Don’t forget that in retirement, you won’t be seeing SS or Medicare deductions, so that should reduce your post retirement cash needs to replicate current expenses.
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I had a pretty good start coming out of college with no debt and enough in savings that with the signing bonus from my first job had more than enough to pay cash for a new car. This set things up pretty well for getting a down payment into a house early enough in the 2000s to avoid a big bust in 2009, which then let me take advantage of buying into a much bigger house in 2010, all in a relatively low COL area.
So I would say there is a bit of luck in all of that, but also making reasonable choices that allowed for some financial flexibility along the way. Not spending to the max on either houses or cars is a big piece of that.
I actually did not put anything more into my 401k than required to get the match up until my late 30s…at that point the two percentages were not much different. I did max out Roth contributions as long as I qualified. The early start on all this was important.
Is that something that would have been forbidden in the past (with Single Family Home zoning)?
Had the same - full scholarship. I feel daily the privilege that has given me. I also began saving heavily early on. Threw much of my first several paychecks as an EL into a Roth IRA until I maxed it that year.
That said, if I had not gotten decent scholarships I would have lived at home and gone to 2 years of community college. With how much I worked during college and looking at tuition for my uni, I probably would have taken less than $50k in debt (accounting for rent and food). Some back of envelope math, counting my during-college job, summer jobs earlier on, and internship later, I made somewhere over $30k during college.
But any debt makes it harder. I feel for people who took out $100k+. Especially the ones who were like, going only for a Bachelor’s of Psychology…
I went out to SSA and looked at my earnings during college…looking at tax years that split academic years, 6k, 13k, 23k. Maybe another 8k the year I graduated before going full time, so nearly +50k while in college, before taxes. I assume I put whatever I could in a Roth, but probably had 20k in my checking account when I graduated.
Yes, I feel very fortunate for this, and feel for people who come out with a lot of debt and not terribly valuable degrees. I think the college system just started breaking as I was going through it…my school started building all sort of new state of the art facilities and kept going after that.
But in all it was a huge financial head start.
Oh, I forgot to add in selling my plasma for 3 years. About 10-12 weeks per semester * 6 semesters * about $240/month =
… Damn. I was selling my body for peanuts. Felt like a lot of money at the time, and it wasn’t hard. I have 2 permanent scars on the inside of my elbows.
That $240 was almost perfectly my portion of rent in a 6-person apartment, though.
Not only that but medical insurance premiums are greatly reduced once you are eligible for Mediciare - further reducing expense and associated income required
I think many of us are in the same income bracket. In this hypothetical example - 35% of each paycheck goes to taxes, 10% to 401k, 5% to health/life/dental, the other 50% hits the ole bank account)
In retirement you won’t be contributing to your 401k and taxes will probably be cut in half or more
I think it will be easy living off 80% of your pre retirement income, even with health insurance making up a larger percentage of your cost outlay
If you save additional dollars outside of your 401k (brokerage, HSA, IRA, life insurance) then theoretically you can live on even less
I think I can get away with less than 70% until age 65. After 65, I think 60% will do when I can trade out my family’s marketplace ACA plan for med supp (wife and I are same age, how convenient)
No, lane-houses have been permitted for some time in Vancouver. They are considered as part of the main dwelling even though they are physically separate. That is, you can not sell the lane-house separately from your house nor can you consider it as part of a strata.
In November 2023 the permitted square footage of a lane-house increased and there are expectations that they will become severable. I am considering a two bedroom lane-house with about 1000’ of living space. It may or may not have a garage as those are not in demand. I may build a separate carport for my wife’s car as we would need to demolish or convert our existing garage to build the lane-house.
I have never been involved in the building of a house so I am kind of excited by observing that process.
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I don’t feel bad for people with student loans at all
Community college is super cheap, most large national employers will pay $5000 a year for school - this should help cover community college tuition while you work
I was on a track scholarship but I still worked during the summer. I wish I was more passionate about investing then. The desire to invest and retire was not stoked until I got my first desk job after college. I was so bored that I started googled “how to retire asap” and began reading bogleheads and mmm like crazy
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You make several good points…i think the conclusion is that usual income replacement ratios do not make sense for the high incomes that most of us have. When i look at my own situation, once the house is covered, i don’t spend much more than the ~3500 a month social security would provide, at least on usual monthly expenses. So retirement savings pays for cars, vacations, large expenses, and medical insurance until Medicare hits.
I need to get kids through college yet, that’s nearly 10 years off until they are done. After that, i can probably live off investment income, assuming my house is paid off.
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There is a cohort of students i feel bad for… those that graduated around the Financial crisis. They signed on while costs were going up like crazy before it was realized that not every degree was worth 100k.
