Even in a LCOL area, with a family, I would not feel comfortable on $80k per year as I would not be able to save enough to afford out of pocket healthcare expenses for family, plus premiums, plus retirement savings, plus education savings for kids.
Plus it is LCOL area, implying that there probably will not be many alternative $80k jobs if the one I had went away.
Many people in the town I lived in have accomplished all that you’ve listed. Also 80k is a single income — with dual income it’s low six figures. In a LCOL location it’s not bad.
Now their job market may not be hot but layoffs also rarely happen because these are industries that value stability (diversified multinationals but based in a LCOL location). Many folks in my former company have worked there for 30 years. Plus today, there’s the remote market. I think the scenarios your are imagining don’t apply as universally as one might think.
Our perspectives are often shaped by our immediate experiences. I have a data point that deviates from the experiences of most people on this site (that I suspect much of non-tech America shares)
Yes, dual income households in $120k to $180k range would work in a LCOL area.
Although, I would never be able to sleep at night if I was counting on depending on an employer for 30 years, not only to keep me employed, but to keep paying me competitive wages when they know I have no other options.
My biggest concern is price of quality goods and services like repairmen and elder care workers and whatnot greatly increasing by the time I am old (2050s) due to demographic changes. I foresee more and more old people bidding for the labor of fewer and fewer young people. And the government chipping away at the purchasing power of the dollar to address this (since that is the easiest and maybe only thing they can do).
Perhaps keep in mind that per capita income in this country is on the order of $25K and has been for decades. We can argue over the reasons or whether that number is artificially low, but once you get away from the coasts, a lot of this country is poor and that $80K would be life changing.
You can do all of that on less than $80k in a LCOL area. You might not be able to do all that and live a luxurious life, but that's a different thing entirely.
Out of pocket maximum for silver level HSA eligible health insurance is probably at least $5k if not $7k+. Premiums for a family of 4 are $30k, and if employer pays for 70%, then you are left with $10k.
$20k for federal/local takes. $80k-$20k-$10k is $50k. Max out HSA and 401k is ~$25k or more. $25k left, or roughly $2k/month left for mortgage/rent, food, utilities, car(s), vacations, etc.
Of course, you can not max 401k and HSA, but my opinion would be that is insufficient savings.
Joint tax rate for 80k is 12% federal, so half what you’ve listed for federal. Lcol is likely Tennessee or zero/low state taxes so less than 8k for sure.
Even if huge overestimates on taxes are correct, 2k/mo is achievable. <1k/mo for mortgage and $600 for food if you’re stringent, $400/mo for other expenses. All extremely dependent on being in a very low cost of living area, but 80k is ridiculously higher than a lot of people who live at $14k or 28k/ year if one or two people work at minimum wage.
It’s extremely unlikely they’re maxing 401k as well, most people I know who making 100+ don’t do that. So more realistically 80k, minus 12k for taxes, maybe 5k for health, maybe 5k for 401k, leaves you with 58k.
$30k annual premium is from my W-2 showing how much my gold HSA plan for a family of 4 costs with a $3,400 deductible and $7,250 oop max.
NJ has a nice pdf showing premiums and age rating factors, we can roughly estimate from there (lets use Horizon BCBSNJ Omnia Silver HSA as an example since BCBS is nationwide).
$325 per month per child, ~$500 per month per parent - $20k in premiums for a silver HSA plan in NJ, but this is has a $7k deductible and $14k out of pocket maximum. If an employer wanted to bring those deductible and oop max down, the premium would have to go up quite a bit.
So even in a lower cost of living state, I would estimate at least $25k/year in premiums for a half decent plan for 2 adults and 2 kids.
You are right that $20k in taxes might be high, but I was figuring income tax and 1% to 2% property taxes and maybe even tolls/vehicle registration/etc to be safe.
>It’s extremely unlikely they’re maxing 401k as well, most people I know who making 100+ don’t do that. So more realistically 80k, minus 12k for taxes, maybe 5k for health, maybe 5k for 401k, leaves you with 58k.
Yes, I assume 90% of Americans are not saving per my comfort levels.
I didn’t make enough to max out my 401k until I hit my 40s but always had a rainy day fund (8 month runway). I guess I lost the compounding for all those years but I still have enough.
As an immigrant I’ve always lived so close to the edge financially that I feel I don’t have the same expectations of most native born folks of what retirement looks like (I don’t plan to retire, but if I’m forced to I’m planning for 70s not 65). To me it just means I have to be hustling all the time. I don’t feel I’m hard done by or financially insecure though. I’ve lived with very little (I was technically below the poverty line in undergrad — I really stretched my dollar) and now I’m relatively comfortable but it’s all the same.
My parents were immigrants, and my expectations are because I saw them work 24/7 to barely scrape together a life for my younger sister and I. I was specifically told to be careful while playing, because a doctor or hospital visit would set the family back.
If I did not have kids, my comfort level would be a lot lower. But I feel like I decided to bring them into the world, and so I owe it to them to bed financially secure enough to provide them healthcare and my time.
Plus it is LCOL area, implying that there probably will not be many alternative $80k jobs if the one I had went away.