You have to save for a 3 thousand dollar vacation, right?

[lauradis]

Balance is important - but if you reach 60 to retire and die at 67, you'll probably want more than your social security check - just getting from 60 to 67 will be expensive (specifically since you can't get benefits until 62, and if you take them then they are significantly reduced.)

You could get hit by a truck and die tomorrow, but even if that were to happen, you'd probably want to make sure your spouse and kids (assuming you had them) had something financial left behind - in addition to memories - and most of us live our lives assuming we won't die tomorrow.

Not everyone gets full ss check, lots of state and local government works pay full amt in but never receive full amt out. Ins thru group union like police and fire get 1/2 price ins when they retire even before magic age of 62.

Hit by a truck is what life ins is for.

Always plan to never die but live like its your last years.

This is one of those whatever threads, hey op did any one answer your ??

 

[littleelf]

Our first trip was $800 (Just DH and myself for 2 nights) and that was paid by our tax return, we typically get $6,000 per year.

If you are getting a $6000 refund every year, you should seriously think about adjusting your withholding. It might feel nice to get that big chunk each year but you're just letting the government borrow it for the rest of the year. You could have an extra $100+ every week instead.

 

[disney4us2002]

I'm not sure what the point of this thread was; however, we have had a kid in college since 2007 and the last is getting ready to head off next fall. Dh & I dream about what we will be able to save after the $3000 per month isn't going to higher education loans. It's kinda crazy to think we could actually save that amount every month and after just one year have one hell of a saving acct to take an insanely expensive vacation - probably Europe and a long Mediterranean cruise. I can only hope and pray that our health and jobs hold out so long....oh, and none of our children have to return home without jobs. Things can change in a heartbeat and five years seems a long way off (although I know that time truly flies the older I get, lol)!

 

[disney4us2002]

That is very well put! Yes saving for the future is important. But you have to live for the moment as well! We do save for the future, but also spend now for experiences. We have a lot crossed off our bucket list by 30. Worked overtime, and did without in other areas to have been able to go to Europe this past summer. Great to say we did it, rather then say I wish we would have!

AMEN!! I often think of my parents in these situations. My parents had insurance and big plans. If my father, a smoker for years, were to become ill or disabled, everything would be paid off. Quite a shock when my mother was diagnosed with cancer and died before they could retire, enjoy any real vacations, spend any savings, etc. Life is unpredictable. Do not ONLY save for a future that is not guaranteed to any of us!

 

[QVCshopper]

I'm all about saving. Look at it this way. Woman Y goes into coffee shop and picks up a $3 latte. Woman X goes into the same coffee shop and uses a birthday coupon and gets the same latte for free. Multiply that over and over and you're talking about lots of money over the long term. So many people "don't have time for coupons." Phooey. Then don't complain to me about money.

I hear about ladies who spend $150-200 on hair every six to eight weeks. I spend maybe $15 maybe one to two times a year on my hair. Do they have better looking hair? Of course. Do I care enough to spend the type of money they do? No siree.

BUT, I want to live my life, too. I want to make memories with my family while the kids are young. I've seen a lot of illness and death lately and it's so awful. So, it's all about making choices and doing the most that you want to do with what you have.

The two million dollar figure is interesting for retirement. I'm not sure we can get there after paying for college, but we will see.

 

[dawnball]

I'm all about saving. Look at it this way. Woman Y goes into coffee shop and picks up a $3 latte. Woman X goes into the same coffee shop and uses a birthday coupon and gets the same latte for free. Multiply that over and over and you're talking about lots of money over the long term.

Apparently I need to figure out how to have more birthdays...

 

[mrodgers]

The average US worker makes around 50K give or take. If both work, that is just over 100K. A person making 40K looks at that figure and thinks, they would have all their problems solved if only they had that much. But guess what? When you have more money, you shop at nicer clothing stores, you stay in the nicer hotels, buy nicers cars, walk past store brands at the grocery, etc etc etc....

Our consumption is relative to our income.

The more we make, the more we spend. In fact, we tend to always spend JUST over what we make.

The average US worker doesn't make $50k in the US. $50k is the median income of a household in the US. You can't look at is as average because average gets skewed by the 1% of the extremely high incomes.

If you have 10 people, 9 who make $50k and 1 that makes $1M, the average income is $145k. Not very representative of what those 10 people are making in income.

Households making $100k income is definitely not the norm.

 

[Colleen27]

The average US worker doesn't make $50k in the US. $50k is the median income of a household in the US. You can't look at is as average because average gets skewed by the 1% of the extremely high incomes.

If you have 10 people, 9 who make $50k and 1 that makes $1M, the average income is $145k. Not very representative of what those 10 people are making in income.

Households making $100k income is definitely not the norm.

