| > for most people that won’t be the case. I've had the same belief, but I've started questioning it. In retirement, your income (mostly) matches what you spend. Someone in their 20s or 30s may have both lower income and lifestyle costs (roommates, cheaper cars, no kids, etc) than they will at age 65. At age 65, you're probably maintaining 1 or more homes, supporting a partner (and kids), maybe drive a more expensive car and have much higher healthcare costs. If your lifestyle costs are more comfortable than your ramen noodle 20s and higher lifestyle costs put you in higher tax brackets, wouldn't most people actually have higher taxes in retirement? |
| How many people retire with minor kids or even kids in college? And if you are retiring with high fixed expenses and worrying about buying new expensive cars - you’re doing it wrong. Anecdotally, at even 51, we (wife 49) have been focusing on reducing our expenses since 2022. Our youngest son (my stepson) graduated in 2020. I slightly pivoted to a career that is mostly remote first (strategy cloud consulting + app dev). We sold our house in the burbs in 2024 that we had built in 2016 for twice the price we paid for it, downsized to one car that is below the median price of a new car in the US, downsized to a condo 1/3 the size of our old house (and less maintenance), moved to state tax free Florida, paid off some lingering debt. I “retired my wife” in 2020 because of a combination of not wanting her to be in the school system at the height of Covid, so she could explore her passion projects, so we could travel after Covid lifted and I started making significantly more working at BigTech remotely (no longer there). Our fixed expenses - money we have to spend to live - is around $8K a month all in and that’s going to go down some in 2028. We don’t live “miserly” at all. Our flexible expenses include lots of travel between short getaways and longer month long stays away from home, concerts etc. My entire idea is to do most of our expensive traveling while I’m working and healthy instead of waiting until I retire. I see retirement as us staying in another country for extended periods of time - we are starting that next year while I’m working. It’s also the last thing we want to do is have more than one home. Why would we do that and give up the optionality of just renting an AirBnb for long stays in different places both domestically and internationally? |
| |
| ▲ | itake 3 days ago | parent [-] | | > How many people retire with minor kids or even kids in college? I think a lot: avg age of first pregnancy (29.6) + marital age-gap (2.2 years) + 4 years (last kid) + 18 years + 5 years college (gap / delayed graduation) = 58.8 years old when the last kid finishes college. And then parents (probably) will need to help their kid's with their first home purchase. > Our fixed expenses - money we have to spend to live - is around $8K a month all in and that’s going to go down some in 2028. My fixed expenses when I was 25 was $2k/mo (living in ATL in 2012), I spend about $6k/mo (ignoring tax payments). You obviously don't have to continue growing your expenses, but for many people they want the option to stay in their child-raising home (especially if there is rising interest rates and housing prices). | | |
| ▲ | raw_anon_1111 3 days ago | parent [-] | | Funny enough, I moved from metro Atlanta to where I lived from the time I graduated from college in 1996 until 2022. I happen to have an old paystub in an email folder I sent to a real estate agent back then actually mid 2011. I was only bringing home around $5K a month back then and spending every penny of it just surviving. While I told my step sons from the day I was serious about my now wife (they were 9 and 14) and treating them as my kids that I would pay for college - they both decided not to go. I feel no obligation to help them pay for their first home. My parents didn’t help me get my first one when I was 28. On the other hand, I don’t believe you should buy a home too early because it limits mobility. If you can’t afford your home without help, you probably shouldn’t buy one and you don’t have the financial stability needed for it. Even if you do want to stay in your child raising home (my parents still live in the house they had built in 1978 and added in to it in 2004), it should be paid off or such a low expense by the time you retire it shouldn’t factor in. | | |
| ▲ | itake 2 days ago | parent [-] | | I’ve heard that in Wisconsin, it’s common for retirees to sell the family home and buy a cabin on a lake. The dad spends his remaining years fishing and enjoying the quiet. But downsizing to a lower-cost, rural area often means less access to healthcare. Eventually, Dad passes away, and the widow is left snowed in each winter: unable to afford moving back, now that home prices and interest rates have climbed far beyond what they sold for. > If you can’t afford your home without help, you probably shouldn’t buy one and you don’t have the financial stability needed for it. My prediction is more and more families will provide down payment support. $2m homes are affordable if you put 100% down and just need to worry about taxes, repairs, and insurance. Assuming everything else even (career/income, etc), the person with the family assistance will get to own the home pushing the goal post further away from the people that don't have family assistance. | | |
