Is $100k a year a lot? Is it Fat FIRE? Used to think so but starting to wonder!

[tooqk4u22]

As the title says I used to feel that $100k was a lot of money  (Still do I think) and while it is not ferraris and yacht kind of money it is an amount that should provide a fairly cush life meeting all needs and a lot of wants.  $100k feels like it should be Fat FIRE but I am not sure.   But then I think about it more and wonder if $200k is the new $100k?

It seems in the past the line of demarcation for tax policy was in the $200k (married) level but now it seems that has been moved to $400k, which really really used to think that was a shit ton of money, but maybe its not.    I realize some of the latest policies are redistributive by agenda that is focusing mostly on taking back from the 1%, but it still seems like a really high threshold. 

I guess I am feeling that if the government used draw the line at $200k to be the masses of middle class and below and now it is saying $400k then what does it mean for the  $100k or Fat FIRE level, which again I am not sure what the zone of Fat FIRE actually is but $100k to me felt in the range (realizing could be location adjusted). 

Guess I am asking, what level do you consider Fat FIRE and do you think the amounts have or are shifting hire to be Fat FIRE?

[Rdy2Fire]

I think Fat Fire would depend on the individual. I mean if you make or better yet spend 20K a year then maybe 50K is Fat Fire. If you spend 120K a year then FIRE at 100K means you have to make some adjustments. I guess what I am saying is I don't think there is a blanket answer here.

[friedmmj]

I think Fat Fire would depend on the individual. I mean if you make or better yet spend 20K a year then maybe 50K is Fat Fire. If you spend 120K a year then FIRE at 100K means you have to make some adjustments. I guess what I am saying is I don't think there is a blanket answer here.

Housing is the big X-Factor.  In a HCOL, you need to spend well north of $3k a month (36k/yr) to have what I would describe as a "nice but not fancy" house or apartment whereas in a lot of places, that would get you a McMansion with a pool.

[2sk22]

I think I'm fat FIREd by most definitions - using the 4% rule, we could withdraw over 100k. However, since my wife is still working, we haven't had to dip into our savings as yet. Also, I just posted some thoughts about this in my journal.

[jfer_rose]

[Spits out my water] Yes, in my mind $100k per year is clearly Fat FIRE.

You seem to take eligibility thresholds for certain government programs and conclude that anyone below that number is middle class. But I don't understand that logic. Has anyone ever actually considered $200k household as middle class? Because that seems like a huge stretch. I found a website using data from 2020 that stated, "The threshold to be in the top 10% of household incomes in 2020 in the United States was $200,968." If someone's definition of middle class includes the top 10%, it seems that definition is not very helpful.

[terran]

At $100k/year you can buy anything but not everything, which I think is a fair point to call FatFIRE. If the "thing" you choose to buy is living in a HCOL area you'll likely have to make some sacrifices in other areas like how nice a home you live in and large amounts of and/or luxury travel. If you choose to live in a LCOL area then you'll have to make few other sacrifices aside from things that the truly wealthy can do (like private jet owning, politician buying, private charitable foundation running wealthy) which I think is a different game from FIRE and shouldn't be compared. If you can spend $200-400k/year and still stay under the upper bounds of the current talk of "taxing the rich" then you're into obese FIRE or morbidly obese FIRE at which point you can live in a HCOL area and still do just about anything we mere mortals can imagine.

[ixtap]

I find the blanket numbers for lean and fat FIRE laughable. All that time trying to get people to consider their own expenses and these terms have come along to throw it out the window.

I consider lean FIRE to be 25x the minimum I think I can live on without hustling constantly, making my own soap and otherwise making cutting expenses a full time job. I consider fat FIRE to be 33x a little more than I have spent in a  big year so far in my life.

It just depends on your definition of a yacht. Our expenses, with a 40' sailboat, average considerably under $100k, even including the year we purchased the boat and the year we bunched a number of big projects together.

[RWD]

$100k/year is not a lot in terms of income when you are having to allocate it between spending and savings. But $100k/year is a ton for just spending. It may not be Ferraris and yacht money but it is Ferrari or yacht money.