Exactly. The last figure I saw for median individual income was around $26K. A household income in the 6 figures is in the top 15% nationally, something that I think gets forgotten around here rather frequently. Sure, six figures doesn't go as far as it used to and certainly isn't "wealthy" in many parts of the country, but neither is it normal/common. Most people will never make that much.

 

[crisi]

The average US worker doesn't make $50k in the US. $50k is the median income of a household in the US. You can't look at is as average because average gets skewed by the 1% of the extremely high incomes.

If you have 10 people, 9 who make $50k and 1 that makes $1M, the average income is $145k. Not very representative of what those 10 people are making in income.

Households making $100k income is definitely not the norm.

As you said, its household.

It isn't HARD for two people with college degrees who both work to have a household income of six figures. Not in all fields, but in many fields, a few years of experience with a college degree should make $50k. But only 30% of Americans have college degrees. And when you are talking about a relatively young couple with two professional degrees, careers, and kids, $100k doesn't go very far - daycare and student loans are often big budget killers.

Median household income is $50k, mean - or what we tend to think of as average, is $60k. Median does a better job of taking out those $1M earners. Mean is take ten people, add up their income and divide by ten. Median is take those ten people, line up their incomes like this

4800, 14,000, 23,000, 32,900, 46,000, 55,000, 60,000, 80,000, 120,000, 1,000,000

Take the number in the middle and that is the median (in this case, take the two numbers in the middle - 46k and 55k in my completely made up example, and average those two). You get $50,500 So it doesn't skew nearly as bad. The mean in my example is $143,570. Don't get me wrong, its still skewed, but if there are lots of people at the low end (and in the U.S. we have a lot more poor people than people who make a million dollars a year), it will skew down, not up. Which isn't to say income inequality isn't an issue in our society. Wikipedia has a nice graph of household income distribution. http://en.wikipedia.org/wiki/File:Distribution_of_Annual_Household_Income_in_the_United_States.png

The other thing to keep in mind in these discussions (and I'm not saying you are doing it) is there is a difference between income and assets. When we talk of millionaires, we are talking about someone whose net worth is a million dollars or more. When we talk of someone who has an income of a million dollars a year, that is a different thing. Most of us on this board should have a net worth of a million dollars when we retire - most of us make enough money that that is a completely reachable goal (and will be necessary to maintain our standards of living in retirement if we plan to live for some amount of time. Frankly, if my husband drops dead of a heart attack at 60, I still want to be able to travel when I'm 70. Yes, I'll miss him, but I'm not going to be my grandmother who spend her final decade sitting next to a grave with fond memories. And I sure hope he'd do the same. And yes, he has life insurance, and no, it isn't enough for me to be able to travel to Europe in my retirement if he passes on - but our savings are) Most of us will not make a million dollars a year. Making a million dollars a year makes it much easier to acquire the wealth that makes you a millionaire, but it isn't a given - you could spend every penny you make, you could give your income to charity, you could invest in pyramid scams. Likewise, you could have a small income and be a millionaire due to inheritance, savings, or just wealth (farmers and small business owners often have large net worths and small incomes)

 

[mefordis]

Wow, only 4% of all households are making over 200k?! I wonder how accurate this is.

As you said, its household.

It isn't HARD for two people with college degrees who both work to have a household income of six figures. Not in all fields, but in many fields, a few years of experience with a college degree should make $50k. But only 30% of Americans have college degrees. And when you are talking about a relatively young couple with two professional degrees, careers, and kids, $100k doesn't go very far - daycare and student loans are often big budget killers.

Median household income is $50k, mean - or what we tend to think of as average, is $60k. Median does a better job of taking out those $1M earners. Mean is take ten people, add up their income and divide by ten. Median is take those ten people, line up their incomes like this

4800, 14,000, 23,000, 32,900, 46,000, 55,000, 60,000, 80,000, 120,000, 1,000,000

Take the number in the middle and that is the median (in this case, take the two numbers in the middle - 46k and 55k in my completely made up example, and average those two). You get $50,500 So it doesn't skew nearly as bad. The mean in my example is $143,570. Don't get me wrong, its still skewed, but if there are lots of people at the low end (and in the U.S. we have a lot more poor people than people who make a million dollars a year), it will skew down, not up. Which isn't to say income inequality isn't an issue in our society. Wikipedia has a nice graph of household income distribution. http://en.wikipedia.org/wiki/File:Distribution_of_Annual_Household_Income_in_the_United_States.png

