »

maizeman

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Re: Bloomberg: Millennials Dreaming of Retiring at 30 Have a Math Problem
« Reply #126 on: September 11, 2018, 02:43:33 PM »
Obviously, just about anything is possible if you are willing to sacrifice enough, I get that. But is that really the FIRE we want to show the world?

For me, it is. Now that doesn't mean things aren't easier if you make more money. But what you're describing is one of the fundamental insights reading MMM (or ERE) provides:

-If you are really unhappy with your current job/life situation, you have the power to change it. If you make more money you do have even more options, but EVERYONE has options open to them if changing their current life is important enough to them. This is exactly the face of FIRE I want the world to see.

-The other key insight learning about FIRE provides is that a lot of changes that many people expect to feel like sacrifices are actually neutral or can actually increase happiness in the end. The only way to confidently discover which changes really do harm happiness and which ones don't for a particular person is to experiment.*

The majority of the rest of what you learn reading about FIRE is implementation or optimization of those two core concepts.

mizzourah2006
Okay,  we need to re-evaluate what you mean by the "median household".   I can guarantee you that the "Median income " quoted for your area is NOT what the "Median household with kids" is earning.

 
The Median household income for my area is $76k -- all family types.
Average single person income is $39k.  (not quite double the minimum wage)
The median income for a two parent family, with kids under 18 is about $110k. (Combines single and dual income households).
Huge difference.  (nb. 2016 numbers)

I was scrolling to the end of the thread to make this point but it seems like you have things well in hand. Way to go Goldielocks.

inline five

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Re: Bloomberg: Millennials Dreaming of Retiring at 30 Have a Math Problem
« Reply #127 on: September 11, 2018, 02:48:42 PM »
mizzourah2006
Okay,  we need to re-evaluate what you mean by the "median household".   I can guarantee you that the "Median income " quoted for your area is NOT what the "Median household with kids" is earning.

 
The Median household income for my area is $76k -- all family types.
Average single person income is $39k.  (not quite double the minimum wage)
The median income for a two parent family, with kids under 18 is about $110k. (Combines single and dual income households).
Huge difference.  (nb. 2016 numbers)

It should be possible for a single person with $40k in income to retire by age 40... as long as they start trying early, can set up their shared housing costs to be lower than average.

It is possible for the median household, with kids, earning the median two parent household income to retire by 40.   I started late (it did not occur to me until after age 35, so did not focus on it early, typical spending habits) and we did it by age 45.  Single income, two kids, HCOLA.  DH is working for a modest salary, I am retired now, but we could move to LCOLA and be fully retired if we chose to.

Living with roommates until 40...and then afterward too so you can "retire".

Sounds like an awesome "retirement"!

It's funny, with all these articles, and examples, very few if any lack an "*" that doesn't say that the other partner is still working, or that they "could be" retired but choose not to be (hmmm) etc. etc.

The ones I have met that are financially independent have done it with real estate but they have all continued to work in some capacity.
« Last Edit: September 11, 2018, 03:14:50 PM by inline five »

maizeman

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Re: Bloomberg: Millennials Dreaming of Retiring at 30 Have a Math Problem
« Reply #128 on: September 11, 2018, 02:51:49 PM »
Living with roommates until 40...and then afterward too so you can "retire".

Sounds like an awesome "retirement"!

So this particular lifestyle isn't for you. That's okay.

Why is it important to you to tear other people down if they do find the lifestyle trade off to escape work earlier worth it?

Goldielocks

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Re: Bloomberg: Millennials Dreaming of Retiring at 30 Have a Math Problem
« Reply #129 on: September 11, 2018, 02:58:56 PM »
mizzourah2006
Okay,  we need to re-evaluate what you mean by the "median household".   I can guarantee you that the "Median income " quoted for your area is NOT what the "Median household with kids" is earning.

