New York City Prices Make $100k Salary Feel Like $36,000
bloomberg.com
bloomberg.com
Shocking, coming from Germany, where the tax (minus health insurance) was almost exactly the same percentage, but I get a *lot* less for it.
Social Security, Unemployment & Labor: 39.63%
Medicare & Health: 22.67%
Military: 10.91%
Education: 6.21%
Interest on Debt: 4.27%
Veteran's Benefits: 4.27%
Everything Else: 12.04%
With respect to defense budget, one of the reasons the US economy is so strong is because of its military. Since WWII America has expanded its sphere of influence to encompass the entire world and dating back to the Monroe doctrine has operated with a 'f--- around and find out' attitude, that only works if you have the military hence why so much is spent on force projection. As a result the US has relatively unfettered access to natural resources, favourable exports/trade policies, IP protection (e.g. semiconductor exports to China) and economic power (e.g. the petrodollar) which stems from being the biggest and baddest. It can certainly be argued to what extent we still need to be doing this, but its not as simple as 'spend less on defense', or your sanctions won't mean anything anymore and there will be far less incentive for foreign powers to act in ways that are favourable to American interests. I don't know the answer to this question but the discussions by foreign policy experts have led me to believe this is far more complicated than it seems.
With respect to healthcare efficiency, looking at $ spent/resident is overly inflated. All healthcare systems are terribly inefficient with different tradeoffs, absolutely agree that it needs improving, but it's also not as bad as the media would have you believe. Another reason the US spends so much is that the level of care for complex cases is also much higher than anywhere else in the world and almost all major medical advances and research comes out of the US. Looking at Canada we are at historic lows in research spending and there are countless treatments we do not offer.
In both of these scenarios it's also worth noting that a large chunk of both expenditures goes towards paying salaries (and most to non-executives), so 'spending' at face value is not necessarily 'bad'.
Are you're basing that on the number of clinical trials compared to other countries or regions using the data from the WHO [1]?
As someone who worked for a large pharma company for almost 10 years I'd say it's easy to think that when in reality it's just easier to conduct clinical trials in the US compared to, for example, the EU. With the US market having the highest margins for pharmaceuticals and no ban on ads for prescription medicine it's also important to spend as much time in the US market while still under patent protection. A quicker way to enter the US market is by doing clinical trials in the US.
The company I worked for is global (like most pharma companies) and, depending on the indication, the research is actually more likely to not have been conducted in the US.
[1]: https://www.who.int/observatories/global-observatory-on-heal...
I made my statement on the basis of research productivity[0] (of course there will be some bias in this) and personal experience as a physician.
I'm less aware of pharmaceuticals as that's not my area of expertise (radiology) but medical devices, emerging imaging technology and oncology and clinical research are certainly dominated by U.S. researchers/institutions.
There are of course areas where other countries are equally strong/stronger due to niche powerhouses or disease prevalence (e.g. cardiovascular surgery in Germany, hepatobiliary disease in Japan) but even then the US is still a near peer and if you throw a dart at a list of guidelines you'll practically always find an American institution driving it or playing a large part.
A particularly striking and easy to assess example is in oncology where AJCC/NCCN basically set the standard, 5 of the top 10 cancer centres are US[1] (and the delta between the top 2 and the rest is very large) and the standardized imaging guidelines (e.g. BI-RADS for breast cancer which is now adopted worldwide) come out of America. Consequently these institutions get a lot of $$$ from donors and international patients (e.g. Sheikh Zayed buildings at Hopkins and MD Anderson).
As another example we can look at 7T MRI installations (effectively pointless for clinical use at this time), there are approximately the same number of units installed in the US as the entirety of Europe[2] although most/the best magnets are made by Siemens. Now for a technology like this to enter routine clinical practice someone has to show that it's actually better to justify the cost and these studies are mostly coming out of the US as it's easier to collaborate, conduct clinical research with large enough sample sizes, and there's (effectively) unlimited $ to waste on experimental ideas that may/may not pan out.