The other thing to keep in mind in these discussions (and I'm not saying you are doing it) is there is a difference between income and assets. When we talk of millionaires, we are talking about someone whose net worth is a million dollars or more. When we talk of someone who has an income of a million dollars a year, that is a different thing. Most of us on this board should have a net worth of a million dollars when we retire - most of us make enough money that that is a completely reachable goal (and will be necessary to maintain our standards of living in retirement if we plan to live for some amount of time. Frankly, if my husband drops dead of a heart attack at 60, I still want to be able to travel when I'm 70. Yes, I'll miss him, but I'm not going to be my grandmother who spend her final decade sitting next to a grave with fond memories. And I sure hope he'd do the same. And yes, he has life insurance, and no, it isn't enough for me to be able to travel to Europe in my retirement if he passes on - but our savings are) Most of us will not make a million dollars a year. Making a million dollars a year makes it much easier to acquire the wealth that makes you a millionaire, but it isn't a given - you could spend every penny you make, you could give your income to charity, you could invest in pyramid scams. Likewise, you could have a small income and be a millionaire due to inheritance, savings, or just wealth (farmers and small business owners often have large net worths and small incomes)

 

[Colleen27]

Wow, only 4% of all households are making over 200k?! I wonder how accurate this is.

That's about right. The census figures put it around the same mark, and are probably the primary source for the wiki entry.

Because wealth in this country is so tightly clustered, both geographically and socially, it is easy to lose perspective on what "normal" is. And that works at both ends of the scale. I doubt there's a single household in my community with a six-figure income, and I know I'm guilty at times of thinking of even 100K as a TON of money... because where I live it would be, even though in other parts of the country someone living on 100K isn't doing as well as we're doing on around half that.

 

[crisi]

That's about right. The census figures put it around the same mark, and are probably the primary source for the wiki entry.

Because wealth in this country is so tightly clustered, both geographically and socially, it is easy to lose perspective on what "normal" is. And that works at both ends of the scale. I doubt there's a single household in my community with a six-figure income, and I know I'm guilty at times of thinking of even 100K as a TON of money... because where I live it would be, even though in other parts of the country someone living on 100K isn't doing as well as we're doing on around half that.

The other thing to remember is that at the bottom end, you have a lot of retirees on social security or disabled people on SSDI and students living on student loans. So when you look at a graph like that one, you need to ask questions - the data itself isn't sufficient to understand the whole picture.

 

[tlh0726]

Sorry did not read through all the comments

Have a few friends and family members that have inherited money through their parents passing.

Those that could live within their means before receiving the money are doing well and have quite a nice retirement ahead of them.

Those that were basically living paycheck to paycheck before, the money is gone and they are still struggling.

If you want to get ahead, you need to make changes and be willing to live with those changes.

 

[Liberty Belle]

The average US worker doesn't make $50k in the US. $50k is the median income of a household in the US. You can't look at is as average because average gets skewed by the 1% of the extremely high incomes.

If you have 10 people, 9 who make $50k and 1 that makes $1M, the average income is $145k. Not very representative of what those 10 people are making in income.

Households making $100k income is definitely not the norm.

I was wondering about that. There are many jobs around here paying minimum wage, then the rest of the majority, I would guess pay somewhere between $18,000 - $35,000. And then some $36,000 -$50,000, but not a huge amount and the numbers get lower as the salary goes up.

 

[Liberty Belle]

Wow, only 4% of all households are making over 200k?! I wonder how accurate this is.

That doesn't surprise me at all.

 

[mefordis]

That doesn't surprise me at all.

With two people in a household working, and most do, I would think a lot of them would reach 100k, making a total of over 200k.

 

[mrsklamc]

With two people in a household working, and most do, I would think a lot of them would reach 100k, making a total of over 200k.

Maybe in New Jersey. Most working people in the US aren't realistically going to hit 100k.

 

[Egdisney]

With two people in a household working, and most do, I would think a lot of them would reach 100k, making a total of over 200k.

Nope. Most people do not reach 100k, let alone both in the household reaching it. What jobs do you suppose most people work to hit 100k? I don't know of very many. I also think that when a person gets close to six figures and there are children many times the spouse will stay at home. Usually when you are earning that much your job is demanding, and requires a lot of hours that may not be predictable.

 

[Liberty Belle]

With two people in a household working, and most do, I would think a lot of them would reach 100k, making a total of over 200k.

Not around here. The average household income here is about $56,000. My friends' and my household incomes range from about $40,000 to $125,000. Most are around $60,000 - $75,000, I'd say.

 

[Gumbo4x4]

As you said, its household.

It isn't HARD for two people with college degrees who both work to have a household income of six figures. Not in all fields, but in many fields, a few years of experience with a college degree should make $50k. But only 30% of Americans have college degrees. And when you are talking about a relatively young couple with two professional degrees, careers, and kids, $100k doesn't go very far - daycare and student loans are often big budget killers.

$100k household is very doable for two career people just about anywhere in the U.S. I would imagine. $200k would be VERY rare in my area. Doable, but those kinds of careers for BOTH spouses do not lend themselves to a family lifestyle. The time and/or travel required by one earner would dramatically limit the opportunities for the other.

OP mentioned being in Indianapolis. $100k should be pretty decent household money there, certainly enough to set aside some money every pay period for vacations *IF* they live reasonably frugally in their lives.