 
The Median household income for my area is $76k -- all family types.
Average single person income is $39k.  (not quite double the minimum wage)
The median income for a two parent family, with kids under 18 is about $110k. (Combines single and dual income households).
Huge difference.  (nb. 2016 numbers)

It should be possible for a single person with $40k in income to retire by age 40... as long as they start trying early, can set up their shared housing costs to be lower than average.

It is possible for the median household, with kids, earning the median two parent household income to retire by 40.   I started late (it did not occur to me until after age 35, so did not focus on it early, typical spending habits) and we did it by age 45.  Single income, two kids, HCOLA.  DH is working for a modest salary, I am retired now, but we could move to LCOLA and be fully retired if we chose to.

Living with roommates until 40...and then afterward too so you can "retire".

Sounds like an awesome "retirement"!

It's funny, with all these articles, and examples, very few if any lack an "*" that doesn't say that the other partner is still working, or that they "could be" retired but choose not to be (hmmm) etc. etc.

The ones I have met that are financially indepdent have done it with real estate but they have all continued to work in some capacity.

First -- some people would prefer that roommate-sharing accommodation lifestyle to working long hours, it is just a choice.  I could travel, have a nice car if I worked.  BUT I would rather have time with the kids and my health, so I stopped working and FIRED (my way).

Agreed about the articles and the (*).  That is exactly my point , too-- the NYT examples are all filled with that, those exceptions,  so why do people take away that FIRE is about "Everyone can/should retire at 30 or you are doing it wrong!".. ?


The truth is, even if you stop working, most people keep active, somehow, and a bit of income trails in .. along with a bit of work (passive or active) without the stress or the compromises that a "Career" brings.

chaskavitch

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Re: Bloomberg: Millennials Dreaming of Retiring at 30 Have a Math Problem
« Reply #130 on: September 11, 2018, 03:06:43 PM »
mizzourah2006
Okay,  we need to re-evaluate what you mean by the "median household".   I can guarantee you that the "Median income " quoted for your area is NOT what the "Median household with kids" is earning.

 
The Median household income for my area is $76k -- all family types.
Average single person income is $39k.  (not quite double the minimum wage)
The median income for a two parent family, with kids under 18 is about $110k. (Combines single and dual income households).
Huge difference.  (nb. 2016 numbers)

It should be possible for a single person with $40k in income to retire by age 40... as long as they start trying early, can set up their shared housing costs to be lower than average.

It is possible for the median household, with kids, earning the median two parent household income to retire by 40.   I started late (it did not occur to me until after age 35, so did not focus on it early, typical spending habits) and we did it by age 45.  Single income, two kids, HCOLA.  DH is working for a modest salary, I am retired now, but we could move to LCOLA and be fully retired if we chose to.

Living with roommates until 40...and then afterward too so you can "retire".

Sounds like an awesome "retirement"!

It's funny, with all these articles, and examples, very few if any lack an "*" that doesn't say that the other partner is still working, or that they "could be" retired but choose not to be (hmmm) etc. etc.

The ones I have met that are financially indepdent have done it with real estate but they have all continued to work in some capacity.

First -- some people would prefer that roommate-sharing accommodation lifestyle to working long hours, it is just a choice.  I could travel, have a nice car if I worked.  BUT I would rather have time with the kids and my health, so I stopped working and FIRED (my way).

Agreed about the articles and the (*).  That is exactly my point , too-- the NYT examples are all filled with that, those exceptions,  so why do people take away that FIRE is about "Everyone can/should retire at 30 or you are doing it wrong!".. ?


The truth is, even if you stop working, most people keep active, somehow, and a bit of income trails in .. along with a bit of work (passive or active) without the stress or the compromises that a "Career" brings.

I posted this on the "Yay, we're boring and mainstream" thread as well, but the NYT just published a follow-up to the original article, "Your Questions about FIRE, answered": https://www.nytimes.com/2018/09/11/style/what-is-fire-financial-independence-retire-early.html 

I think it's a decent addition, it goes over some college and health care decisions a little, as well as retiring before a downturn, but still, the five comments are all huge downers.  Three about how you're terrible if you don't fund your children's education, one about how it wouldn't work if you started in a REALLY bad year like 1968, and one about how everything will fall apart when divorce happens, "as it will to many of these couples".  People just like to nitpick strangers on the internet.  It's weird.