Once that research is done (which is more important than the industry funded pilots) and is shown to be better, other countries can just adopt it without taking on the risk of funding a new procedure/surgery/treatment regimen that takes away $ from someone else in a zero-sum public system. It's not that other countries don't have smart people or discover things it's just incredibly hard and/or pointless from a resource perspective to compete with the US who also culturally value 'being the best' (both vs. the rest of the world and vs. each other) and afford their clinicians generous/mandatory protected time to divert from clinical duties to scholarly activities (definitely true for Canada, UK and Germany where I have interacted with the most physicians).
[0]https://www.scimagojr.com/countryrank.php?area=2700
[1]https://www.newsweek.com/worlds-best-specialized-hospitals-2...
[2]https://www.google.com/maps/d/u/0/viewer?mid=1dXG84OZIAOxjsq...
The issue with places like NY, LA, SF, is that they are currently transitionary places. Its a place where you go work for a bit to build up your career, then leave to go somewhere with a much cheaper cost of living, significantly below EU for the comparatively same standard of living (unless you are on the lower end of the income scale where you definitely get more in EU).
A small minority of people stick around because their respective industry is in those cities (finance for NY, entertainment for LA), but they also get compensated way above the median/mean.
In EU, on the other hand, cities are places where people live normally at all income levels.
As someone who was born and raised in NY. No. People do actually live lives independent of what they do in the outer boroughs. Entire communities and generations of families. Far more significant that a small minority.
Seriously I need HN to understand what makes up NYC beyond Manhattan and gentrified Brooklyn.
You are guaranteed to get it by law. The problem is that the law can be changed to remove that guarantee. There isn't much we can really do to prevent that.
The narrative about SS running out of money is about the desire/need to change the law, not that the guarantee can't/won't be met.
You’ll just be extremely old, far beyond working age, and it wont keep up with actual inflation, so you can’t live on it.
Should see social security disability.
Got to be able to live for a year or more on no income at all while case managers decide that your horrific injuries don’t interfere with ability to work.
Europeans get a lot more for their tax dollars than Americans.
If you add up federal, state, local, and property taxes, the tax burden of many Americans is just as high as what Europeans pay and we don't get free health care or anywhere near the level of social safety net that Europeans do. The money is being spent inefficiently.
When you see Americans vote against tax increases, don't be tempted to think it's because we don't want better government services. We vote against tax increases because we know we don't get good value for the money we pay, and paying more isn't going to fix that.
Not sure about the results though.
This isn't true
We don't have UBI for old people (a pension system that you are eligible for based on aggregate amount of prior qualifying income is not a UBI.)
It is becoming increasingly tiresome to see any benefit touted as UBI. UBI mean universal benefits. If there are any criteria that prevent a person from receiving a benefit, it's not UBI -- it's just another benefit of the sort we've had for decades.
This is an explicit right wing talking point designed to raise the retirement age or abolish social security entirely.
Just imagine what GPT-4 will do to online propaganda...
Besides, that is not where the money is going.
America kind of teeters between doing nothing and coming in very punitively.
Compare how much of the GDP of European countries went into invading foreign countries?
Our how much is spent to arrest, judge and jail people. The number of people in jail in the USA for drug related crimes is completely insane.
Rather separate subject but relevant too: Defense spending is utterly dwarfed by these, and even for its huge existing defense spending, you can barely expect the U.S. to not keep it high as a major world power that is in effect obligated by many allies to tacitly protect them from the other major hostile powers in the world.
A quick look at the Ukraine situation right now and when that war started demonstrates this clearly: many pundits complaining about the U.S. military system but all major European states preferring its presence to its absence when Russia finally went and did something Really Dumb. Guess how many important Asian countries also tacitly depend on the same for vague protection from China.
I suspect that private profits are much higher in the US though, since that is supposed to be the incentive. I know that I would pay quite a bit of profit to someone in order to save my own life, and I imagine that people with children feel similarly about their lives.
It's not any great secret either, listen to Obama talk about healthcare back in the day, and the phrase he always used was, "bend the cost curve". I would think the obvious solution would be to set up one actual single-payer and then use monopsony power to force costs down. It would probably mean less profit for those sellers though.
