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What $$$ would considered as a good annual income in your area?

OoohShiny

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Ooohshiny, I believe you are missing the point. Housing in New York and San Francisco, many parts of California, Chicago are extremely high, Making $200,000 is not going to get you very far in these areas of the US? My husband works for a British company and his peers located there are making over £100k a year.
That is a fair point - it's all well and good earning high sums of money, but if you have to spend it to live where you are working (or near to it) then you are ultimately no better off than someone earning half what you do but with half the size of living bills!

House prices in the UK are also a bit crazy in many places, especially in the cities and the south/south-east. London is a whole different ballgame (300 square feet studio apartment for £400k+, anyone? :-o) but even moving to a commuter town on a main railway line will see most struggle to buy a home. You are looking at around £200k for a new-build 300 square feet studio apartment with no parking and right in the middle of the town centre (so noisy and filled with rowdy drunk people during the evenings), and even a small two-bed terraced house would cost a quarter of a million or more.

On the average UK wage of £26500(ish) that would be almost 10x salary as a lone person, so if you haven't got a partner, you have virtually no hope of getting on the property ladder unless you have money in the family or have secured a high-paying job and stayed at the family home to save as much as you can. Meanwhile, it costs just as much, if not more, to rent a flat/apartment, or you can rent a double room in a shared house for perhaps £500/month, so it is incredibly difficult to save while also living independently.

As @nkarma notes, though, at least in the UK you have a healthcare system paid for by all that is free at the point of use. It's not working as well as it should, granted, and there is inevitably some waste in the system, but it means that one can go to Accident and Emergency with appendix pain, safe in the knowledge that you won't end up paying $50k+ for what is a routine operation. (That's a sweeping generalisation against the US healthcare system, which I freely admit I am not fully up-to-speed on, but hopefully you get my point! :) )
 

OoohShiny

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Oh I forget to add to the above (and it also references the below):

Hi,

DF asked what would be the income necessary for YOU to live comfortably in your area. I know in England there are many areas were you need a high income by any standards, but the average guy has much less income, as is true in the US. It is where we live.

In my area I would think $100,000 would do very well, but I doubt we have many people who are retired living on that. Depending on whether or not your home was paid off, I think you can live pretty well on $60,000 if your house is paid for. I live in the Midwest which is very different from NY or San Francisco.
Annette

I think a lot depends on the definition of comfortable. Is paying the mortgage each month comfortable? Is overpaying the mortgage comfortable? Is having perhaps £100 a month spare to spend on fun things comfortable? £200? £1000?

I'm not sure we'll reach a consensus in this thread :lol: but the discussion is interesting 8-)
 

nkarma

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I have to support what OoohShiny is saying. 1) The standards for comfortable will be defined very differently by country (likely much less in the UK due to expectations and the very large middle class). 2) You aren't going to find anybody but top executives making over £100k ($130USD) in London.

As a basis I live in London (most expensive city in UK) and I lived in San Francisco, CA (most expensive city in US) before that for 7 yrs until 2013 (where most of my friends and family live now). I'm very much comparing Apples to Apples here in that the average home price will be about the same and so are most other living costs /things you would buy.

I think there are many intricacies in why responses would vary greatly if you asked professional middle class eduacated people about what comfortable means in those cities. I have and general consensus in bay area is over $400k for a 4 person family and around $150k for 4 person family in London.

Sorry didn't mean to sway this into a UK v US chat - I know DF wants to know about US which will vary greatly by the region. I was just having this chat with friends the other day and never thought about all the savings one must need in the US in case a lot of things happen or so you can take maternity leave. Also, you need to buy your way into good education in the US.
 
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Calliecake

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That is a fair point - it's all well and good earning high sums of money, but if you have to spend it to live where you are working (or near to it) then you are ultimately no better off than someone earning half what you do but with half the size of living bills!

House prices in the UK are also a bit crazy in many places, especially in the cities and the south/south-east. London is a whole different ballgame (300 square feet studio apartment for £400k+, anyone? :-o) but even moving to a commuter town on a main railway line will see most struggle to buy a home. You are looking at around £200k for a new-build 300 square feet studio apartment with no parking and right in the middle of the town centre (so noisy and filled with rowdy drunk people during the evenings), and even a small two-bed terraced house would cost a quarter of a million or more.

