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Neighbors Are Retiring in Their 30s. Why Can't You?

nytimes.com

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Re: Neighbors Are Retiring in Their 30s. Why Can't You?

#31

Post by r0ckarong »

foogazi wrote: post #10
nostromo wrote: post #6

> [she] retired at 49 with $1.3 million in savings. That doesn't not seem like nearly enough. How does she afford health insurance? I would be terrified that after a prolonged downturn you'd be left with nothing. And Social Security in the US pays less the less you work.

> I would be terrified that after a prolonged downturn you'd be left with nothing. In the long run we are all dead > And Social Security in the US pays less the less you work. Aren't there diminishing returns with Social Security ? so at some cutoff you are NOT getting more regardless of how much more you work

> In the long run we are all dead

Arguably, being left alive with nothing is worse than dead.

Re: Neighbors Are Retiring in Their 30s. Why Can't You?

#32

Post by r0ckarong »

JumpCrisscross wrote: post #26
dmichulke wrote: post #22

Earlier quoted context omitted.

> at $300-400k in college tuition I always wonder why it doesn't make sense to just have them learn German or French and then have them study in continental Europe. Living standard is the same, tuition cost is mostly non-existent and living abroad, if just for a year, will make you a better person. Total cost for a bachelor + master is maybe 5 years with a cost of 1.5k per month maximum (this is considered rich for s…

> learn German or French and then have them study in continental Europe. Living standard is the same If you’re in a position to do this, the median European living standard is a huge step down. (You’ll also need to do extra work to make up for the network degradation.)

> the median European living standard

Care to elaborate? What is so significantly better in the US?

Re: Neighbors Are Retiring in Their 30s. Why Can't You?

#33

Post by devbent »

gnicholas wrote: post #18
rokkitmensch wrote: post #16

Don't have kids! Easy, done.

This surely helps. Until your kids are 5 or so, you don't know if you'll have huge birth-related medical bills, unexpected disabilities/chronic illnesses, or special needs that require moving to an expensive school district. And even assuming everything is good on that front, you're still looking at $300-400k in college tuition (in 2024 dollars) if you let your kids pick any school. You can tell them that you can onl…

> And even assuming everything is good on that front, you're still looking at $300-400k in college tuition (in 2024 dollars) if you let your kids pick any school.

When people ask if I want a second kid I reply that my current child costs me around 64k a year and I cannot afford a second!

28k for a neighborhood daycare, 36k for college savings, and that is baseline before anything else.

College tuition is obscene.

Re: Neighbors Are Retiring in Their 30s. Why Can't You?

#34

Post by saxonww »

foogazi wrote: post #10
nostromo wrote: post #6

> [she] retired at 49 with $1.3 million in savings. That doesn't not seem like nearly enough. How does she afford health insurance? I would be terrified that after a prolonged downturn you'd be left with nothing. And Social Security in the US pays less the less you work.

> I would be terrified that after a prolonged downturn you'd be left with nothing. In the long run we are all dead > And Social Security in the US pays less the less you work. Aren't there diminishing returns with Social Security ? so at some cutoff you are NOT getting more regardless of how much more you work

There is a maximum. It's also the case that your social security income is capped, too. I think that a person earning a million dollars a year for 35 years doesn't look any different to social security than someone earning 200k a year for 35 years, because both are well over the income cap.

I haven't read any of the FIRE stuff, but I wonder if it ignores social security. I'd argue that you can't say you're Financially Independent if your early retirement planning is dependent on social security; it's your money (...right), but there are rules around it, and those rules change.

Re: Neighbors Are Retiring in Their 30s. Why Can't You?

#35

Post by esafak »

citizen_friend wrote: post #20
nostromo wrote: post #6

> [she] retired at 49 with $1.3 million in savings. That doesn't not seem like nearly enough. How does she afford health insurance? I would be terrified that after a prolonged downturn you'd be left with nothing. And Social Security in the US pays less the less you work.

The emotions are no different at age 60 with 5 million.

I don't believe you. Are you expecting to live to 100?

Re: Neighbors Are Retiring in Their 30s. Why Can't You?

#36

Post by bloqs »

ipnon wrote: post #4

It's interesting to me how the mainstream news organizations are supposed to be synthesizing a constant stream of the latest and most important information, and yet breaking news happens faster on social media and the think pieces, such as this one, are basically rehashes of Reddit comments from 10 years ago.

Couldnt have put it better myself, and most of the journalists are millenials now so frequently thats a real thing

Re: Neighbors Are Retiring in Their 30s. Why Can't You?

#37

Post by wskinner »

al_borland wrote: post #19
wskinner wrote: post #8

Earlier quoted context omitted.

"Enough" is a function of how much you have and how much you need. 25x annual spend is a common heuristic for the required net worth before you can safely retire. And the older you are, the less margin of safety you need. 4% of $1.3 million is $52k, which is enough to live quite comfortably in many places.

A bad year or two in the market early in retirement can really change that calculation if they aren’t accounting for sequence-of-returns risk.

The 4% rule of thumb is intended to include sequence-of-returns risk. See e.g. https://firecalc.com/, a tool commonly used to aid these decisions.

Re: Neighbors Are Retiring in Their 30s. Why Can't You?

#38

Post by secabeen »

devbent wrote: post #29
citizen_friend wrote: post #23

Earlier quoted context omitted.

> $300-400k in college tuition This is a ridiculous exaggeration.

> This is a ridiculous exaggeration. No it is not. Given the current tuition rates of state colleges, and factoring the average increases in tuition over the past 10-15 years, it is expected that public universities will have an average 4 year tuition of over 300k in 18 years. Note that some private universities are already at this price!

Yes, it is. See pg 18 here: https://research.collegeboard.org/media/pdf/Trends%20Report%...

Actual tuition and fees paid have dropped in real dollars over the last 20 years. Nameplate tuition is meaningless as the average student pays less than $5,000 in tuition at 4-year public schools. The average student gets more than $8k in grants. Room and board remains high, but still nothing near 300k.

If you have citations supporting your 300k claim, I'd like to see it. Note that I'm looking for actual tuition net of grant-based financial aid for middle class families, not what out-of-state multi-millionaire families pay.

Re: Neighbors Are Retiring in Their 30s. Why Can't You?

#39

Post by supportengineer »

citizen_friend wrote: post #23
gnicholas wrote: post #18

Earlier quoted context omitted.

This surely helps. Until your kids are 5 or so, you don't know if you'll have huge birth-related medical bills, unexpected disabilities/chronic illnesses, or special needs that require moving to an expensive school district. And even assuming everything is good on that front, you're still looking at $300-400k in college tuition (in 2024 dollars) if you let your kids pick any school. You can tell them that you can onl…

> $300-400k in college tuition This is a ridiculous exaggeration.

Over four years this is accurate

Re: Neighbors Are Retiring in Their 30s. Why Can't You?

#40

Post by meowfly »

bombcar wrote: post #27
gnicholas wrote: post #9

> recommended employing your children starting from the age they are able to do household chores, which offers a double benefit of reducing a parent’s taxable income while building an investment-accruing tax shelter for the 7-year-old In case anyone was wondering, you cannot reduce your taxable income by paying your child to clean your house (I am a former tax lawyer). Could you pay your teenager to work for your com…

The main goal with the “hire children” discussions I’ve seen is to lodge taxable income to the child so you can start investment/retirement accounts. But there are other ways to do the same thing.

Yeah. I've always heard this as: make your child a board member and then have them put their money in a Roth. No idea if that's an easy path to an audit
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