I think everyone knows that is what Obama really wanted to do, but it was not politically possible at the time even in his own party, and it's still not possible today.
A useful exercise in understanding US healthcare:
Jump onto your search engine of choice and pull up a list of Fortune 500 companies. Take a look at the Top 10 and Top 50 companies. Once you see how many of them are healthcare related you'll understand why the US Gov and US Taxpayer get charged so much for so little.
My friends in London lose at least half their equity value to taxes, have to buy 1000yr leases, and seem to be generally poorer than their counterparts in the US.
Anecdotal, but the US is a rich country with I suspect a lower lower bound and a higher median quality of life per dollar.
Before you say the UK isn’t Europe it’s even worse in the EU imo.
The European welfare state usually works best for people who live "normal" lives. You get more for your taxes if you get education, have kids, and work a full career until the nominal retirement age. The American system works better for those who don't have kids or try to make a lot of money and retire early.
To be clear, it's still ridiculous to pay hundreds of dollars a month extra just to live in the five boroughs but 10% would be unmanageable
[1]: https://www.nyc.gov/assets/finance/downloads/pdf/22pdf/busin...
This is almost exactly what comes out of my paychecks every two weeks, and no I don’t get much back at the end of the year.
Sure, it's cool to get a job paying six figures in NYC out of college. But once you've paid your:
- rent (first and last up front, ofc)
- broker fees (often > 1 month's rent!)
- state taxes
- city taxes
- federal taxes
- social security
- massively inflated city grocery prices
- student loan dues
...you realize that you basically only exist to launder money between corporations. It especially sucks when you're just trying to start out with a net worth of less than zero and you're still paying this massive tax rate.
And before anyone mentions student loan interest deductions and federal tax deductions for state and local: they make very little difference, in my experience. Maybe others have figured out how to make that system work for them, especially before the Trump SALT deduction cap.
NYC is a cool city, of course -- probably the best city in the US -- but I'm not sure it's worth the 50% tax rate for decidedly middle class earners. At this point I'd have to make north of $400k/year to justify moving back to NYC because of those insane taxes.
If you take the correct risks you basically don't pay taxes.
If you try to avoid risk, you pay the highest taxes. So if you are just trying to have income and savings, enjoy your 39% taxes and nothing to show for it.
The peace of mind that if we have a medical emergency that we won't have to pay 5 or 6 figures out just for an ER visit + surgery is HUGE.
I'm kind of lost how this salary should feel like 36k/mo. To me this is a salary that reminds me of my childhood-- paycheck to paycheck, looming foreclosure from being behind on house payments, constant fliers from electric threatening to shut us off.
That isn't remotely what my experience was. I maxed my roth ira, paid into my 401k up to what my company matched, and had plenty left over month to month. I paid off the small amount of student loans I had within the year. I didn't have to think or care about what I spent money on. I went to bars weekly spending $12/drink. Work comped my dinners, and I ate out everyday for lunch.
Articles like this have created this perception online that you will starve to death on a salary like this in SF. I guess my question is, 100k here feels like 36k where?
NYC median rent this year is $3350. That's over $40k per year. On a $100k salary, which is about $60k after federal, state, and local taxes, rent is 2/3 of the take-home pay for someone making $100k.
More concretely, if you get $60k take-home pay per year after taxes, that's $5k per month, and if you pay median rent that leaves you with $1650 for everything else, and that rent price does not include all the utilities! That is pretty hard to live on if you have dependents. If you have to feed and clothe multiple people on $1650 a month you are going to feel pretty poor, even if you don't own a car!
i think dependents are probably what drives the disconnect. COL differences per area are amplified based on family size. but this isn't spelled out anywhere, nor does the fact that most people aren't trying to raise families in major cities in the first place
Median household income in Manhattan is just under $100k [2].
[1] https://www.census.gov/quickfacts/fact/table/newyorkcitynewy...
You can save money easily if you don't have wife/kids to worry about, and your income is reasonable, no matter how high the COL.