On the average UK wage of £26500(ish) that would be almost 10x salary as a lone person, so if you haven't got a partner, you have virtually no hope of getting on the property ladder unless you have money in the family or have secured a high-paying job and stayed at the family home to save as much as you can. Meanwhile, it costs just as much, if not more, to rent a flat/apartment, or you can rent a double room in a shared house for perhaps £500/month, so it is incredibly difficult to save while also living independently.

As @nkarma notes, though, at least in the UK you have a healthcare system paid for by all that is free at the point of use. It's not working as well as it should, granted, and there is inevitably some waste in the system, but it means that one can go to Accident and Emergency with appendix pain, safe in the knowledge that you won't end up paying $50k+ for what is a routine operation. (That's a sweeping generalisation against the US healthcare system, which I freely admit I am not fully up-to-speed on, but hopefully you get my point! :) )

My husband works with people in London. So everything you said about how much it costs to live there makes.. Dear friends of ours lived there and they complained all the time about how expensive it was to live in London .
 

lyra

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I think I misunderstood the question. I responded with what it would take to live *comfortably*. Unfortunately, we do not live comfortably ourselves. We downsized, so our house is of a limited value, lower than most surrounding areas. Our cars are old. Our mortgage is still a reality due to job losses and precarious employment issues which are ongoing in my husband's field. We are kind of stuck where we are, in a housing bubble.
 

TooPatient

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The average in our city is $150,000/year. If I remember correctly, more than 75% of homes are more than $100,000 and more than 25% are $250,000+ (incomes)

"Low income" condos are available to people making under $80,000/year.

$150,000 is okay. $100,000 just barely makes it.
 

LLJsmom

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This question made me look this info up. My town. Median home price $1.5MM. One town south. $2MM. Two towns south $4.2MM. one town north $900k. $400K. would probably allow vacation, retirement saving, college saving and maybe private school depending on the school. This assumes this is earned income which is taxed at the highest rate and not long term cap gains and dividends which are taxed at lower rates.

$400k, assume maxing out 401k contribution, $364k taxable after tax would be $200,200, highest fed rate, SS tax , Medicare, CA tax rate. $16.683 per month before health insurance. Mortgage $4k, prop tax $2k, college savings for two kids, $2k (too little), home and life insurance $2k, health insurance and medical costs $2k, leaves you $4683 before car payments, food, transportation, gas, utilities, for a family of 4. This budget does not include private school for kids. No daily childcare if you have two working parents, which would be about $2500-$3000 per month if you have 5 and under children. No ballet, piano, sports. Not retirement savings other than 401k. No savings for vacation. No charitable contribution. No Costco or Target runs. No home repairs. Geez. This is depressing...
 
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Elizabeth35

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Highly variable---even within a country/geographical area.
First--- in the Chicago area (for an example) are you living in Winnetka or are you living in Joliet. Worlds apart both geographically and housing price-wise.
Secondly--"living well". Again huge variance. You use the example of retired and no kids. Is your home paid for? How much do you spend on eating out, clothing, cleaning service, yard service, vacations, etc. Do you own your cars or lease? What is your cost for health insurance/care? What percent do you give to charity or to help others? Do you feel a $20K car is fine or do you "need" an $80K car? Do you or your spouse feel is is imperative to have a $1500-2000 handbag? What else is being comfortable to you--vacation home or a boat?

What is your net worth? Net worth is a more important indicator than income in my opinion.
We cook at home and eat finer meals than most restaurants. We do our own cleaning and yard work. We own our vehicles and maintain them.
With that savings---we spend $20-30K annually on travel. We can afford it because we make choices.
And everyone will make different choices--based on their priorities. If it is important to you to own a new car every 3 years or eat out 10 times per week--go for it. If you choose to spend 10% of your annual income on bling--good for you!

It's all about personal preference. Living well is way too variable to place a number on it. Completely depends on what your personal values indicate as well as your net worth. The only time I like using income comparatives is when assessing how many hours work it takes to pay for a desired item. As in, is it worth working X hours to pay someone to mow my lawn, paint my living room, pay for dinner out, etc.
Even housing prices in your area may be not so relative if you have the net worth to not have a mortgage.

Remember---want what you have;-)
 

TooPatient

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I think mortgage is a big factor here too.

