Yep. When people rail about the 1%, the people they're referring to are the 0.1%, 0.01%, or even smaller slices.
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NYT Editorial: $250k a year isn't Middle Class
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Yep. When people rail about the 1%, the people they're referring to are the 0.1%, 0.01%, or even smaller slices.
Glorified G
Member
If that couple is spending $3,750 a month minimum for rent on a $250,000 salary in NYC, not only their rich, they're rich idiots.
We all know poor middle class families struggle to make ends meet at $250k a year.
This picture kills me everytime...also makes me a bit annoyed.
I don't plan on keeping my loan for 20-30 years lol. More like 10 year plan. I don't plan on having student loans in addition to mortgage and car payments and other shit.
But $240k student debt is not unheard of. Professional school + undergrad could give you that kind of debt.
Vanillalite
Ask me about the GAF Notebook
Yep.
It isn't your local Dr or Lawyer at your local country club that's the problem. They won't ever even sniff the realm of the world's uber elite gatherings.
NYCmetsfan
Banned
This is not what people are paying. This is living beyond their means.
5K+ in rent? there are more affordable places And no they're not paying that much in health insurance if they're making 250k. And how are they paying that much in loans?
A maxed 401k contribution of 18% income of $250k is $45k per year.
Absolutely. That statement was more directed at high-earners and responding to a post about people complaining about not making enough in areas like SF and NYC. Well aware of the socio-economic cycle generations of families can get stuck in, but that mostly applies to lower class. Quoting just that part is taking it out of context!
internetwolf
Banned
NYCmetsfan
Banned
the contribution limit is 18k. So 36k. There's another 10 grand for their outrageous rent.
I think the people with that budget's problem is that their stupid and over paying for things. If you spend more than you have, then you don't have money. That doesn't make you not rich.
A 401k has a maximum contribution of $18k, not 18%.
Gotdatmoney
Member
Two things. $250k puts you leagues above the average joe. Way the fuck above the majority of working class people. Its a crazy idea to entertain it doesn't.
Second, there is obviously a disgustingly big divide between $250k raw salary and the types of incomes we see where money is just all bottled up at the top and stagnant. It's not 6 figure earners that are destroying the working class citizens. That is important to note too. Truly truly elite earners don't all walk into the office everyday for a year and walk out with $50 million salary.
So I agree there is context. But I flatout disagree with the ideal that was presented as "oh, I work really hard so I don't feel rich". Monetary value should not be equated with how you feel.
Oh oops. You're right.
But if each is doing $36k, then the other $9k could easily be health expenses for a family.
Jag
Member
Said Gotdatmoney.
Gotdatmoney
Member
Indeed. The other thing people miss when suggesting moves is that in some industries a 250k salary in DC is half that in smaller cities. So moving somewhere else won't always mean you take the same salary with you even if in the same industry.
We looked at moving to DC and earning twice what we do now, but expenses would be more than twice (near triple) for equivalent lifestyle (housing, daycare...). Maybe when the kids are older.
It's not me but it is some if not most of my coworkers. I personally live in North Jersey to keep some of those costs down. Subway is for the year for 2 adults. Subway pass for the year for one person costs roughly $1400.
Gotdatmoney
Member
How do you spend $60k a year on rent in new york with $250k income? That is fucking insane is it not? Thanks for clarifying the subway. I was almost gonna flip there haha.
Mr. Mister
Member
With two kids (2-3 bedroom) in a decent neighborhood zoned for good schools that isn't outrageous.
To be fair I did say $45-$60K. Most 2-3 bedroom apts in the Manhattan or Brooklyn are pretty pricey. I have no idea why or how they do it. I just simply asked my coworkers what they are currently paying. One owns a brownstone so that might answer that question.
It does make sense to move out of a place like DC for the same exact reason that you won't move into it! The pay decrease is still a better percentage than the decrease in the cost of living for equivalent lifestyle. You take a 50% cut in pay but your expenses go down by 75%. You end out on top which for people that are somehow living on the edge with 250k in DC a move would make sense. You could go from scraping by to having some nice luxuries and building a savings. Look at that guys NYC example. That imaginary couple is probably paying somewhere close to a $60-75k after tax premium for living in NYC.