| ▲ | raw_anon_1111 2 days ago | parent [-] | | Looking at statistics of how much most people have in income in retirement and how much most depend on social security, people aren’t retiring rich. While I understand helping your kids to “launch”, letting them move back in for a couple of years after they graduate, subsidizing some of their expenses because they aren’t making enough to live where the opportunities are early on, etc, I never understood why parents pressure themselves helping grown kids buy houses, pay for expensive weddings etc. I told my parents plenty of times they should “die dead broke” - in other words spend their last dollar on their last breath and not worry about leaving me anything (only child). | | |
| ▲ | itake 2 days ago | parent [-] | | I can’t explain the parents pressuring themselves. if you look at any tier one city’s job centers unless you have a great career, living in a comfortable home near your house just isn’t affordable on a regular person salary. Which means your kids spend more time in their car and less time parenting their kids. Many families, especially ones that were careful with their spending, will choose to support their kids and enable them to live in neighborhoods. They couldn’t normally afford on their lower income. | | |
| ▲ | raw_anon_1111 2 days ago | parent [-] | | That’s just it, why should parents feel a moral obligation to be careful with their spending above helping their kids through college, helping them early on and then after that, it’s time for parents to “enjoy their best lives”. But let’s be realistic. The median income of a retired couple is only around $85K a year. https://www.gobankingrates.com/retirement/planning/what-aver... The median net worth is around a quarter million. https://www.cnbc.com/select/average-net-worth-of-americans-a... Parents should set expectations early on - don’t have any expectations that our job is to make your life easier once you are launched Once you decide to get married and have kids, your life is your responsibility. If my wife and I have any excess after taking care of all of our needs and wants. We will help our adult children. Even now at 51 and 49. Our older son (28) knows that we will help him a little but not much and our younger son 23 knows that the subsidies are cut once he turns 26. I save “enough” for retirement for my wife and I to be comfortable. But we aren’t over savers. We travel a lot, and enjoy ourselves. We asked our younger son was he absolutely sure he didn’t want to go college. We told him once he made that choice, we were moving to Florida, left him in Atlanta at our house and he and two of his friends paid us (heavily subsidized) rent for a year and a half and we helped them move out on their own when we sold our home. We have a two bedroom and one is an office. There is no room for our kids to move back in Even when we leave for months at a time we rent it out as a short term rental (prime location six miles from Disney). | | |
| ▲ | itake 2 days ago | parent [-] | | > it’s time for parents to “enjoy their best lives”. Personally, spending money doesn't bring joy to my life above a certain threshold. Research agrees with this sentiment [0]. I don't believe that a $400 camping trip near my house is 10x worse than $4000 trip to Europe. Likewise, you moving to FL (reducing lifestyle costs by 20%) doesn't make your life 20% worse than wherever you were living before. My issue with broad national or global surveys is they are largely meaningless on the individual level. You could be double the national income/wealth, but you still can't retire in Manhattan (if that is where you want to live due to being near your kids). Also, why stop at national? Why not compare yourself to global income/wealth? But circling back to the original point: If the next generation wants to live in a good area [2] in a tier1 city, the either need to the top 10% of their field or their parents need to lift them up. If someone wants to skip college to pursue plumbing, great! but they will never be able to compete with DINK tech/finance/medical households or trust fund kids bidding on properties in Buckhead. Land isn't growing, but population is. Even if only 1% of the parents each year subsidize their kid's housing, as t approaches infinity, cities will be filled with DINK and trust fund families. [0] - https://penntoday.upenn.edu/news/does-more-money-correlate-g... [1] - https://www.amazon.com/Die-Zero-Getting-Your-Money/dp/035856... | | |
| ▲ | raw_anon_1111 2 days ago | parent [-] | | And most people don’t live in a tier 1 city and they are fine. It’s not our responsibility as parents to fund extravagant life choices. They don’t have to live in Buckhead either. I have one son that lives in North Cobb and the other lives in Gwinnett. Heck when I lived in metro Atlanta, I lived in Marietta, Decatur, John’s Creek and finally outside of Cumming. I’m looking at the apartment I use to live in Marietta that I paid $700 a month for in 2003 and it’s now $1100 a month and still gets decent reviews. And why would an older person want to live in Manhattan? You remember I live in Florida the state where a lot of retirees come to get away from cold weather, their expensive homes, etc. And as you can tell, I’m not attached to my children I loved them. But we feel no need to be under them constantly. Our jobs are done. It’s up to them to find their own way in life. I moved from my parents the week after I graduated from college. They helped me launch and subsidized me to live to Atlanta early on. People can’t always have what they want - thst goes for children wanting to be in an expensive city or parents wanting to be near their kids. Even though in my social circle of mostly 10% of earners, we aren’t really that tied to our grown kids wanting to live near them. We want to have our own lives. Admittedly, most 50 year olds don’t have the freedom we have with low expenses, only one person working and working remotely. As far as money, we don’t spend much on things. But we do spend on experiences, travel by ourselves and with friends and crossing off our bucket list. |
|
|
|
|
|
|
|
|
