BLS says US median programmer salary in the US was just under $100,000 last year.
20 years of a normal US tech salary won't let you retire. A top-few-percent one, maybe.
20 years of a normal US tech salary won't let you retire. A top-few-percent one, maybe.
Instead I'd suggest looking at Software Developers (1.5M positions) with median income at $127K.
Second, by definition median is not a competitive salary. I'd think top 25% of devs are getting competitive salary. Which is $161K [1]
20 years of savings at 30% of income will get you $2M. Which is not a fat retirement, but still doable.
Yes, it is. For the field as a whole? Yes, it absolutely is. For specific segments of it? No. Some of those are higher. And others are lower.
> 20 years of savings at 30% of income will get you $2M. Which is not a fat retirement, but still doable.
Healthcare complicates early retirement badly in the US. Retire at (say) 45 with only $2m in the bank and you are... gambling. To put it mildly. Even if you live reasonably frugally.
100% this. I'm almost 50, and as I look towards retirement, I think I should try to find a cushy job that'll last me to 65 without causing too much stress, because until you qualify for Medicare it's really hard to afford health insurance premiums unless you're fashionably wealthy.
> Healthcare complicates early retirement
You don't have to stay in the US when retired. With 4% SWR one will be getting $80K/year. Which is more than median household income in the US and majority of the other countries. I am not advocating retiring at 45 with $2M, I am just saying it is not that crazy.
This is not a standard usage of the term in this context.
[EDIT] If you don't believe me, I'd encourage searching "competitive salary definition"
Uhh... Why? A very good health insurance is about $10k a year (PSA: the open enrollment period for 2024 has started today).
Even if you are unlucky to get a chronic condition that needs expensive care, that's still capped at around $6k a year by the out-of-pocket maximum.
So that's $16k a year per person maximum, over 20 years (until Medicare eligibility) that's $320k. If you want to include family, that's going to be around $500k. And that's the worst case.
It's going to be a huge chunk of the expense, but not insurmountable.
They had to raise my salary to $165k because this was the _minimal_ allowed competitive salary for my position ("Senior Software Developer"), and the USCIS doesn't take stock grants into account. This was 2 years ago.
I think one must have a very-skewed, bubble-bound definition of "competitive" for that to be plausibly true. Programming jobs don't pay enough to grant easy-mode early retirement for most of our field—even in the US.
https://www.bls.gov/ooh/computer-and-information-technology/...
But still, even the top-median category, "Computer and Information Research Scientists", doesn't have "retire in 20 years" median wages.
You were paying ~$3,000 per month for rent 20 years ago? I remember renting a place 22 years ago for $250 per month.
Maybe you were in some super insane cost of living area, but if that's the case, why would you accept just an average developer salary? Average salaries are for average places.
The (just under) $100k is pre-tax.
You won't get much social security when you hit "retirement age" if you retire after only 20 years of working at that level of income, so you'll need more savings at that age than others do.
$100k/yr is a 5% withdrawal rate on $2 million, which might be a "safe" rate at normal retirement age (debatable) but is risky as hell if you start doing it at 45 and don't plan to die in your 60s.
If you've been saving that aggressively (as cash/investments), you won't own your own house, or at least, you definitely won't be anywhere near paying it off. That significantly raises your costs in retirement.
You have significant risk from healthcare costs until you hit medicare age (and even then...). You're probably looking at $5k-10k a year in premiums (individual) at age 45+, and still five figures of annual risk exposure despite already paying that much.
Retiring on $2m at 45 would be very likely to end in failure, even as an individual supporting only yourself.
Yes, that's what the previous comment said. Of course, you don't need anywhere close to $100k, so you would still be reinvesting the bulk of it, just as you did throughout your career. That will see your returns continue to increase as you grow older.
> you won't own your own house, or at least, you definitely won't be anywhere near paying it off.
You'd have no trouble buying a home on a $30k income 20 years ago. They could barely give houses away back then.
> You have significant risk from healthcare costs
You still have $70k to play with each year. If you have to miss a year of reinvestment it won't hamstring you that much. As before, bad luck happens. It is possible you are the unlucky one. But generally speaking the money is there.
I made a bit more than that 20 years ago and can guarantee you it wasn't anywhere near enough money to buy a house. Finding affordable apartments to rent on that salary was difficult enough. I lived in New Orleans, which wasn't a high cost of living city at the time. Maybe if you lived in the middle of nowhere that would be doable, but almost certainly not in a city.
my experience agrees with yours.
You're absolutely right - the banks would give you a loan you couldn't actually afford. I seem to recall this leading to some sort of financial problem in 2008, unfortunately.
[EDIT] Further:
"The lowest 10 percent earned less than $54,310, and the highest 10 percent earned more than $157,690." (in 2022, still).
The ones who can retire in 20 years are making (ballpark) top-5%-of-field wages most or all of that time.
[EDIT EDIT] I didn't pick the best category for this, but the numbers only skew up 25ish % for the most-relevant one. Not a single BLS computer job category has a median particularly close to "retire in 20 years at this income" money. FAANG, finance, and a small segment of the startup market that's in that same category—yeah. Almost all the rest? No.