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Re: Bloomberg: Millennials Dreaming of Retiring at 30 Have a Math Problem
« Reply #131 on: September 11, 2018, 03:07:05 PM »
Living with roommates until 40...and then afterward too so you can "retire".

Sounds like an awesome "retirement"!

So this particular lifestyle isn't for you. That's okay.

Why is it important to you to tear other people down if they do find the lifestyle trade off to escape work earlier worth it?

When something is wellllll outside societal norms it shouldn't be used as the yardstick to determine if something is possible or not. It's your business if that is the lifestyle you want, but it doesn't belong in conversation on a national scale.

I used to rent a bed in a two bedroom apartment. There were SIXTEEN other beds in the TWO BEDROOM apartment. Hey, it was cheap! Just think how quickly I could've retired* if I continued to live that lifestyle!

*if you're ok living with sixteen other people, in an apartment in the city, sharing a single fridge, stove, etc. etc.
« Last Edit: September 11, 2018, 03:15:49 PM by inline five »

inline five

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Re: Bloomberg: Millennials Dreaming of Retiring at 30 Have a Math Problem
« Reply #132 on: September 11, 2018, 03:13:27 PM »
In addition keep in mind the market has rewarded folks who called it quits with an unprecedented return on their investments. Between 2016 and today for example VTSAX is up 50%...

It's easy to write about how easy it is to walk away when your investment gains have been out of this world. We personally have added over $1m to our net worth since then. Are we geniuses or just lucky with market timing?

maizeman

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Re: Bloomberg: Millennials Dreaming of Retiring at 30 Have a Math Problem
« Reply #133 on: September 11, 2018, 03:15:53 PM »
Living with roommates until 40...and then afterward too so you can "retire".

Sounds like an awesome "retirement"!

So this particular lifestyle isn't for you. That's okay.

Why is it important to you to tear other people down if they do find the lifestyle trade off to escape work earlier worth it?

Because it's a fantasy world. Same with those who "retire" and literally live in a van down by the river and subsist off government assistance (ie healthcare).

That is wellllll outside societal norms and shouldn't be used as the yardstick to determine if something is possible or not. It's your business if that is the lifestyle you want, but it doesn't belong in conversation on a national scale.

So to paraphrase your statement above: you are saying that if most people don't do a thing (it is outside of societal norms), that means it isn't actually possible to do that thing?

Again, how does it harm you if people make life choices that are outside of what you consider to be societal norms? How does it hurt you if those people talk about what they did and how they accomplished it?

inline five

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Re: Bloomberg: Millennials Dreaming of Retiring at 30 Have a Math Problem
« Reply #134 on: September 11, 2018, 03:30:47 PM »
Living with roommates until 40...and then afterward too so you can "retire".

Sounds like an awesome "retirement"!

So this particular lifestyle isn't for you. That's okay.

Why is it important to you to tear other people down if they do find the lifestyle trade off to escape work earlier worth it?

Because it's a fantasy world. Same with those who "retire" and literally live in a van down by the river and subsist off government assistance (ie healthcare).

That is wellllll outside societal norms and shouldn't be used as the yardstick to determine if something is possible or not. It's your business if that is the lifestyle you want, but it doesn't belong in conversation on a national scale.

So to paraphrase your statement above: you are saying that if most people don't do a thing (it is outside of societal norms), that means it isn't actually possible to do that thing?

Again, how does it harm you if people make life choices that are outside of what you consider to be societal norms? How does it hurt you if those people talk about what they did and how they accomplished it?

First it doesn't harm me a bit and I never said that, why even write that?

Second you're not going to gain any national traction if your national news article title is "Retire At Age XX!*"

*must live with roommates your entire life, or in a vehicle, have no spouse or kids, and subsist on government welfare, or by "retire" we mean the other spouse continues to work so really instead of a DINK you are now just a single income household...