[maizefolk]

The collapse of most local newspapers and other regional media has moved much more of the political discussions that frame things like "what is a middle class income" to a couple of newspapers based in HCOL cities (New York Times, Wall Street Journal, Washington Post) and the "personalities" on 24/7 cable news networks who are often based in the same cities. Because the people who write the news live in extremely high cost of living cities and are surrounded by people who make enough to afford to live in those cities, they develop a skewed sense of what is normal which is reflected in their writing. Because the politicians who pass the laws read those papers and what those television shows, they pick up the same skewed version of what "normal" income are.

Were you following politics back in 2008? I still remember when Charlie Gibson, moderated  a presidential debate:

In the ABC debate in January, he upbraided Clinton by suggesting that a typical New Hampshire "family of two professors" with a joint income "in the $200,000 [MF's note: $250k in today's dollars] category" would be unjustly penalized by her plan to roll back the Bush tax cuts for the wealthiest Americans. He seemed oblivious not merely to typical academic salaries but to the fact that his hypothetical household would be among America's wealthiest (only 3.4 percent earn more).

TL;DR Don't base your views of what a reasonable annual spend is on what you read in the paper or what comes out of DC.

[mall0c]

Yes it's a lot. No it's not FatFIRE. I would call it ChubbyFIRE. But obviously just one person's opinion, there is no standard definition and depends on location and blah blah blah

[robartsd]

I consider lean FIRE to be 25x the minimum I think I can live on without hustling constantly, making my own soap and otherwise making cutting expenses a full time job. I consider fat FIRE to be 33x a little more than I have spent in a  big year so far in my life.

I like your lean FIRE definition (enough that you probably don't need earned income if you stay focused on minimizing expenses) a lot. Your fat FIRE definition depends a lot on how spendypants you have been in the past; although I guess it is based on how YOU would feel about your finances - you can be as spendypants as YOU have ever been without worrying about needing to earn more money.

[FIRE 20/20]

@tooqk4u22 , please check your calendar.  You posted this 8 days too early. 

[Mr. Green]

100k a year is definitely Ferrari territory if you don't have debts. Probably even an older yacht depending on what else someone has going on.

[ericrugiero]

I also look at it more as a % withdraw (or number of X your budget you have saved)

regular FIRE = 4% (or 25X expenses)
lean FIRE = >4% (<25X expenses)  May need to work a little on the side if markets don't play nice
fat FIRE = 3.5% or less (better than 29X expenses)

Looking at it this way makes it location independent.  However, those who plan for FIRE in a HCOL area have an additional safety margin because they could move to a lower cost of living area. 

Some budgets definitely have more "Fat" in them so it's hard to make these comparisons just based on withdraw rate.  One person might have a paid for home, lifetime healthcare, ignore SS and budget $15K/year for travel while saying they have a 4% withdraw rate. Someone else may be at 3.5% but have none of those safety margins.  The one with all the safety margins might actually be safer.  Each situation is unique. 

[Alternatepriorities]

$100k/year is a ton for just spending. It may not be Ferraris and yacht money but it is Ferrari or yacht money.

I really like this answer!

[ericrugiero]

100k a year is definitely Ferrari territory if you don't have debts. Probably even an older yacht depending on what else someone has going on.

+1

You might not have as much left over to spend on everything else but with $100K to spend you could definitely buy a nice Ferrari or a pretty nice boat.  Yacht's have larger ongoing expenses so it's going to be a smaller/older yacht but still possible. 

[2sk22]

100k a year is definitely Ferrari territory if you don't have debts. Probably even an older yacht depending on what else someone has going on.

I think the causality works in the other direction: You can spend $100k per year because you don't have a boat or a Ferrari :-)

[Dicey]

@tooqk4u22 , please check your calendar.  You posted this 8 days too early.

Hahaha!

The answer is that you're looking for love in all the wrong places. The answer is a multiple of your spending. What do you need to build the post-FIRE lifestyle you want? If you have no idea, love 'em or hate 'em, The Frugalwoods Uber Frugal Month is a great tool to figure this out. You can start it any time you want. Build a barebones budget, then add bits and bobs until it feels just right. Then use the multipliers (25x, 33x, whatever). Boom, there's your number.

