Ask HN: Net worth of software engineer at retirement? • Hacker News Board

Re: Ask HN: Net worth of software engineer at retirement?

#21

Post by krishanath » Tue, Jul 24, 2018, 3:04 PM UTC

greenyoda wrote: post #2

Your tax estimate seems low. Remember that on top of federal tax, there's California income tax, which could hit 10% if you're single[1] (assuming most Google and Facebook employees are in California), plus real estate tax if you own a house. If you have significant income/gains from your investments, that could push you into a higher tax bracket. Also, your monthly expenses could be significantly higher if you have…

S&P 500 actually returned 10% between 1988 and 2018. If you invested $10K in S&P 500 in 1988 it would be worth $205K today. If you use a compound interest calculator you can see this corresponds to 10% growth per year.

Re: Ask HN: Net worth of software engineer at retirement?

#22

Post by krishanath » Tue, Jul 24, 2018, 3:10 PM UTC

segmondy wrote: post #13

Assume $5k in monthly expenses? The typical Google or Facebook engineer lives in the Bay area where rent goes for $5k. Tax is not 25%. California and Fed tax is more like 45%. Stop this rubbish. If you are going to answer this at least make it realistic.

If you buy a house that's an investment, not an expenditure, so it is not included in monthly expenses. 45% is your marginal tax rate, not effective tax rate.

Re: Ask HN: Net worth of software engineer at retirement?

#23

Post by LUmBULtERA » Tue, Jul 24, 2018, 3:16 PM UTC

There is a lot of pessimism here, and some of your estimates (such as taxes) may (or may not!) be a little off.. but achieving something well north of $2 million by 55 is very attainable based on an income of $250k/year. This is why early retirement blogs have grown in popularity in the last 10 years -- many of us in these kinds of situations are more interested in living frugally (I spend much less than $5k/month), saving and investing a huge percentage of income and then retiring after perhaps 10-15 years of work.

Re: Ask HN: Net worth of software engineer at retirement?

#24

Post by krishanath » Tue, Jul 24, 2018, 3:18 PM UTC

I noticed many people have found flaws in my assumptions and estimates, but nobody wants to post an alternative estimate?

Even if you increase taxes to 40% (in reality even in CA the effective tax rate as opposed to marginal is not that high) and increase expenses to $7K per month (excluding housing), the final net worth still falls in the range I estimated, i.e., north of $7 Million.

Any Facebook or Google engineer reading this, how much do you expect to have when you retire?