Income a family of four need to live comfortably by state in the U.S.

[SC Maintenance]

Guess that makes me at poverty level, just living on Social Security and not touching my retirement funds. (yet)

But I had a little saved up. My checking account seems to go down about $5000 per year.

How much do you keep in your checking account? You might want to look into T-bills or a CD - they pay over 5%.

 

[Jdeere562]

How much do you keep in your checking account? You might want to look into T-bills or a CD - they pay over 5%.

I just keep a little over $30,000 in checking account. Do have some CD's at that percent.

 

[SC Maintenance]

I just keep a little over $30,000 in checking account. Do have some CD's at that percent.

None of my business, but $20K in a CD would be $1000+ a year.

 

[burbguy82]

I think that seems a bit high

 

[Jetronic]

Interesting chart. Of course it is in a MACRO basis. I wonder how state income and state/ local sales tax figure into the equationView attachment 218958.

we're living comfortably with half that luckily

 

[99Saturn]

I missed it the first time too.

In the chart it defines what it thinks is "comfortable". 20% to savings, and a whopping 30% to having a good ole fun time. With only 50% going to cars, houses, taxes, etc.

If I spent 30% of my income on having a fun time... woohoo! Yeah I'd be comfortable. That's like an overseas trip per year, and then some.

I don't spend 30% of my income on "fun" but I'm pretty comfy. I don't "need" more to be happy. But would I like to spend 30% on fun, while socking away 20% (let alone more)? Sure would!

We could take that data and alter it. Ignoring taxes, if one saves 20%, spends 10% on fun, and 70% goes to life, you can round that chart down by 20%. If you use 10% to savings, 10% to fun, and 80% to getting by, that's like a 30% reduction. Would that be comfy enough for most? I guess if they make above poverty line, maybe?

I did some quick math, using only annual compounding. A 10% savings rate starting at 25 and using 40 years of growth, should get more than 10x in savings for retirement. Granted, one wants to save more for things outside of retirement (kids colleges, etc) but even a 10% savings rate would probably be good enough for "most".

View attachment 218996

You've got to run it out on a "comfortable" salary and 20% savings rate.

 

[Jdeere562]

None of my business, but $20K in a CD would be $1000+ a year.

You are right, but I don't care to cut it short. I was in the nursing home last year and my Daughter had to pay the bills. She cannot access my accounts until I croak.

 

[John105]

This is not quite true. Mortgage payments are slightly higher now than they were in the past.

Also, consider the fact that the current situation with higher house prices and lower rates requires 41% larger down payments to avoid mortgage insurance, despite inflation-adjusted wages only going up 19%.

Because of this, buyers are forced to either save for longer or accept even higher mortgage payments.

Finally, a buyer in 1994 could take advantage of falling rates for over the next decade, and could continually refi. This is not the case for buyers in 2024. Rates are going to stay put for at least the next 5+ years.

So, no, it’s not the same. It may not be as radically different as some claim, but it is indeed worse now than in the past.

1994, adj. for inflation:
Median income: $63,000/yr, $5,250/mo
Median home price: $280,000
Average rate: 8%
20% down payment: $56,000
Monthly payment with 20% down: $1,644
Down payment/yearly income: 89%
Payment/income: 31%

2024:
Median income: $75,000/yr, $6,230/mo
Median home price: $395,000
Average rate: 7.1%
20% down payment: $79,000
Monthly payment with 20% down: $2,050
Down payment/yearly income: 105%
Payment/income: 33%


Not median homes. In many cases they are the same buildings. In cases where it is a newer house, any advancements in technology are offset by degradations in build and materials quality.


Not out of proportion to the technology advances since. The boomers expected to have central heating. Their grandparents… not so much.


Yes, but this is not relevant.

A lot of times it helps to interject plain English and common sense.

My dad graduated as an engineer in 1960 and his first job was on Worth St. in Manhattan. A coop on Park Row was 3 years salary.

Today, the coop is around 870k (1 bed/1 bath). I think it was easier for my dad to get a coop in Manhattan then, than someone graduating as an engineer in 2024.

We can flip the script. The house I own is < 3 years salary for me. But the key is I’m towards the end of my career, not beginning.

 

[supton]

You've got to run it out on a "comfortable" salary and 20% savings rate.

Sheesh, I can only imagine. Would be like hitting the lottery.

 

[demarpaint]

I think much of this is true, though I don’t think it’s just the latest generation.

I remember reading financial literacy books in the early 2000s, and the same thing was being said. People are buying what it took their parents 30+ years to get.

My grandparents lived in a beautiful, large house in a relatively affluent suburb of NYC, just miles outside
Midtown, and they never had central air or many things that seemed to be the norm in the homes that my parents’ generation was building (not to mention the absurd space wasting concepts that were popular in the 90s), let alone cellphones or cable tv, or whatnot. Heck, they had a party line until the phone company wouldn’t allow it. They made good money and traveled a lot and whatnot. They weren’t paupers. But they did without a lot their whole life. It’s just the times.