I have no idea about NY, but in SF, you'd be hard pressed to find a two bedroom apartment in the city for less than $3K right now (and that assumes you're happy with a tiny apt, your 2 kids bunking up, and never having family come to visit. Adding a third bedroom will quickly add another $1k). Living somewhere that's 1.) safe and 2.) close enough that you don't wind up loosing 3 hours of the already limited time you have with your family commuting, is expensive.
The average middle class family does have savings much less max out their 401k. Yes major cities are expensive to live in but if you make 250k I bet you don't have to chose what bills you pay this month like a lot of people. if you do have huge student loans I bet they will be payed off in 10 years or less not 20 to 25 like a stuggling middle class family.
Vanillalite
Ask me about the GAF Notebook
It IS about feelings though because that's what the uber rich half of a % have made it about. It's about pitting your local car mechanic vs your local orthopedic surgeon and the FEELING of being gipped on either side.
All the while the tip top of the top make off like bandits as well as their mega corps.
It's how the argument has been framed for decades in the US.
Health insurance is a national market and the loans are the same. 401k is not really a cost--you choose to put the money in. The only costs there are rent and daycare, which can be cheaper by just going further out--the travel cost is the same on a subway card but it will take more time. But a subway pass for 2 is cheaper than 2 cars + gas + insurance.
Moving to my city... rent can go from $60k to $12k. Daycare from $25k to ~$18k and then NYC tax itself is going to be around $9k on top of state and federal tax for someone earning $250k ($3,071 then 3.68% on 160k). There's your $64k right there and we haven't even factored in general costs of living such as more expensive food and entertainment. Doesn't have to be a move to the burbs, my fiance walks to work in our small city. That NYC income tax doesn't go away if you move further out too.
Keep in mind that if you are commuting into NYC from either North Jersey, Connecticut or Westchester you have additional commuting costs (easily another 2K per person a year, maybe more). Plus you still have to have at minimum 1 car + gas+ insurance to get around town. So it is still expensive.
Byakuya769
Member
Not everyone can freely choose to live anywhere. For example, it's really hard to be a well off younger lawyer and not live in corporate hub cities (which are expensive), because available jobs aren't located in low-cost areas.
I think a bigger problem than 5% of people feeling that they're middle class when they make way more than everyone else, is a vast percentage of people who are income insecure and are barely getting by making much less than the previous generation, thinking that THEY are the true middle-class of America.
We should be fighting for people to have more security instead of being tricked into thinking that middle-classness affords the ability to own an iPad, PS4 and Netflix.
And your life is made worse by the time spent on the commute.
The class inflation I spoke about earlier. Defining middle class downwards glosses over actual problems in order to feel good about social standing and then paint a dentist or optometrist and those comfortable salaries as rich.
But where are the car costs? The $60k for rent is not a NYC rental requirement, like I said, you can live further out such as in Queens or Brooklyn for a lower amount, and even Kill3r7 has quoted a lower $45k range for rent--not sure why you are going for the higher amount. That would reduce your calculation to under $40k premium, even excluding car costs.
With regard to the city tax, you said after tax premium--why are you including tax in the cost now?
Kind of disingenuous to use high end figures and include taxes in a calculation for after tax costs.
I meant further into Queens, Brooklyn and the Bronx.
Byakuya769
Member
Agreed, and apologies if you mentioned this earlier, but it also stigmatizes high income laborers over the greater problem of capital holders. We should want people to predominately work for their income, instead of rest on their capital (which is much more readily transferred across generations with no connection to merit or work ethic).
Amory
Member
really depends on where in the country you live. if I grew up in the midwest rather than in a connecticut suburb, my parents would be considered rich (think they probably bring in $250k per year combined)
it's not like we were living a life of luxury though. we were comfortable for sure, but rich? eh.
it's not like we were living a life of luxury though. we were comfortable for sure, but rich? eh.
NumberThree
Member
That couple is literally putting into savings more money than I make in a year and I consider myself middle class..
TarpitCarnivore
Member
I commute from NJ -> NYC and my cost is $465/month for train, $110 for subway and $30 for parking. So roughly 7K a year.
Took some adjusting, but I don't mind it. It's ~3hours a day I get entirely to myself for whatever I want: reading, games, podcast, TV, etc.