People will just roll their eyes. It's one thing to do something for a short time period to "jump ahead" and then enjoy the fruits of your labor. It's an entirely different story when you want to completely change the lifestyle of society and of course (and rightly so) people will just blow off whatever else you may offer of value like the writers are doing as well as commentators on these articles.

I fully support becoming financially independent and parlaying that into a gratifying life. It's an amazing feeling to not have to worry about losing my income. Had I not already found a career with awesome flexibility I would be pursuing something more satisfying. That is what all those who have "retired" ended up doing for the most part (unless their spouse continued working, which isn't really being retired, but whatever).

maizeman

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Re: Bloomberg: Millennials Dreaming of Retiring at 30 Have a Math Problem
« Reply #135 on: September 11, 2018, 03:51:18 PM »
Living with roommates until 40...and then afterward too so you can "retire".

Sounds like an awesome "retirement"!

So this particular lifestyle isn't for you. That's okay.

Why is it important to you to tear other people down if they do find the lifestyle trade off to escape work earlier worth it?

Because it's a fantasy world. Same with those who "retire" and literally live in a van down by the river and subsist off government assistance (ie healthcare).


Again, how does it harm you if people make life choices that are outside of what you consider to be societal norms? How does it hurt you if those people talk about what they did and how they accomplished it?

First it doesn't harm me a bit and I never said that, why even write that?

Why complain that others are willing to consider lifestyle choices you wouldn't choose to make yourself? Why motivated you to write your original post (first one quoted in the nested quotes above)?

Quote
Second you're not going to gain any national traction if your national news article title is "Retire At Age XX!*"

*must live with roommates your entire life, or in a vehicle, have no spouse or kids, and subsist on government welfare, or by "retire" we mean the other spouse continues to work so really instead of a DINK you are now just a single income household...

First of all, none of the articles we're discussing had a title "Retire at Age XX!" with or without an asterisk.

Second of all, having a spouse generally makes hitting FIRE easier, not harder, because you can save more than twice as fast in a two income household as you each gain the same financial advantages of living with a roommate, but, unlike a roommate, it is certainly well within societal norms to live with your spouse for the entire rest of your life.

Third of all, I do agree that having kids is extremely expensive. For some people having children is also extremely important and emotionally rewarding. Other people have no real desire to have children. All things being equal, deciding to have children probably means you will need to spend more years of your life working than if you decide not to have children. Like all major life decisions, it's a matter of deciding personal desires and priorities and there is not a wrong answer.

Fourth of all, how does government welfare enter into any this?

Quote
People will just roll their eyes. It's one thing to do something for a short time period to "jump ahead" and then enjoy the fruits of your labor. It's an entirely different story when you want to completely change the lifestyle of society and of course (and rightly so) people will just blow off whatever else you may offer of value like the writers are doing as well as commentators on these articles.

Changing your lifestyle is a core part of both MMM's message and the ERE message before it. It's good for your bank account, good for the planet, and (often) actually good for people's happiness and satisfaction in life.

I certainly agree that a message of "you can retire early without having to make any changes to the way you live your life at all" would sell better to random magazine or newspaper readers. Unfortunately, it would also be false (unless they were already on a path to FIRE in which case there's nothing to sell in the first place).

Quote
I fully support becoming financially independent and parlaying that into a gratifying life. It's an amazing feeling to not have to worry about losing my income. Had I not already found a career with awesome flexibility I would be pursuing something more satisfying. That is what all those who have "retired" ended up doing for the most part (unless their spouse continued working, which isn't really being retired, but whatever).