Doesn't pushing out the wealthy reduce cost of living? I heard NYC has a lot of vacant residential properties held as investments.
I interpret pushing out wealthy residents to mean someone moving to Florida and living there most of the year to avoid paying NYC income taxes, even if they choose to keep their NYC condo. NYC suffers a drop in tax revenue and the housing supply doesn't necessarily get better.
https://www.thecity.nyc/economy/2022/12/6/23497265/nyc-tax-d...
About .88% of assessed value on average, something like half the rate of the rest of New York State and less than half the rate of most of the Northeast!
So it's actually a pretty cheap place to buy an investment property. Seems strange to me that NY puts so much of its tax burden on renters and so little on owners.
Well spotted, this would indeed solve a lot of affordability issues.
My property tax here is almost the same as my city income tax was.
In NYC as a renter - I pay my income tax. My landlord pays the same rate on his rental income (you probably forgot this part) AND the "low" real estate tax you are referring to.
If I own my place, I am doubly fucked because I pay the high income tax and the RE tax.
The only people who come out ahead under the NYC model are those who live in a place they own but don't have any income. I think it's a very small demographic.
So if NY loses just it's wealthiest, it's absolutely fucked.
If this was true, shouldn't efficiency make living there cheaper?
People constantly say that cities "subsidize" suburbs but when you look into it you find out that is only sometimes true, and that many of the people who do the most productive work in cities commute there from the suburbs, and that many of the world's most valuable companies, including all but one of the FAANG companies, are located in suburban areas.
Plus, if people really want to talk about "subsidies" they should admit that big dense cities get plenty of those too.
You'll also see a lot of commenters who think "suburban" and "rural" are the same thing, often without realizing it, to the extent that one particularly clueless comment I saw recently asserted that nobody in the suburbs had city utilities and all the houses had septic tanks.
Cities are actually very expensive to maintain, and they tend to have the worst concentration of problems such as crime and drug abuse, and NYC is one of the prime examples.
Per capita drug use in NYC isn't as bad as many rural areas, where meth has become a huge problem. The fact is that more people mean smaller percentages can still mean lots of people.
Cities really aren't that expensive compared to the wealth they produce. Its just that with scale also means demand goes up, which increases prices because resources are still finite.
> strongtowns.org which is a non-credible source run by a crank
I've yet to see a comprehensive takedown of the main points of Strong Towns that isn't addressed directly in the book. I don't think your argument amounts to one.
Suburban businesses can be highly productive, but municipalities do not directly benefit from this since taxes on business profits do not go to municipalities. They may indirectly benefit from higher property values - and therefore property taxes - near the business center, but in general the suburban development model spreads houses and businesses so far out (and splits them through zoning) that the maintenance burden on the city is still too high relative to municipal funding through taxes. Marohn devotes many pages to this in the book.
I'm not sure how Chuck Marohn is a crank. Is it because of the complaint against him from the licensing board? His PE license lapsed from 2018-2020. He filed to have it renewed [0] before he was aware of the Minnesota licensing board's complaint. He should not have called himself a PE while his license was lapsed, but I don't think it negates any of his arguments and I think it's a stretch to say he is deliberately misleading.
> Cities are actually very expensive to maintain
Tremendously so, but some of them seem to do very well with defeasing those expenses (see NYC's significant budget surplus) [0]. The difference is that cities do not have a fundamentally broken development pattern that is guaranteed to always depend on external funding or growth.
> and they tend to have the worst concentration of problems such as crime and drug abuse, and NYC is one of the prime examples
This is a complex conversation, and I disagree with your conclusion. There were 433 homicides in NYC in 2022 [2] and 8.5 million people [3], for a murder rate of 5.1 per 100,000 people. This is worse than that of Maine, Vermont, or New Hampshire, but similar to the murder rate in Wyoming (4.9), less than that of Texas or Montana (6.6 and 7.1), and significantly lower than that of almost the entire American South (7.8 to 20.5) [4].