So I think some of the “doing better” and having more was natural. It was tech. Yes, an iPhone and a streaming plan wasn’t anything they would ever have.

I don’t know that much is being “handed out” today. I think it’s fueled by debt. The marketing types learned about leveraging “keeping up with the Joneses” in the 60s (or before), and kicked the psychology into overdrive in the next decades. So again, who do we have to thank for foisting these schemes on the youngest, newest, and most vulnerable? Their parents were likely spoiled by it, and they are too. But hey, it increases earnings and thus our S&P fund, so the good and bad come linked.

I see your point, I just think it's worse now with the entitlement and handout mentality. Especially with the current situation going on to our south.

 

[supton]

Sheesh, I can only imagine. Would be like hitting the lottery.

Got back to my computer. Lottery indeed.

That's not really realistic, so I set it to making $244k at age 50, this year, then went back in time. I still think the typical person was not making $100k back in 1999 so this doesn't seem right either.

IMO someone would have large jumps in pay every 5 or so years, when they jumped ship, that's more likely.

something like that, maybe.

That seems more realistic... and now I'm sad that I didn't job hop...

 

[SC Maintenance]

I see your point, I just think it's worse now with the entitlement and handout mentality. Especially with the current situation going on to our south.

While I agree with you - the other end is worse. The amount of wealth transferred to the top 1% in the last few years is sickening. Its grown 49% in the last few years.

The ones getting squeezed are the ones in the middle.

https://www.cnbc.com/2024/03/28/wea...e wealth of,seeing their wealth increase 50%.

 

[Bud]

I thought that too when I was young...but having kids and being a Dad is fun and it gets better when you become a Grandpa..

Amen to being a Grandpa.

 

[Bud]

Young/single? Happy with two bean bags plus a cinder block/lumber entertainment center. Then she came along ...

Yep, I remember that exact setup in 1969.

 

[SC Maintenance]

Got back to my computer. Lottery indeed.
View attachment 219085

That's not really realistic, so I set it to making $244k at age 50, this year, then went back in time. I still think the typical person was not making $100k back in 1999 so this doesn't seem right either.
View attachment 219086

IMO someone would have large jumps in pay every 5 or so years, when they jumped ship, that's more likely.
View attachment 219087
something like that, maybe.

That seems more realistic... and now I'm sad that I didn't job hop...

I don't know very many people that were getting 3% raises during the GFC - most were locked down to zero if they were lucky enough to have a job. Also, most lost half their savings during that period.

 

[SubieRubyRoo]

Interesting chart. Of course it is in a MACRO basis. I wonder how state income and state/ local sales tax figure into the equationView attachment 218958.

Looking at that, I make a supermajority of my household income. Now, if my wife could even carry her weight just to get us to that median number for IN… yes, I could live quite comfortably on that with my family of four (plus 6 grandkids). As it is now, she thinks her 13% contribution earns her 60% spending rights… and I’m not comfortable with that.

Going on 11 “happily” married years…

 

[supton]

I don't know very many people that were getting 3% raises during the GFC - most were locked down to zero if they were lucky enough to have a job. Also, most lost half their savings during that period.

True, not every year gets 3%. Hard to write in that number over the years.

Good thing I didn't have any savings back then, means I didn't lose much. Ironically it was not long after it stabilized that I started reading up on this retirement stuff, and saw how my 401k came out unscathed, that I realized I was a fool--and started piling money away. Few more years and I should be "ok".

 

[Dave Hess]

Trillions and trillions of cash pumped into economy after Covid and it affected housing to the point many renters feel they will never own a house.

Lots of house poor Americans are broke just paying house related monthly expenses.

No politician wants to see families thrown out of foreclosed homes before the election.
Wait till election is over and we’ll see what happens.

 

[bullwinkle]

None of my business, but $20K in a CD would be $1000+ a year.

I think that seems a bit high

A 5% CD of $20K would be $1000/year, plus compounding would add some small amount. I actually have a 1 year one that is 6%.

 

[supton]

Trillions and trillions of cash pumped into economy after Covid and it affected housing to the point many renters feel they will never own a house.

One of my coworkers is in MA and while houses there are crazy, rent isn't far behind. 3 years of renting his current place... I think he said it was like $90k? maybe more.

So happy I managed to slide into my first house when I did, for just a bit more than rent. 2005 was a lousy year. But I distinctly remember that mess: I "qualified" for way more than I knew I could pay back--but the lenders were all like "but if that isn't enough, we can find a way!". No wonder it all crashed. Thankfully, as ignorant as I was, I didn't buy as much house as I could "afford", but rather bought what I could afford. When that deck of cards came down, I stopped eating out, that was my concession to a pay cut.