Kite
Member
Many people consider themselves middle class who really aren't. If you're making around $35/40k a year I'd call you barely above working class. You should make enough money to cover the essentials like food and shelter and a bit left of discretionary income over for small luxuries.. like video games.
The middle class family you see on sitcoms with their house with a picket fence, front yard, can help put a kid through college and put a little away for retirement.. That is not you making $40k in most places. You're maybe on the very low end of middle class being generous.
I was assuming a move to a place where the job would no longer be in NYC and no longer subject to the NYC tax. That'd put $9k more in their pocket for spending. It's all besides the point, you agree with me. Someone making $250k is well off, and if they think they aren't because of their location, they need to move (which you suggested). I just advocate that relocating altogether is probably a wiser choice for their earnings. These hypothetical people are well-off, they have the skillset and abilities to be rich elsewhere. They just choose to stay in NYC or nearby and not have the comforts/security that they could have with that skillset elsewhere.
NumberThree
Member
Yes, the bolded is true. Especially people who make way more than actual middle class people.
Of course I'm in the low end of middle class (heck, I've barely graduated), but still middle class. I can buy any video games I want and still have enough left for wasting on synthesizers, just bought a relatively new car etc.
The middle class family in a sitcom is usually an upper middle class at worst.
Mr. Mister
Member
Where do you live? Do you have two children?
NumberThree
Member
Finland. I don't have children but that doesn't really have anything to do with retirement savings either (which was the issue I brought up).
If I was in the US I'd be making more but still well below $100k for what I currently do. Unfortunately I'd also probably need to live somewhere in the Bay area..
Shuggananas
Banned
We all know poor middle class families struggle to make ends meet at $250k a year.
this will never stop being hilariously sad
Walter Matthau
Member
I agree that it isn't middle class. Using the cost of living in the richest zip codes with the highest paying jobs, best schools, best infrastructure, highest exposure, lowest crime rates, highest number of career opportunities, etc as a measure for the entire country greatly distorts the economic reality of the U.S.
Yes they're poor. Not so poor that they have to rely 100% on government assistance the only need is social security and medicare) but poor enough that they fall short of self sufficiency and are at risk of getting fucked by one major mishap because they barely could've save anything for these situations.
25K doesn't cut it in most urban environments and even in suburban areas you're getting short changed for your work relative to your output after taking into the profits a successful company is making.
You get it. The other person I was responding was suggesting everyone should be living at below a subsistence level which is absurd. You and I don't need to quibble over the how high the average wage for middle class should be.
I'm over here dreaming about getting my family a home that cost $300,000. Wiley and I make a combined 80,000 and have a 180,000 home. I'm finishing up my Bachelors in Business Management and wifey is starting her nursing degree. We are both 29 and our goal by 34 is to be at a combined $105,000
and you guys over here talking about 250,000
and you guys over here talking about 250,000
Marty Chinn
Member
Your $180k home is probably about one million here. Your $300k home is probably about $1.4 million. Now tell me how that $250k a year income is so substantially more than your $105k when the housing alone is more than five times the cost?
I never looked at it that way. My house is about 2700 sqft brand new built in 2014. I would have to look at comparable housing there
Marty Chinn
Member
Forget what I said above. That's a $1.6 to $2.0 million house for something that new and that size. My prices were based on 1500 sqft built in 1960 for $1.0 million.
Walter Matthau
Member
Whose wealthier in absolute terms? The person who owns a $180k home or the one who owns a $1mm home?
250k a year would probably just reach the "rich" threshold here.
Most of the people earning that here either have their own firms or take their salaries through options or other similar mechanics. With you own firm you can cheat the taxcode by assigning most household goods and even transportation fees for tax returns etc and with options you only have a 30% tax rate. There's probably plenty of other ways to cheat the system legally.
College and healthcare is "free" so you have a shitload of money to spend however you like.
Most of the people earning that here either have their own firms or take their salaries through options or other similar mechanics. With you own firm you can cheat the taxcode by assigning most household goods and even transportation fees for tax returns etc and with options you only have a 30% tax rate. There's probably plenty of other ways to cheat the system legally.
College and healthcare is "free" so you have a shitload of money to spend however you like.
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