[tooqk4u22]

Variables like location or single/couple/family make a difference and are hard to reconcile across the board obviously.  I don't think using WR is a good measure as it is more a measure of risk and certainty, possibly wealth too, but not so much spending.   I mean if I have a 3% WR and spend $20k I am pretty sure most would not consider that fat fire (spartana excluded), at least not in the US. 

Maybe WR would be indicative if it was based on just discretionary spending  or something like of my 4% WR about 75% is for discretionary.


Maybe an easier more broad approach is to base it on some % of median household income for one's area.   Median for my town is $95k so would $100k make my family fat fire (or should I base it more on my neighborhood that has a med hh Inc of $150ish)  On one hand, I wouldn't have to pay payroll taxes or set money aside for retirement but I wouldn't have an employer picking up a good chunk of my health care.  Also, fed/state taxes could be less if more from dividends and cap gains and principle drawdown or higher if all from 401k/non-roth IRA, which also impacts Healthcare.   

Maybe 1 to 1.5x median household income for where you live is Fat FIRE

Maybe a multiple of one's location median household income is determinant

>1.5x is hoggish fire
1.0 to 1.5x is fat fire
0.5x to 1.0x is reg fire
< 0.5x is lean fire

A couple at or above the med hh income spending level iwithout work feels pretty fat.   And if doing that in a HCOL then there is the add flex to go to lower COL and be fatter.

IDK, just a thought experiment, as I said I think $100k is a lot but maybe I have it wrong or right.

[Junco]

Yes.

I spent $24,400 last year on necessary living expenses living in Boston which is one of the most expensive cities in the USA. I also have a car so if you remove that (it's not necessary to live a good life in a world-class city), I would have only spent $20,000. This is for just me, my wife is not included in here and I have no kids.

I can basically do whatever I feel like and am happily living a relatively simple life.

If you need at least 4-5x this then yes that is FATfire.

Maybe tack on $10K for each dependant?

Also keep in mind you will probably earn some income outside investments after your FIRE.

[BlueMR2]

100k a year is definitely Ferrari territory if you don't have debts. Probably even an older yacht depending on what else someone has going on.

100%  If I make it to 100k passive land, I may just pick up a used Lambo...  It'd be sufficient funds to support the ownership of one AND continue doing everything else I do.

[bacchi]

Maybe an easier more broad approach is to base it on some % of median household income for one's area.   Median for my town is $95k so would $100k make my family fat fire (or should I base it more on my neighborhood that has a med hh Inc of $150ish)  On one hand, I wouldn't have to pay payroll taxes or set money aside for retirement but I wouldn't have an employer picking up a good chunk of my health care.  Also, fed/state taxes could be less if more from dividends and cap gains and principle drawdown or higher if all from 401k/non-roth IRA, which also impacts Healthcare.   

Presumably those making the median income have a house payment, too. If you're spending $100k without a mortgage or rent, you're definitely in obese fire.

[tipster350]

I will have about $100k/year in retirement. I live in a MHCOL area, high property taxes, and I have a mortgage. I will have to pay full cost for an ACA plan. At my age, I expect healthcare costs in the range of $20-24k all told. Cannot arrange my finances to qualify for ACA subsidies.

I expect my standard of living to be comfortable but not lavish. I will be able to buy organic groceries, whatever I need, and have a little left over to play around with for wants.

This all goes back to the various responses saying whether $100k is fat or not. it's situational. And it depends on what you consider a comfortable life.

[Fish Sweet]

[Spits out my water] Yes, in my mind $100k per year is clearly Fat FIRE.

Not gonna lie, that was my reaction too.  I can't even imagine what I'd have to be doing to spend upwards of 100k a year.  Maybe if I decided to eat out for lobster & steak every meal, travel internationally every other month, buy a McMansion AND a Tesla AND idk a flock of exotic birds?

[ObviouslyNotAGolfer]

It is not much if you live anywhere near the Loss Angeles/ HELL A area. Avoid this area like the plague--good advice for anyone!!