To your point about drug abuse in NYC, I disagree. There were <2168 fatal overdoses in NYC in 2020 [5], which works out to 25.675 per 100,000 people. One look at the overdose fatality map [6] tells you that this is middle of the road, and dwarfed by rural states in the region like Vermont, New Hampshire, and West Virginia. The drug crisis in America is terrible, but urbanicity does not exacerbate it.
The right conclusion, I think, is that urbanicity does not drive murder rates or drug abuse - poverty, deprivation, lack of opportunity, and other factors do. This is why NYC is relatively safe despite being the most urban place in America, while other states and cities (hello Texas, Mississippi, Chicago, New Orleans, and Flint) of various levels of urbanization are much more dangerous. These places are poor, for reasons that are, ironically enough, frequently addressed by Strong Towns.
[0] https://news.ycombinator.com/item?id=27296177 [1] https://www.cityandstateny.com/policy/2022/06/new-york-citys... [2] https://www.nyc.gov/site/nypd/news/p00071/nypd-citywide-crim... [3] https://www.populationu.com/cities/new-york-city-population (not the best source, but seems close) [4] https://www.cdc.gov/nchs/pressroom/sosmap/homicide_mortality... [5] https://www.nytimes.com/2023/01/13/nyregion/new-york-overdos... [6] https://www.cdc.gov/nchs/pressroom/sosmap/drug_poisoning_mor...
While it is true that wealthy people live in suburbs and commute to the city and contribute to the economy, the same infrastructure is generally more expensive in a suburb than a city because it has to travel longer distances between houses. That is just geography and physics. Picking up garbage for a building with 10 apartments is going to be cheaper per household then driving between 10 different houses, for example.
The relationship between cities and suburbs is symbiotic in some ways, but in many ways suburbs rely on exporting costs onto cities. Suburbs exclude poor people by design (zoning rules and housing supply restrictions), so that they don't have to pay for all the social services used by poorer people. And when you say 'city infra is more expensive', a huge percentage of the city infrastructure (e.g. roads, trains, sewers) is used by people who commute into the city when they are in the city. Very few people living in the city go and use infrastructure in the suburbs on a daily basis.
Imagine if everyone in NYC tried to move out to the suburbs, it would not be remotely feasible. They wouldn't have the social services for the poor and wouldn't be able to get the tax revenue to maintain infrastructure between houses while preserving the spread out distances between houses without dramatically raising taxes. The rich would then probably just flee somewhere else and take their taxes with them. Additionally, lower income people couldn't even afford the houses/cars needed to live there in the first place.
You make more money in cities, and it is easier to find a job. Living in a small town in Montana sounds great, until you realize that you can't find a job and are starving to death. Smaller towns and cities are cheaper simply because people have less money to spend on housing. But try going to Aspen CO or Jackson WY, and its crushing because so many rich people are living in those places and the only jobs to be had are low paying ones serving those rich people.
For example, the premium some would pay to live near certain amenities or family. For example, being within easy weekend driving of world class skiing, backpacking and hiking.
If I was paid 100k and had to pay 10k to live near those amenities vs Nebraska, no question I’d pay. These are hard to factor into a ranking like this but without some consideration of them the list is of marginal use.
Think how much money I could save by moving out of SF. I am staying here.
If Leaving out a crucial aspects just because they are hard to quantify then it is easy to stray into the garbage in garbage out arena. That’s harsh, I don’t think the list is garbage I just think it needs to at least try.
That’s actually one way the results of the study can be interpreted, despite paying a cost of living difference of about $40k to live in NY vs Tennessee, smart people are choosing NY. That means the benefit they get by remaining in NY is greater than $40k…
To a rough first order approximation. But it’s no rougher than completely neglecting value of location.
On a side note, that’s a nice 2 story house on the beach, want to swap it for my two story house in the suburbs? It’s equivalent right!
... that only means it has value for those people. If money wasn't an option, I still wouldn't move to San Francisco.
Why is anyone drinking Napa wine or craft coffee rather than gallon jug wine and Folgers?
Would it make sense to create a list of wine where the sole criteria is price?