I agree with you here (with the exception of the last sentence, as I feel no need to be the Internet Retirement Police when it comes to what situations bring happiness to other people, why do you?).

mizzourah2006

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Re: Bloomberg: Millennials Dreaming of Retiring at 30 Have a Math Problem
« Reply #136 on: September 11, 2018, 03:53:58 PM »
Anyone have the citation for the median HH income for families with kids being $110k? I can't seem to find that. All I found was this: https://www.census.gov/data/tables/time-series/demo/income-poverty/cps-hinc/hinc-04.html#par_list_11

The data I see is family households with children under 18 in the home had a median income in 2016 of ~$73k and married households was $94k. This ignores the fact that over 30% of households with kids in them are 1 parent households as well.

maizeman

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Re: Bloomberg: Millennials Dreaming of Retiring at 30 Have a Math Problem
« Reply #137 on: September 11, 2018, 04:02:29 PM »
Anyone have the citation for the median HH income for families with kids being $110k? I can't seem to find that. All I found was this: https://www.census.gov/data/tables/time-series/demo/income-poverty/cps-hinc/hinc-04.html#par_list_11

The data I see is family households with children under 18 in the home had a median income in 2016 of ~$73k and married households was $94k.

It would appear that you at looking at national numbers while Goldielocks stated that they were quoting numbers the specific region they lived in, and quoted both the median household income for that region and the median income for two parent households with kids in that region.

Both were higher than national numbers, but the important thing to note is the ratio between the two. You were discussing a four person household -- presumably two parents plus two kids? -- which was making the median household income as typical, but as the data showed, a four person two parent household making the median income for all household types actually has an income significantly below what one might expect for a median household of that particular type.

mathlete

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Re: Bloomberg: Millennials Dreaming of Retiring at 30 Have a Math Problem
« Reply #138 on: September 11, 2018, 04:08:42 PM »
I had lots of things demanding my time yesterday and it appears that I've lost the thread.

To address @maizeman on the primary way in which FIRE is presented to the genpop, I can pull together something pretty quickly here.

Media coverage of FIRE is tantamount to free (I assume?) advertising for a person's blog or book.

MarketWatch post profiles someone called OurNextLifetLife1

Long on saving and discipline. Short on income talk, with a side of directly declining to mention account balances. You could make the point that MarketWatch has a high income readership already and thus the reader's income is likely on the same order of magnitude as OurNextLife's was, but even so, light on the income side by my estimation.

Vice profiles someone named Kristy Shen and her husband, as well as a guy named Steve Adcock2

All about "frugality", nothing on income, which by clicking around the blogs of those profiled, is a fucking lot.

Big ups to Steve Adcock here though, because on his FAQ page, he's got this listed:

Quote
How can I possibly relate to you guys if you were making hundreds of thousands a year?

Maybe you canít, and thatís okay. This blog wonít be right for absolutely everyone.

He could have easily pointed to "shockingly simple math" and concluded that income doesn't matter, as some people have, and that you should continue clicking his affiliate links, but he didn't. I love that.

Business Insider Article on what 8 early retirees wish they knew before retiring3

This is the fluffiest of fluff pieces. Everyone's got a blog or a book.

---

I just searched for these articles around the internet, almost at random. This is what I believe to be the lion's share of media reporting on early retirement. It's fluffy, light reading at best, and a misleading sales pitch at worst.

My ideal world would be one in which there was exclusively good journalism as it relates to the internet personal finance community. We're not getting that though, so I'm fine with a little bit of critical bad journalism (Bloomberg) to counteract the fluffy bad journalism (almost everything else).

1https://www.marketwatch.com/story/this-couple-went-from-workaholics-to-early-retirees-in-six-years-2017-10-23

2https://free.vice.com/en_us/article/qvnwvq/financial-independence-retire-early

3https://www.businessinsider.com/early-retirement-advice-what-to-know-before-retiring-early-2018-6

Goldielocks

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Re: Bloomberg: Millennials Dreaming of Retiring at 30 Have a Math Problem
« Reply #139 on: September 11, 2018, 11:50:28 PM »
Anyone have the citation for the median HH income for families with kids being $110k? I can't seem to find that. All I found was this: https://www.census.gov/data/tables/time-series/demo/income-poverty/cps-hinc/hinc-04.html#par_list_11

The data I see is family households with children under 18 in the home had a median income in 2016 of ~$73k and married households was $94k. This ignores the fact that over 30% of households with kids in them are 1 parent households as well.
It was pulled from StatsCan, for the province of BC.  I used it to show the underlying disparity between average income, average household income, single income average, and two parent household with kids average.

