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View Diary: Making it work on $250k/yr (90 comments)

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  •  Think your math may be off... (2+ / 0-)
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    ferg, Be Skeptical

    If you're single making $250k/year, you're paying about $60k/year in federal income tax, $4.5k social security, and $3.5k medicare.

    I'd think being married would reduce income tax to more like $30-40k, with the Bush tax cuts still in effect.  Medicare would be the same and social security would double, so that's about $13k, which is pretty close to your estimate.

    That gives them about $15-20k more per year to work with.  

    With an income that high, odds are they've been saving for college for a while, so they will have been paying that $75k over the past 18 years.  Speaking of savings, they'll probably also have investment income, since they could actually have been saving that $75k/year, maxing out 401k contributions (Their income is high enough that they can't put money in a Roth IRA, and a normal IRA wouldn't be tax deferred).

    Or instead (Or in addition), they may have opted to get a 15- or 20-year mortgage, in which case, they may have the house paid off by now, or almost paid off, assuming they started paying with the first child, and have had relatively constant incomes (Admittedly, they may be making a lot more now than they were 20 years ago).

    Aging parents are certainly an issue - and retirement homes can be quite expensive, even for seniors who don't need nursing care.

    The fact is if you're making that kind of money, and you pace when you pay for major expenses, you have a lot of options, though you certainly still need to be careful.

    •  tried to use realistic estimates (2+ / 0-)
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      Flying Goat, Roger Fox

      You definitely make some good points.  Depending on past income and circumstances they may have accounted for these expenses years ago and planned for them accordingly.  Of course, many did not...

      Interest rates 10-15 years ago were way, way higher, so a shorter term mortgage would have sucked even more of their income than I show here, as I have used the much lower current rates.

      After their education and training, plenty of professional couples didn't start earning good salaries until they were close to 35 or 40 even.  When they had children, childcare could be very expensive.  

      As far as taxes go, there is obviously a wide range based on circumstances.  I looked at several sources, including this one.

       From PolitiFact: How much taxes do you really pay if you make $250,000/yr?

      I think we can agree that people earning that amount of money, though they may not be living the lush life,  have far more options than most Americans and should probably keep any complaints very quiet,

      •  That's for an individual, not couples (Which makes (0+ / 0-)

        a huge difference), and pretty much matches my number, though I didn't include payroll taxes, since when you say "I make $250k / year", you generally are excluding payroll taxes.

        You're definitely right about interest rates, though with that extra 75k over the years, they still could have pretty easily managed a 15 year mortgage.  Of course, there's also the deduction on mortgage interest, which would have helped.

        Clinton era taxes were a bit higher, too, especially for couples, so would have to tack that on to their income tax from 11+ years back, too.

      •  I know some top 2-3 percenters (1+ / 0-)
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        Be Skeptical

        They phonebank for candidates, etc.

        When I wasnt working and Occupy Wallstreet was new, I organized a food drive for Occupy Wallstreet in NJ. My 2-3%ers came thru every week.

        3 of them work in banking, in the Wall Street area, and would risk their jobs becoming involved, so I was like a cutout for them. I delivered 600 meals in 6 weeks, thanks to those 3%ers.

        Now of course I only hang out with liberals, anyway. So I have very little exposure to GOP 3%ers. LOL.

        FDR 9-23-33, "If we cannot do this one way, we will do it another way. But do it we will.

        by Roger Fox on Tue Dec 11, 2012 at 12:18:18 PM PST

        [ Parent ]

    •  & if you lose your job (2+ / 0-)
      Recommended by:
      Flying Goat, Be Skeptical

      and find yourself driving a limo or working at  Starbucks....and maybe losing your house ......

      A 250k earner has options yes, but they also have more in common with the median household earning 48k, than the 250k earner has in common with the 10-35 million earner.

      FDR 9-23-33, "If we cannot do this one way, we will do it another way. But do it we will.

      by Roger Fox on Tue Dec 11, 2012 at 12:22:51 PM PST

      [ Parent ]

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