Tastes like hangovers and burning but $25 buys five gallons, while this tasty wine only gets a bottle! Adding location into it, only gets two glasses for the tasty wine at a bar.
so might as well stay home and drink a gallon of hangover on a couch. By using a ranking that ignores anything hard to price, it’s the highest ranked choice!
Removing subjectivity isn't the goal. Providing insight is. And this isn't providing much insight.
One very common mistake people make in evaluating NYC living costs is to work with rent statistics provided by ... high-end real estate brokers. For example in an another Bloomberg article that the story links to:
The median rent on newly signed leases last month was $4,095, down just $2 from January, according to appraiser Miller Samuel Inc. and brokerage Douglas Elliman Real Estate.
Everyone in NYC knows this just isn't true -- a very large portion of NYC tenants live in either rent-stabilized units, or in units not listed on the MLS system that these brokers work with (and from which they get these numbers from).
Not surprisingly, these brokers have a vested interest in propping up the idea that "you just have to" fork over $4k a month for rent in NYC.
Now, rent stabilized units of course aren't exactly easy to get -- and you may not want to live in many of these units. But on a strictly factual basis - the true median rents in NYC are far lower than the numbers provided by these high-end brokers.
Finally, there's the fact that NYC is one of the few cities where one legitimately does not need to maintain car at all (easily a $6k-$10k savings every year). The article simply mentions "transportation" but completely glosses over this crucial distinction between NYC and other cities.
But I assure you the vast bulk of stabilized units have grandfathered rents from way back, and these are far below market. Which is why the industry always fights tooth-and-claw to get these restrictions lifted or lessened, any time they get half a chance.
Of course there are contingent factors involved. I'm just saying that factually, the median rent numbers put out by the brokers are plainly bogus.
- subway fare ($120/mo, possibly pre-tax on a commuter card)
- rideshares or rental vans for occasional large item pickups
- rental cars or unreasonably expensive Amtrak fares when you want to leave the city or visit family (the rest of the USA requires a car, ofc)
After those costs, you're saving more like $1-5k/year. You can avoid them if you walk more than average or never get out of the city, but in my experience there's a bit of a mental health toll if you spend many many months in NYC and never get out of the city, especially if you have friends and family outside of the city.
Without access to the methods and date the article is drawing from, it's impossible to hold much stock in their conclusions.
My friend who works as an engineer at Google was lamenting to me the other day how his 350k+ TC basically feels like nothing in NYC after federal, state and city taxes. He takes a 50% loss. Why would you want to continue living in a place that takes what is a top 1-2% earner for our age group (25-30) and makes them feel poor? And that is even considering RSUs since those are vesting monthly at Google now.
He's almost priced out even in Brooklyn, paying over 3k for his 1 bedroom. But if you don't want to live in some slum lord pre ww2 shit hole you need to be paying a lot.
I'm in the same earning bracket and I've been contemplating a further move because while Jersey is easier on the wage taxes, the property taxes are insane and make buying a house here deeply un attractive.
1 acre lots 30 miles N/NE of Dallas in desirable areas with good school districts are well over $200k these days.
Least out of touch FAANG engineer
Also I don't work for a FAANG but it's arguing semantics as they're around the same tier.
As a proud Texan, I am very happy to see so many Texas cities ranked high on affordability. I often hear people say we should also consider the quality of life in expensive cities. Although I agree that quality of life on standard metrics might be better in NYC, SF, or Honolulu, I would rather save my money living in Texas and take vacations to pricy places.
Interestingly, Arizona in particular is famous for its "snowbirds"; Canadians (and likely those living in the northern US states as well) tend to buy houses there to get more than 4 hours of sunshine in the winter.
One town recently had its water supply cut off. But as far as I understand this wasn't so much because the town was running out of water but because the parent city it took its water from was growing very fast and needed that water for its new residents. There was something in the contract that allowed the parent city to do this.
The Phoenix metro in particular has very advanced water recycling tech, most of the water that is taken in gets reused as long as its not used for irrigation (admittedly likely the majority of the water use in the city). Long term this means water will become more expensive, and the many golf resorts and hotels will probably need to change their lawns to fake turf or close up entirely. Most residences don't actually use that much water for irrigation, as a lot of the landscaping is desert-based already.
