ideal income for family of 6

Maybe its b/c I love working so much? (Just our situation, not judging anyone who makes that or less.). You make think you are happy at $75,000, but boy oh boy, once you get to $199,999, you are ECSTATIC! Nobody looks down on the middle class, only the rich and poor! Paying a total effective tax rate over 30% doesnt seem worth it at this stage in my life. Isnt it plain obvious that its not a matter of smartness to choose your major. Therefore, if you plan to earn the second ideal income amount, you had better enjoy your job or already be near or in retirement. I dont make 65-75k, even with the business major. Therefore, you want to make up to the ideal income level and no more so you don't waste too much energy and time. Who cares if $500,000 buys you a 4,000 square foot mansion in Des Moines, and only a 600 square foot studio in Manhattan. I am now officially working 4 days a week at my day job (so 33hours) and I work on my online company for the extra day. Therfore, my objectives is to make $100,000 per year (my wife doesnt work) but working 30 hours maximum. The middle class is the best class in the world because it always gets pandered to by the government. As a Chicago resident, I think its laughable that you double down on your argument by bringing up municipalities Chicago/Cook County/Illinois tax us at every possible turn, yet still dont have nearly enough money to cover annual budgets/outstanding debts. Otherwise, any money above the estate tax threshold will be taxed at 40%. You will have to work forever, live in fear of losing your job, and suffer the indignity of dealing with jerks all day long. It would be even more interesting if you included FICA into this analysis. Wrt your question on the 50% who pay taxes against the 50% who dont, you may want to have a read of this post: https://www.financialsamurai.com/2010/07/28/the-ultimate-solution-for-a-fair-income-tax-policy-in-america/. It effectively splits the 24% tax bracket into two if you think about it. Sign up for the private Financial Samurai newsletter! The 2022 income tax brackets and standard deductions are out! You can also make up to the 2022 standard deduction amounts and pay no income taxes. Paying taxes is good for society. The government is benevolent for themselves and the possibility of getting re-elected and enriching themselves in the process. Financially, you would need to gauge salary and the numbers hour spent to earn it. We need to grow up and pay taxes like our parents and grandparents have. You can now give $16,000 per person in 2022 tax-free. Its not even close. We used to marvel over Europeans paying 50% in taxes to support their national health plans. Its up now. There is no such thing as an idea income for Maximum happiness! I actually attribute a lot of this to our social security system, although the same system can cause unhappiness and frustration amongst more liberal Danes. A good life can be lived with an income high enough to pay a 25% effective tax rate. MLS ID #2520558. * Optimal income for paying your fair share of taxes, but not an egregious amount that makes you sick. Tax is Theft by another name. Your email address will not be published. If I had to pick my ideal income it would be around $600,000 so I can enjoy the finer things in life like travel and amazing food. Ithink i found a balance in 2010 taking 6 weeks off in addition to the normal 8 public holidays. Anarchy will ensue! Does your estimate look right? Highlight poor choices that are made by elected officials and better choices that could be made. If you want maximum happiness, there is an ideal income to earn. Hoping more people can answer this questions. MANILA, Philippines - A Filipino household of 4 should have a gross monthly income of P120,000 to live a "simple, comfortable life," which entails owning a car and a medium-sized house,. We do highly welcome posts and community interaction, and registering is simply part of the posting system. But my whole point is: plan making and thinking about your lifestyle comes to you only if the people around you are already performing this activity; if you have been stimulated. Everyone looks forward to any changes that personally benefit them that is human nature. Can you specifically highlight where I am complaining? Sounds good. For 2022,long-term capital gains and qualified dividendsface the following tax rates: 20% tax rate on any income beyond $517,200. The teachers salary is maybe a tenth of that. If not how do you know it will bring in a perfect level of happiness? While im in Thailand I live a very nice lifestyle for $1500 per month, Ill be in Europe later this year and I will need around $4000 a month. In 10 years, your children are guaranteed to thank you or your money back. We decided to get the second best platinum healthcare plan possible because we have two kids under three years old and didn't want to mess around. Written by Libby Kane, CFEI. Here are four charts I created for the 2022 income tax brackets for singles and for married couples. In these charts, I also include the long-term capital gains tax rates. In 2008, I graduated as an A-/B+ engineering student at a top 15 US News school, and Id like