We bought a "cheap" house but our mortgage is still $2500/ month (had been $3500/month). Most others are double that or more!


ETA: big difference also between net and gross. Taxes can be a big chunk....
 
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whitewave

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In my area 100k salary plus a 3 bedroom 2 bath house for $140,000 would be considered living well. On average. Given plenty of people rent single wide trailer homes on land.
 

AprilBaby

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Yes I live between Winnetka and Joliet outside of Chicago. Homes here run $250,000-3 million. Comfortable retirement to afford the taxes would be at least $200,000/year. My house is in the mid to lower range.
 

Dancing Fire

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Sorry didn't mean to sway this into a UK v US chat - I know DF wants to know about US which will vary greatly by the region. I was just having this chat with friends the other day and never thought about all the savings one must need in the US in case a lot of things happen or so you can take maternity leave. Also, you need to buy your way into good education in the US.
Love to hear from PSers around the globe. Where are the PSers from HK? I know it is very expensive to live there. The housing prices in HK is unbelieveable:!:
 

Karl_K

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hmm ok... 2 people retired decent living
Rent 650 a month for 2 bedroom or nicer 1 bedroom. Tax and insurance on an average house runs $4000 a year and add $120 a month water sewage and garbage. 80k-120k will get a nice, not updated 2-3 bedroom house. A livable 2 bedroom house can be had for 50k in a reasonably decent area.
150 for gas and electric, year round average higher in summer for AC.
say 70 for 2 cell phones
car insurance: say $50 per car
food $300
cable and internet $100
gas for car $25
...............................................
$1345 a month.
$150 supplemental medicare insurance/ and or co-pays
..........
$1495
Realistically 1800 a month where you factor in a car either payment or repairs/up keep and other expenses.
 
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wetsawblade

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Retired with no kids. How much with it cost to live comfortably in your area?
How much do you make? You ask questions, but don't provide comparable answers. I'm asking you directly b/c I know the restaurant supply business and more pertinent, I have a student at UCDSVM. I think you once said you were a numismatist? If so, I have questions for you! Would you be able to share some practical advice re: coins? I have lots & I'd love some education.
 
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lovedogs

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Not sure about "comfortable", but just looked up data for my city, and median income is 61K, median house price is $317K for whatever that's worth. My city is interesting though, because there is a pretty big difference between the higher vs. lower ends in terms of neighborhoods, and it's a smaller city than others in CA. So my guess is that in my neighborhood those numbers are different (and in each neighborhood it likely varies widely).
 

Dancing Fire

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How much do you make? You ask questions, but don't provide comparable answers. I'm asking you directly b/c I know the restaurant supply business and more pertinent, I have a student at UCDSVM. I think you once said you were a numismatist? If so, I have questions for you! Would you be able to share some practical advice re: coins? I have lots & I'd love some education.
Then you should join one of the coin forums...:)
 

monarch64

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There is a really wide range of what would be considered "comfortable" where I live. Bloomington is home to Indiana University, Cook Pharmica, Baxter, Biomedix, TASUS, etc. Crane Naval Base is closeby and we are a bedroom community to many who work there. So we have a smaller middle class, with working poor on one end of the spectrum and wealthy, upper middle class on the other. Rent and housing prices here are INSANE. If I had the means to buy right now, I would, regardless of the market, because I am paying (renting) the equivalent of a mortgage payment on a $175k house that by most standards is teeny tiny. There are 8k beds downtown, going for $900/bedroom in rent on average. Everything, over the years, has been turned into student housing. It is fascinating to watch students from the East coast around town. They typically drive very expensive luxury cars, and there is actually an auction that takes place every summer when they abandon said cars outright at the airport. Yes, they literally drive them here from out of state, and leave them here (abandoned) when they go home for the summer or graduate.

I would say one person could live here comfortably, without children, on a salary of 60-75k. A family of 3-4? $175-200k minimum. The schools are very good, everyone wants to raise children here, and real estate is just hard to come by for a good price unless you're willing to renovate or buy land and live far out on the outskirts of town, or in a bordering county.
 

Slickk

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Median income of my town is $98,000 and median house is $400k In the NYC suburbs. A couple of towns over and you're upwards to $2 million plus for a home. Real estate taxes are prohibitive for retirees in my opinion. My mortgage will be paid off next month (woo hoo!) and I'll still need upward of $15k just for real estate taxes.
Interesting reading here, as I would love to leave this area but my kids live and work in NYC so I think I have to stay.
 