Recent heavy rainstorms have lead some to believe the Sonoran desert may actually get wetter as climate change happens. And with this the state is planning to use its aquifers to store the water from those storms for the dry years.
The Colorado river is low, but I believe Arizona has higher water rights than e.g. California. Meaning Southern California would lose its main water supply before the Phoenix metro would.
On the other hand, I actually know at least one couple that decided to leave a couple years ago because of their concerns over water and climate change.
There's also concerns regarding the water use of the exploding chip manufacturing industry being built there. These companies will require a lot of water and be able to pay the premiums even over residents.
It's a common fallacy of the new yorker to think they're the only one who has figured out living, and everyone else wants to be where they are but can't afford it. (not saying this was you, but it's something I've heard many a time)
How else do you interpret that other then they are sacrificing day to day quality of life in favor of more expensive vacations?
The post admits that these cheaper towns have a measurably lower qol
This plan could go wrong. But it also makes a serious of fairly pessimistic assumptions about the person’s entire working career. And it doesn’t require extreme frugality either - the friends I have making <$40k still eat out and go to concerts. There’s this pervasive myth (exemplified by the top-level comment) that moving to a big city is an unmitigated financial disaster that requires an upper-middle class income to defray, and I just don’t think it’s true.
- No raises throughout the entire career lifetime
- No economy of scale through marriage
- Significant SS benefits cut
- Never earning another cent in earned income after retiring at the full retirement age of 67
- Living for thirty years after retirement (which is the baseline for the 4% rule; average life expectancy at birth in America in 2021 is an atrocious 76.1 years)
- No "extreme" frugality measures - relatively frequent eating out and going to concerts/basketball games
- Low real returns on any accrued savings
Note that none of this - absolutely none of it - is an argument that America should not expand the safety net, or that we shouldn't fix the housing market. I'm just saying that people with average incomes still have options, even in New York City
I know medical bills can be expensive, and of course you need to pay utilities, likely vehicle upkeep, food, etc. but 42 grand minimum per year seems pretty good to me?
Housing blows that up, though.
Everyone wants to beat death. Why would anyone plan to burn all retirement savings out by a set date that one could reasonably live past?
People can have a pleasant life in an expensive city making far, far less than that IMO.
Just to be contrarian, there's more than 1 valid life path, but I'll make the totally opposite argument than yours. People who can't make a lot of money should consider living in a big city, and people who can make a reasonable amount of money should try and live outside of it.
Here's the argument.
People who can't make a lot of money anywhere won't likely ever be buying a house anyway regardless of where they live, so they'll fit into the rental culture in the city very well. If you're not making a lot of money, you won't be able to frequently travel regardless of where you live, so living in a big city is an advantage as it at least gives you an opportunity to experience a bit of global culture, have friends from around the country/world sometimes pass through and visit you, and gives you an option for an occasional fancy dinner out or tickets to some event when you can save up enough without thinking about a long trip that you don't have time for and can't afford. Ok, maybe you won't be going out for a fancy dinner, Beyonce concert, or Knicks game every single week, but you can save and plan for that once in a while and it's a realistic subway ride across town if you want it. A poor person living in a big city can have experiences that they wouldn't be able to logistically arrange otherwise.
But if you are capable of making a reasonably solid living, it makes more sense to stay out of the city. First, you'll likely be able to afford your own home comfortably. Even very high-earners can't afford to ever buy much more than a nice and clean and relatively roach/mice-free shoe-box in NYC, but you can live like a near-king in a smaller city making anywhere in 6 figures and can buy a massive home with all of the space needed for just about any hobby. A million dollars can get you a near palace outside of a major city, whereas a million dollar home in NYC is still depressingly small. And if you're making money and have your own home, you have the ability to travel anywhere you want when you're jonesing for some nightlife, beaches, gambling, entertainment, etc.
The uber-rich can afford to have homes in multiple towns and cities and can afford lots of space and an uber-comfortable life in any expensive city, so this analysis doesn't matter for them.