to think I interview pretty well. Hi Buck, yes, I feel happy at my current economic level. Most people wont, in high school, say that theyre going to go into finance or engineering because they can make an extra $15,000 out of school. That's nice of the IRS, but at the end of the day, the government still wants our money!. Sorry. So long as you make less than 400% of FPL for your household size, you are eligible for subsidies. Btw, my birth in a private hospital in an expensive city in the the USA $25k (no complications straight forward, shared recovery room 2 days stay insurance covered, excluding prenatal appointments) vs $1,800 in Mexico (where my second was born, as was I)! The government uses the average family income to report the poverty threshold for statistical purposes. Anybody who WANTS to make 65-75K out of college can. This article was very insightful to understand 2022 tax rates. Its sad that this recession has created so many 20-something year old and maybe even 30-something year old unproductive members of society. I would get rid of grades all together and focus on skills and independence (Montessori type education) . In Nebraska, it is about $280,000. There is obviously a good argument to be made for why investment income and gains should be not be taxed at a higher rate, since we already paid taxes on the invested capital. Ive been writing about helping people achieve financial independence since 2009. You often say that you like donating to your community, and taxes are essentially a fair donation to keep society functioning. ( Of course if you have a taste for a high end life style then no amount of money can satisfy you. The $60k/75k happiness curve relates to a study by behavioral economist Daniel Kahneman on how we perceive our current state https://www.youtube.com/watch?v=XgRlrBl-7Yg. Nobody knows what savings are, but thats mostly because people barely make ends meet. Food Costs. Spending money on education is GOOD. DISCLAIMER: Financial Samurai exists to thought provoke and learn from the community. So above $200,000 we should all start our own businesses on the side right? Im curious of u do show the post to your class, what the outcome of the debate will be! How much your neighbors, friends, family, and coworkers make will have a major effect on your perception of how happy you are; if you are the highest earner in your circle, youll probably be thrilled, even if youre only bringing in $20,000. You will see these capital gains and qualified dividends tax rates conveniently included in the charts above in the most right column. The thing here is contentment. They are: At these income levels, you are only paying a marginal income tax rate of 12%. And also bless your son. I wrote a new 2023 Income Tax Bracket post with the same theme. Im assuming from your name Financial Samurai that you are perhaps Spending money on infrastructure is GOOD. The ones where municipalities are so in debt that they are closing schools. What is it that you do for a living Davis? A person would be happy with a $60K job working 35 hours a day spending quality and relaxing time with the family and spending a few hours working on the online business at night. So damn hard. Congrats on paying six figures in taxes. Adults ages 45 to 54 remained the top earners, with a median household income of $97,089 about 37 percent higher than the median income across all age groups. Are you in the U.S. middle class? Try our income calculator | Pew I also wanted to tell people that happiness certainly does improve beyond 75k/yr. Not bad! :). Affordability Calculator - How Much House Can I Afford? | Zillow (Personally, I dont think there is a magic income number; I think even Bill Gates gets a little smile when he sees his net worth increase.). Its a great balance! I work in education. I am a young business/sales professional Im impressed you are only working 45-50 hours a week TOTAL with your company and online ventures. Overall, I am probably working around 45 50 hours a week but 20 hours a week is for my company, which is a hobby at the same time (I sometimes put my book or my playstation aside to write on my blogs!). Because the two states in the Midwest losing population the fastest are Michigan and Illinois: both of which couldnt be more blue. So remember non-zombie readers, $75,000 is still way too low. That's right, if a family of four can earn up to $104,800 a year and still get financial help! The best feature is the 401K Fee Analyzer which is now saving me over $1,000 a year in portfolio fees I had no idea I was paying! And another thing. Yes, it's true that most working Americans don't pay federal income taxes. I know this is old but hope you still see this I will say, I disagree with a few things I read often here: 1. The rate would kick in for single filers with income over $400,000, heads of household over $425,000, married joint filers over $450,000, and married separate filers over $225,000. The effective tax rate is actually much lower. Here in Denmark, with a pre-tax income of about 76k a year, I pay 46% in taxes! They are afree online platform which aggregates all your financial accounts in one place so you can see where you can optimize. Plan