The news here always report on the "median income"... but that median income includes working students, voluntary part timers, singles, as well as full time career folks.  Turns out there are a lot of part timers out there.

mm1970

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Re: Bloomberg: Millennials Dreaming of Retiring at 30 Have a Math Problem
« Reply #140 on: September 12, 2018, 11:17:09 AM »
Living with roommates until 40...and then afterward too so you can "retire".

Sounds like an awesome "retirement"!

So this particular lifestyle isn't for you. That's okay.

Why is it important to you to tear other people down if they do find the lifestyle trade off to escape work earlier worth it?
+1

What's wrong with roommates?  Or shared  housing?  I have roommates.  Yeah, they call me "honey", and "mommy" but still...

spartana

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Re: Bloomberg: Millennials Dreaming of Retiring at 30 Have a Math Problem
« Reply #141 on: September 12, 2018, 01:39:19 PM »
Living with roommates until 40...and then afterward too so you can "retire".

Sounds like an awesome "retirement"!

So this particular lifestyle isn't for you. That's okay.

Why is it important to you to tear other people down if they do find the lifestyle trade off to escape work earlier worth it?
+1

What's wrong with roommates?  Or shared  housing?  I have roommates.  Yeah, they call me "honey", and "mommy" but still...
Yeah but those "roommates" cost you money instead of give you money. Plus they've been known to whine ;-).

I had a couple of roommates after my divorce. The extra money for a few years post-divorce helped me FIRE. Once I quit my job and started living on savings I booted them out and have mostly lived alone since then. I recently got a roommate who not only pays me enough money to cover all my housing expenses but also acts as a free house and pet sitter so I can travel as much as I want, as long as I want. It's an awesome thing.
« Last Edit: September 12, 2018, 01:43:19 PM by spartana »

spartana

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Re: Bloomberg: Millennials Dreaming of Retiring at 30 Have a Math Problem
« Reply #142 on: September 13, 2018, 04:58:36 PM »
I had lots of things demanding my time yesterday and it appears that I've lost the thread.

To address @maizeman on the primary way in which FIRE is presented to the genpop, I can pull together something pretty quickly here.

Media coverage of FIRE is tantamount to free (I assume?) advertising for a person's blog or book.

MarketWatch post profiles someone called OurNextLifetLife1

Long on saving and discipline. Short on income talk, with a side of directly declining to mention account balances. You could make the point that MarketWatch has a high income readership already and thus the reader's income is likely on the same order of magnitude as OurNextLife's was, but even so, light on the income side by my estimation.

Vice profiles someone named Kristy Shen and her husband, as well as a guy named Steve Adcock2

All about "frugality", nothing on income, which by clicking around the blogs of those profiled, is a fucking lot.

Big ups to Steve Adcock here though, because on his FAQ page, he's got this listed:

Quote
How can I possibly relate to you guys if you were making hundreds of thousands a year?

Maybe you can’t, and that’s okay. This blog won’t be right for absolutely everyone.

He could have easily pointed to "shockingly simple math" and concluded that income doesn't matter, as some people have, and that you should continue clicking his affiliate links, but he didn't. I love that.

Business Insider Article on what 8 early retirees wish they knew before retiring3

This is the fluffiest of fluff pieces. Everyone's got a blog or a book.

---

I just searched for these articles around the internet, almost at random. This is what I believe to be the lion's share of media reporting on early retirement. It's fluffy, light reading at best, and a misleading sales pitch at worst.

My ideal world would be one in which there was exclusively good journalism as it relates to the internet personal finance community. We're not getting that though, so I'm fine with a little bit of critical bad journalism (Bloomberg) to counteract the fluffy bad journalism (almost everything else).