[honeybbq]

Definitely not in my area. Depending on what link you chose, 81k is the average salary in Seattle so 100k puts you barely above average.
https://www.payscale.com/research/US/Location=Seattle-WA/Salary

Housing is also absurd here, 1+ Mil for a free standing house in Seattle proper with more than 2 bedrooms. So taxes alone are going to be 15k in this region.

That in mind, I'd say 150k draw is more like fatfire to me. 100k is still pretty lean since 30k for income taxes, 15k for property taxes (assuming you own your home outright), leaving barely 50k for spending.

[ixtap]

Definitely not in my area. Depending on what link you chose, 81k is the average salary in Seattle so 100k puts you barely above average.
https://www.payscale.com/research/US/Location=Seattle-WA/Salary

Housing is also absurd here, 1+ Mil for a free standing house in Seattle proper with more than 2 bedrooms. So taxes alone are going to be 15k in this region.

That in mind, I'd say 150k draw is more like fatfire to me. 100k is still pretty lean since 30k for income taxes, 15k for property taxes (assuming you own your home outright), leaving barely 50k for spending.

Above average and you don't have to worry about retirement savings anymore...

We spent $50k last year including rent, in a city with a similar COL to Seattle. It really is all in the eye of the beholder.

[Metalcat]

What the fucking fuck?

[joe189man]

This is an impossible question to answer, die-hards like MMM and others on this thread would scoff and call $100k preposterous. I and others would say $100k may not be enough. it all depends on your circumstances (single, couple, kids, HCOL vs LCOL) and where/how you want to live.

[Metalcat]

This is an impossible question to answer, die-hards like MMM and others on this thread would scoff and call $100k preposterous. I and others would say $100k may not be enough. it all depends on your circumstances (single, couple, kids, HCOL vs LCOL) and where/how you want to live.

100K spend may not be enough depending on the lifestyle one chooses, but even in a VHCOL, 100K *spending* is A LOT. Is it an unreasonable amount? No, not if someone wants that lifestyle, but there's no convincing me it's not a luxurious lifestyle. Having the financial ability to live in a VHCOL area in a nice home *is* a luxury.

[joe189man]

This is an impossible question to answer, die-hards like MMM and others on this thread would scoff and call $100k preposterous. I and others would say $100k may not be enough. it all depends on your circumstances (single, couple, kids, HCOL vs LCOL) and where/how you want to live.

100K spend may not be enough depending on the lifestyle one chooses, but even in a VHCOL, 100K *spending* is A LOT. Is it an unreasonable amount? No, not if someone wants that lifestyle, but there's no convincing me it's not a luxurious lifestyle. Having the financial ability to live in a VHCOL area in a nice home *is* a luxury.

I agree with everything you said, many can FIRE with way less and some folks want more than $100k per year to spend, everyone's different. the race from $2-$4 million thread is 93 pages long so plenty of folks want to spend more in retirement or really like what they do

[ericrugiero]

... the race from $2-$4 million thread is 93 pages long so plenty of folks want to spend more in retirement or really like what they do

or are super nervous about the future and caught up in One More Year syndrome to get a really low withdraw rate. 

[MaybeBabyMustache]

This is an impossible question to answer, die-hards like MMM and others on this thread would scoff and call $100k preposterous. I and others would say $100k may not be enough. it all depends on your circumstances (single, couple, kids, HCOL vs LCOL) and where/how you want to live.

100K spend may not be enough depending on the lifestyle one chooses, but even in a VHCOL, 100K *spending* is A LOT. Is it an unreasonable amount? No, not if someone wants that lifestyle, but there's no convincing me it's not a luxurious lifestyle. Having the financial ability to live in a VHCOL area in a nice home *is* a luxury.

I'm going with this. Our expenses in FIRE will be at around around $100k, with 40% of that tied up in property taxes. Of course, we could live somewhere cheaper. Opting to pay that type of property taxes is a luxury choice in and of itself.

[jehovasfitness23]

This is an impossible question to answer, die-hards like MMM and others on this thread would scoff and call $100k preposterous. I and others would say $100k may not be enough. it all depends on your circumstances (single, couple, kids, HCOL vs LCOL) and where/how you want to live.