Dancing Fire

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madelise

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Maybe like $75K???

No way. That's teacher salary. I just shared that a combined household income of $250k was the threshold suggested for housing assistance. http://sanfrancisco.cbslocal.com/20...-subsidized-housing-under-new-palo-alto-plan/


$75k here doesn't get you jack sh!t. It costs almost $50k a year in rent for a 2BR apartment. $30k a year for childcare/daycare before a child qualifies for public education at the age of 4-5 for kindergarten.

Where in NorCal do you think $75K would be "good"? I think that is "enough" for a single person without children, without any loans to pay off. Take home would be $53K after taxes. And almost 100% of that would just go into housing.
 

madelise

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DF, where do you live? Sacramento?
 

Dancing Fire

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acebruin

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That's because a lot of people from SF are moving there to buy a house. Lol I have several friends who did that.
 

madelise

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Yes, $75K here is pretty good income. Housing here is getting too expensive.

So wouldn't your requirements for a solid income increase to commensurate the housing costs?

Wait, is the "yes" for Sacramento?
 

madelise

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I found this celebratory post that went viral went rent prices decreased for a short period of time last fall. Lol.

IMG_1821.JPG
 

mrs-b

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OoohShiny, yes, the question posed by DF was all about personal expectations of what a "good" income in our area is. If I interpreted the question correctly- and clarification was asked for in any case to see exactly what DF meant.

We worked very hard to get where we are in life and super grateful for everything and realize that not everyone had the same advantages we did starting out. We never take anything for granted and truly appreciate all the good fortune we had and worked as hard as we could to have a "good" life. And always appreciative of the advantages we had as well.

In the area we live (and the amount of money you need varies wildly depending on the area in which you live) the numbers I shared are not crazy or out of bounds by any means. If you are earning the national "average" you cannot live here comfortably. Comparing one state and city to another is like comparing apples to bicycles.

In any case, no matter what, it is critically important (to us) for us to keep giving back which we do generously with time and money and effort. In many different ways.

And believe it or not these numbers posed here don't qualify those who are earning them the top 1% status...just saying.

Hi Missy :)

I just looked up *this* article:

http://www.businessinsider.com/inco...-1-in-the-most-expensive-us-cities-2016-4/#-1

It's a year old, but inflation has been almost -zero- in the last 12 months, so I'm just gonna go with these figures.

NYC has the highest required income to be both in the top 5% and top 1% of income earners in its area (you'll see the article looks at the 12 most expensive cities in the US). 250k will get you into the top 5%. So I just wondered if you lived out of the US? I had always had you pegged for a US girl, but 250k, even in NY, would get you into the top 5%. So now I'm just wondering if you live in one of the uber-expensive countries (think: Switzerland. By the way - funny story re Switzerland. The first time my husband and I were there for business we caught a cab to dinner, not knowing the area. At the end of the ride, it had cost us $18...and we could still see the place where we'd been picked up!! Now THAT'S expensive!)

I live in Boston, which came in at 3rd highest required income to reach the top 1%, not far behind San Francisco, but still 80k behind NYC. Percentage-wise, Boston requires more than double the top 5% wage to get into the top 1% wage. I suspect it's to allow for all the finance/insurance industries in Boston, which can generate some very big money indeed.

Anyway, anything above 50% represents a 'better than average annual income'. For these sorts of stats, city-data.com is your best bet. Apparently, despite it's super high 5% and 1% levels, the mean HOUSEHOLD salary in Boston was....$58,263. It's a bit over 70k for MA in general.

So all that to say - numbers are very deceiving. My idea of 'good' would be in the top 25%, and since these things increase exponentially, I'm guessing that's somewhere in the 100k+ region, because in any city, there's a whole lot of people NOT working in the finance industry (or any of the other high earning industries), so the numbers are skewed and affected by outliers.

I think we (for 'we' read 'me'!) tend to compare on the basis of who we are and what we want - not what's actually out there. Either way, I think top 25% normally works as 'good' - in that 75% of the population in one's area would probably like to have what that 25% has! I think being in the top 5% is setting the bar too high just to qualify as comparatively 'good'.

Random thoughts, stats and links..... :)
 
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