1https://www.marketwatch.com/story/this-couple-went-from-workaholics-to-early-retirees-in-six-years-2017-10-23

2https://free.vice.com/en_us/article/qvnwvq/financial-independence-retire-early

3https://www.businessinsider.com/early-retirement-advice-what-to-know-before-retiring-early-2018-6
Part of the problem is that many younger people who FIRE don't blog about it and want to remain anonymous so their story never gets out there. The main stream news articles only have a few well know bloggers to choose from. And even then they choose not to tell their whole story but pick select parts of it to appeal to their readers. While retiring at 30 or in your 30's might still be a tiny fraction of the FIRE crowd, I believe there are more out there who just don't talk about it or who's path to FIRE and RE life are too mundane to be worthy media coverage.

Zikoris

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Re: Bloomberg: Millennials Dreaming of Retiring at 30 Have a Math Problem
« Reply #143 on: September 13, 2018, 05:53:00 PM »
Part of the problem is that many younger people who FIRE don't blog about it and want to remain anonymous so their story never gets out there. The main stream news articles only have a few well know bloggers to choose from. And even then they choose not to tell their whole story but pick select parts of it to appeal to their readers. While retiring at 30 or in your 30's might still be a tiny fraction of the FIRE crowd, I believe there are more out there who just don't talk about it or who's path to FIRE and RE life are too mundane to be worthy media coverage.

Very true - there's only one person in our local FIRE club (other than us) who will even consider discussing this stuff publicly, for a lot of reasons. There was definitely a lot of backlash the first time we went "public", so I can't say I really blame them - we do it more as a public service than anything, because, you know, people have all these dumb ideas like you have to make a ton of money to retire early. Or you need expensive education. Or windfalls. Or whatever else.

I was honestly surprised anyone even wanted to feature us in anything, because of how mundane our "system" is - I mean, at least to us. Like, ooh, she rides a bicycle. Aah, he doesn't buy piles of garbage. Wow, here they are eating a home-cooked dinner, while their finances run on autopilot in the background. But apparently what's mundane to us can be pretty revolutionary to the general population.

spartana

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Re: Bloomberg: Millennials Dreaming of Retiring at 30 Have a Math Problem
« Reply #144 on: September 14, 2018, 09:32:37 AM »
Part of the problem is that many younger people who FIRE don't blog about it and want to remain anonymous so their story never gets out there. The main stream news articles only have a few well know bloggers to choose from. And even then they choose not to tell their whole story but pick select parts of it to appeal to their readers. While retiring at 30 or in your 30's might still be a tiny fraction of the FIRE crowd, I believe there are more out there who just don't talk about it or who's path to FIRE and RE life are too mundane to be worthy media coverage.

Very true - there's only one person in our local FIRE club (other than us) who will even consider discussing this stuff publicly, for a lot of reasons. There was definitely a lot of backlash the first time we went "public", so I can't say I really blame them - we do it more as a public service than anything, because, you know, people have all these dumb ideas like you have to make a ton of money to retire early. Or you need expensive education. Or windfalls. Or whatever else.

I was honestly surprised anyone even wanted to feature us in anything, because of how mundane our "system" is - I mean, at least to us. Like, ooh, she rides a bicycle. Aah, he doesn't buy piles of garbage. Wow, here they are eating a home-cooked dinner, while their finances run on autopilot in the background. But apparently what's mundane to us can be pretty revolutionary to the general population.
I remember when your articles came out and you had lots of positive comments and interest in your life. So maybe mundane is exotic when it comes to lbym and saving for ER. Or maybe it's that Canadian politeness ;-).

One thing I've noticed (at least in the US) is that people can be supportive and understand about living frugal and saving as long as you (or your SO if partnered) still have earned income from a job that covers the bills and allows you to have affordable medical coverage. Once you cut the employment cord the naysayers really come out of the wood work. For some reason the idea of ONLY living off investments at a younger age seems to be something that flips the switch from acceptance of your frugal but employed lifestyle to "OMG you are living a terrible life on such a low income!" even if you are living on the same amount as you did when working and saving. I think it's the idea that as long as you or your SO have money from a job you can tap all that income if ever needed so are OK and normal.
« Last Edit: September 14, 2018, 09:37:00 AM by spartana »

bacchi

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Re: Bloomberg: Millennials Dreaming of Retiring at 30 Have a Math Problem
« Reply #145 on: September 14, 2018, 11:12:20 AM »
One thing I've noticed (at least in the US) is that people can be supportive and understand about living frugal and saving as long as you (or your SO if partnered) still have earned income from a job that covers the bills and allows you to have affordable medical coverage. Once you cut the employment cord the naysayers really come out of the wood work.