100K spend may not be enough depending on the lifestyle one chooses, but even in a VHCOL, 100K *spending* is A LOT. Is it an unreasonable amount? No, not if someone wants that lifestyle, but there's no convincing me it's not a luxurious lifestyle. Having the financial ability to live in a VHCOL area in a nice home *is* a luxury.

I'm going with this. Our expenses in FIRE will be at around around $100k, with 40% of that tied up in property taxes. Of course, we could live somewhere cheaper. Opting to pay that type of property taxes is a luxury choice in and of itself.

40k in property taxes?

[dougules]

Fat FIRE is definitely completely subjective and location specific, but look at it from the perspective of a person in the median household in the area.  The average person would consider being able to spend $100k a year pretty well-off.  Then add to it the fact you can spend that without even having a job.  If you can live fancier FIREd than most people who are having to work for it, I'd say that's Fat FIRE. 

[MaybeBabyMustache]

@jehovasfitness23 - yes. Bay Area

[jehovasfitness23]

@jehovasfitness23 - yes. Bay Area

$40k/yr for property taxes? holeeee shit

[nereo]

Too many here have conflated spending with earnings, and pre-FIRE budgets with post.

[Villanelle]

For me this depends on whether there is a paid-off house, and where they are living.  In a VHCOL area and without a paid off house, that's not fat FIRE, IMO  As has been pointed out, living in a VHCOL area is a choice one is buying during FIRE, so I suppose there is an argument to be made surrounding that. 

[Fish Sweet]

It is not much if you live anywhere near the Loss Angeles/ HELL A area. Avoid this area like the plague--good advice for anyone!!

I'd say the VAST majority of people who live in the Los Angeles/SoCal area spend much much less than 100k a year and somehow manage to survive, me included.

[nereo]

It is not much if you live anywhere near the Loss Angeles/ HELL A area. Avoid this area like the plague--good advice for anyone!!

I'd say the VAST majority of people who live in the Los Angeles/SoCal area spend much much less than 100k a year and somehow manage to survive, me included.

Median household income in LA county is $68,044 according to the US census bureau. Do yeah, $100k in spending is far more than the overwhelming majority.

[maizefolk]

I lived in the San Francisco metro area (not SF proper) on $24k/year. Even saved a little (not a lot). Mostly socialized and hung out with people spending the same amount. It wasn't a bad life at all.

Now I live somewhere else that doesn't have as restaurants or public transit, but a mortgage that costs less than my rent back then. It's all about the trade offs different people are willing to make and accept.

I believe the real danger is surrounding yourself with people who do spend $100k/year and getting sucked into doing the same yourself not because that level of spending is the right trade off for you but because your social circle makes it feel "normal." Whether you are living in Memphis or Manhattan there are social circles where $100k/year will seem normal, and others social circles where $100k/year will seem austere.

[BlueMR2]

... the race from $2-$4 million thread is 93 pages long so plenty of folks want to spend more in retirement or really like what they do

or are super nervous about the future and caught up in One More Year syndrome to get a really low withdraw rate.

I think that describes me...  Contingency plan on top of contingency plan, AND still doing OMY.  Having grown up poor I don't want to end up there again.

[phildonnia]

I've sketched a tentative budget for post-FIRE, and it comes to $38k, not including taxes.  That's right around the poverty line for a family my size.  Which goes to show that expense levels are not a good measure of poverty: there's nothing poor or miserable about my life.

But I've always thought of my situation as "fat-FIRE".  My definition is that I am not forced by finances to live simply.  I can, and I will, but I don't have to.  The 4% rule will allow me $100k per year.  So I'm "fat" in the sense that I really don't ever have to think about money again. 

[Metalcat]

I lived in the San Francisco metro area (not SF proper) on $24k/year. Even saved a little (not a lot). Mostly socialized and hung out with people spending the same amount. It wasn't a bad life at all.

Now I live somewhere else that doesn't have as restaurants or public transit, but a mortgage that costs less than my rent back then. It's all about the trade offs different people are willing to make and accept.

I believe the real danger is surrounding yourself with people who do spend $100k/year and getting sucked into doing the same yourself not because that level of spending is the right trade off for you but because your social circle makes it feel "normal." Whether you are living in Memphis or Manhattan there are social circles where $100k/year will seem normal, and others social circles where $100k/year will seem austere.