I don’t feel bad for recent students who saw all this happen and still chose to take out huge loans for fluff degrees.
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Added goal - should be attainable by the end of this year to be a half-millionaire.
Not counting home equity nor subtracting home debt (the balance would be significantly toward equity). Primarily via 401k/IRA/non-retirement brokerage, adding HSAs and bank accounts - unless next year is pretty bad in the market, being a half-millionaire should be doable by year-end.
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Pretty much the same as last year for me. Will list goals below as household goals.
- Max 401ks - total: ~$71k (including company matches/profit shares)
- Max HSAs - total: $8,300
- Add to brokerage - total: $18k-$24k (100% of this intended to be used as down payment in 2-3 years)
- Get married - total: ~$5k (non-traditional wedding of ~10 people)
- Build pergola (any tips Rast?
) - International trip as honeymoon - leaning towards Scotland/Ireland right now. Need to get that planned/booked ASAP
- Maintain charitable contributions
- Any leftover/meaningful cash leftover will get put in to our brokerage(s) for future down payment.
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If I were to renovate my modest master bathroom (i.e. turn the wallpapered walls into tile, replace the tub, replace the sink, leave the floor which is already tile) what’s a reasonable kind of estimate I should be thinking? Are we talking 5-10k? 10-20k? 40k?
Similarly, when we first moved into the house the inspector made us aware that the HVAC unit is too small for the house, which has undergone a couple additions since it was first built. Any sense of a ballpark number around what it costs to go from a small HVAC to a more medium sized HVAC? (my house isn’t that big, but it’s not tiny either).
How do you define “fluff degrees”?
STEM education can give you earning potential, but its also somewhat unbalanced as it pertains to understanding how people actually function in
society.
Far to many STEM-educated libertarians running around these days (in tech specially), which usually leads to poor outcomes.
Not sure if there are any other posters with farming roots here, but I have made the decision to sell my Ontario farm in 2024. My Grandpa Cooke originally bought the property in 1915 so the decision was difficult for sentimental reasons.
Agricultural land has soared in value in the past 20 years and will probably continue to do fairly well but my kids would benefit from receiving the sale proceeds to enable prepayments on their respective home mortgages. Part of the farm is woodland and wetland so I will sever that part and donate it to a conservancy trust to help mitigate the capital gains tax on the sale of the remaining agricultural land.
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Just curious, but in Canada does Agricultural land also have large tax advantages?
In the UK, it has been soaring in value because of that reason (investors buying it up and large landowners looking to minimise inheritance tax bill).
I think a degree should be chosen with some sort of career in mind. If someone goes and gets a degree just to have one, it is a fluff degree.
Lots of correlations on the STEM comment.
Fair enough.
I do think though that “lack of degree” is unfortunately a big problem for employment.
The inherent problem is that many people do not “know” what they want to study as a career at 18 years of age. They still have a lot of growing up to do at that age.
I find the US a bit better vs the UK system as it allows you to wait up to 3 years at University before declaring a major. In the UK, you have no option of this which creates problems later on (masses of students who end up studying something they end up actively disliking).
Remodel costs vary widely by location and what kind of finish you’re after. And whether you hire a GC to do it all or if you are the GC and hire individual trades. It sounds like you aren’t re-locating any fixtures, so minimal electrical and plumbing, though it will take a plumber close to a day to remove the tub and swap in a new one. Tiling the walls will cost you, especially if you also want that tile in the shower as that requires a lot of prep work to waterproof the walls. I’d start talking to some contractors, but unless you’re in NYC or the bay area, I bet you could get it done for around $20k depending on materials and how hot the market is. If you want a GC to do it all turn-key more like $30k, maybe even more.
I gutted a master bath last year, doubled the size, and went pretty nuts on the whole thing. Honed marble, quarter-sawn oak everywhere, solid brass everything, push-button light switches, stained glass, soapstone, bidet seat thing, Toto toilet. I was my own GC and did demo and paint, and I spent $42k. But I’m also in Kansas. I posted pics in the Home Improvement thread. Saved a ton of money but I did a load of legwork on it.
HVAC also varies by location and the size of the unit. Again assuming you aren’t in a HCOL area, let’s say a four ton system. You could probably get cheap equipment for like $10k or even less - 80% gas furnace and a 14 SEER2 AC. I’d get three quotes but plan on more like $15k or $20k if you want energy efficiency. There’s a $2k tax credit if you get a heat pump (subject to income caps). Last October I dropped $23k on an 18 SEER2 heat pump with a 97% efficient gas furnace backup, high-end Bryant equipment and my unit is five tons, oof.
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