Anyone in the US -- who doesn't have some sort of guaranteed health insurance -- is taking a risk unless they've really played the OMY card. There's a federal Judge in Fort Worth working on his decision right now about a lawsuit brought by 20 states against the ACA.

What happens if the ACA is struck down and we're back to pre-existing/rescind land? Become an ex-pat or go back to work somewhere that has health insurance. It didn't stop me from becoming a layabout but it's not something to be ignored.


Edit: https://www.nytimes.com/2018/09/05/health/obamacare-mandate-texas-case.html
« Last Edit: September 14, 2018, 11:18:51 AM by bacchi »

bacchi

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Re: Bloomberg: Millennials Dreaming of Retiring at 30 Have a Math Problem
« Reply #146 on: September 14, 2018, 11:15:51 AM »
Everyone's got a blog or a book.

It's always amusing to see blog comments where a majority of the commenters have a linkback to their own blog.

It reminds me of instagram: they follow you, you follow them, until someone in the circle gets to 20k followers and becomes an "influencer" and gets free shit sent to them (which they review -- it's always 5 stars! -- in order to get more free shit).

sol

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Re: Bloomberg: Millennials Dreaming of Retiring at 30 Have a Math Problem
« Reply #147 on: September 14, 2018, 11:18:09 AM »
What happens if the ACA is struck down and we're back to pre-existing/rescind land?

At this point, 8 years after the ACA was passed, I think this concern is reaching for monsters in the dark.  You could make the same argument about social security being rescinded, or the draft being reinstated, or medicare going away, or tax rates going to 90%.  Sure, these things could happen under extreme circumstances, but it's not exactly something anyone expects or plans for.

I think we're firmly into the world of guaranteed heath coverage in the US.  Even if the ACA gets changed, there will be a reasonable replacement.  It's just not politically viably anymore to tell 10 million Americans that they need to fuck off and die.

bacchi

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Re: Bloomberg: Millennials Dreaming of Retiring at 30 Have a Math Problem
« Reply #148 on: September 14, 2018, 11:30:42 AM »
What happens if the ACA is struck down and we're back to pre-existing/rescind land?

At this point, 8 years after the ACA was passed, I think this concern is reaching for monsters in the dark.  You could make the same argument about social security being rescinded, or the draft being reinstated, or medicare going away, or tax rates going to 90%.  Sure, these things could happen under extreme circumstances, but it's not exactly something anyone expects or plans for.

I think we're firmly into the world of guaranteed heath coverage in the US.  Even if the ACA gets changed, there will be a reasonable replacement.  It's just not politically viably anymore to tell 10 million Americans that they need to fuck off and die.

I edited my previous post to link the NYT article.

https://www.nytimes.com/2018/09/05/health/obamacare-mandate-texas-case.html

It seems like a weak case but Kavanuagh could be the critical vote and he'll side with Trump. The Justice Department is also not defending the pre-existing clause of the ACA.

Quote from: NYT
Since that meant the defendant in the case, the United States government, was effectively siding with the plaintiffs, a coalition of 16 states and the District of Columbia, led by Xavier Becerra, the attorney general of California, intervened as defendants to fight for the law.

The Judge seems critical of the defense and their arguments.

I think you're too optimistic.

sol

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Re: Bloomberg: Millennials Dreaming of Retiring at 30 Have a Math Problem
« Reply #149 on: September 14, 2018, 11:36:03 AM »
I think you're too optimistic.

It wouldn't be the first time.