I agree. I'm surrounded by people who would go bankrupt if they only had $100K to spend each year. It's far more normal in my circle to not be able to pay the bills on only $100K of spending than to find that a lot of money.

...that doesn't mean it's not a lot of money.

[wenchsenior]

It's a lot of money, but it wouldn't be FatFIRE for us, b/c of our particular circumstance, mostly supporting a parent, and partly supporting another parent.

We consider 'scraping' FIRE in our LCOL area 70K/year (given our extenuating circumstances), but we are aiming for 100-130K/year b/c we want to live in a higher cost of living area.

[Metalcat]

It's a lot of money, but it wouldn't be FatFIRE for us, b/c of our particular circumstance, mostly supporting a parent, and partly supporting another parent.

We consider 'scraping' FIRE in our LCOL area 70K/year (given our extenuating circumstances), but we are aiming for 100-130K/year b/c we want to live in a higher cost of living area.

I consider being able to support your parent to be a huge luxury.

We have our regular FIRE amount, and then we have our fat "help support my parents" FIRE amount.

[wenchsenior]

It's a lot of money, but it wouldn't be FatFIRE for us, b/c of our particular circumstance, mostly supporting a parent, and partly supporting another parent.

We consider 'scraping' FIRE in our LCOL area 70K/year (given our extenuating circumstances), but we are aiming for 100-130K/year b/c we want to live in a higher cost of living area.

I consider being able to support your parent to be a huge luxury.

We have our regular FIRE amount, and then we have our fat "help support my parents" FIRE amount.

I agree, and it is an expense that a not insignificant number of people deal with, or partly deal with.

If it were JUST the two of us, 100K would seem like quite a lot. We currently spend ~70K/year with our situation (two houses) in a LCOL area.  We currently don't spend much on anything fun, and would like to spend MORE in retirement between increased recreation, increased medical cost, increased taxes (when we eventually move), and increased housing costs (when we eventually move).

I'm not interested in leanFIRE...I would be anxiety ridden the entire time. We COULD retire on 70K/year, but I know myself and I don't want to be penny pinching and anxious.  ~2 million in cash + a pension is more my comfort level. Mileage will definitely vary by personality and situation, as it should.

[use2betrix]

I don’t think “LeanFIRE” or “FatFIRE” is based on a singular dollar amount.

To me - LeanFIRE and FatFIRE are entirely dependent on ones spending and net worth at retirement in relation to the 4% rule.

For example... FIRE is typically planning based on the 4% rule. I would consider FatFIRE the 1-3% withdrawal rate and LeanFIRE more along the lines of 5%+ withdrawal rate.

For reference, my wife and I spent $100k-$200k for multiple years and it’s really not that hard to do.. Granted, I have a 2020 F250 with about $15k in aftermarket parts, a 2020 Corolla, a offroad camping trailer with around $40k, just dropped $8k on a home gym..

That being said - in those last 3 years while buying these items and spending this money, our savings/investments has grown from $225k to $900k.. That doesn’t include net worth of our other “toys” that we own/have bought..

My spending largely helps make up for the stress of my career. I enjoy my life outside (workout frequently, travel and enjoy things with my life) but buying things that will follow me into FIRE is fine.. I’d rather do it now than when I FIRE.. I’ll still prefer the $350k income and stress induced spending vs a $100k job that’s a breeze...

[flyingaway]

Definitely not in my area. Depending on what link you chose, 81k is the average salary in Seattle so 100k puts you barely above average.
https://www.payscale.com/research/US/Location=Seattle-WA/Salary

Housing is also absurd here, 1+ Mil for a free standing house in Seattle proper with more than 2 bedrooms. So taxes alone are going to be 15k in this region.

That in mind, I'd say 150k draw is more like fatfire to me. 100k is still pretty lean since 30k for income taxes, 15k for property taxes (assuming you own your home outright), leaving barely 50k for spending.

Again, you confused retirement spending with work salary. If you make $150k a year, you should probably spend less than $75k a year, with 401k saving, FICA taxes, child education, etc..