on spending 5 to 10 percent of your income to pay down your consumer debt including car payments, credit cards and student loans. The government wouldn't be so evil as to arbitrarily make $200,000 the line given how equal the cost of living is around the nation. My marginal Federal income tax rate is 24% (to return to 25% in a few years). Even as an income limited person, it doesnt take a lot to reach the salt limit. America needs you. Therefore, if Im fortunate enough to pay more than a 25% effective tax rate, I will throttle my work in order to enjoy life more. How Much Your Monthly Food Budget Should Be + Grocery Calculator - Mint Im hoping tax rates wont go up any higher. Interested to how reinstatement of at least partial SALT deduction as being talked about may impact above discussion. I dont know how anyone can live in any circumstance with the amount he receives. For 2022 theannual exclusion for giftsto individuals has increased from $15,000 to $16,000. Readers are what makes writing this blog a blast. First year analysts in investment banking or private equity for example make about $115,000 ($65,000 base, $60,000 bonus) their first full year. All is good. The median household income has been steadily rising since 2010, so this was the most significant drop since then. Donno. This envy is probably the #1 reason for most of the more damaging policies. So, I ended up majoring in a BA. They said they dont understand why the word socialism is considered a bad word in America. Generally speaking, the money spent has a higher return collectively than it does privately. Is paying a 15% tax on your S Corp distributions what you pay? Shes much smarter than I am, I just happened to choose the right major. So, Sam, what level of taxes do you see as fair today, and in the future? If youre going to try to make this post political (which was never the intention) while also giving yourself a self-righteous pat on the back, at least put forth a semi-respectable argument. Unless you have a revelation. What income level will make you, as an individual, happy is determined by many traits. Great, now my blood pressure is rising and I need to go to sleep! However, Im looking for the maximum income for happiness where more income doesnt create more happiness. Many key points were raised here and in comments location, location, location. Being content with what you have is just dandy. I dont write too clearly on purpose, but it sounds like you get all the poi ts. Everybody should pay their taxes. District of Columbia - $173,874 per family. Who would benefit from removing the cap on the SALT deduction? I dont think there is an ideal income. If you have a small business, opening up a custodial Roth IRA for your child is a no-brainer. In fact, if you arent the voting block that represents the current administation, you need to be taxed more (at least in their eyes)! Researchers say the ideal income for maximum happiness is $75,000. But dont take the concept for granted with everybody. A lot of people who are making multiple six figures just can't stand their jobs! In the end, the magical numbers is definitely coming from the lifestyle you want to get. My family of four pay $2,380 a month in healthcare premiums. * No longer a target by the government, the media, or the IRS. Unfortunately, once you start making more than that, you get persecuted by the govt like a convicted felon! I think a lot of people who chase money are really chasing these, thinking more money will be the way to acquire them. Alaska and Hawaii differ from the other 48 states + DC. (btw I taught myself high school so that I could travel the world competing and still managed to get a scholarship in a prestigious university in Boston, though English is my second language and my high school grades (I had to take governmen tests to pass it) were not so good). Rather start a side hustle and precede as follows. A 10 percentage point jump is pretty steep. It amazes me that the ~50% who pay all the taxes arent more pissed off that the other ~50% pay nothing. I also love work that doesnt mean I need to aim for a 200k salary a year been there done that and its not fun. My point is that until you face or have a loved one facing the unfortunate reality of this, the amount given is absurd. Not bad! The thesis states that you will reach your max happiness state at 200k and fade afterwards. Great article. This is such a broad question that I dont believe there is a single answer. So yes you increase your chances but it is not realistic for everyone. He so badly wishes he could! I reckoned at least 100,000 GBP for a family with 2 children (which is around $160,000 US) so not far off your estimate. Totally agree with the rest. Your blog lauds achieving early wealth as a means of achieving autonomy, which is obviously smart, though if you want to be truly helpful to others that dont have the same path aspiring doctors, lawyers, professors, early parents, entrepreneurs, divorcees and others that defer the rewards for a higher, later, or different type of payout, as well as the average joe, there should be some emphasis on balancing the autonomy with seeking excellence in what you do, and feeling a sense of understanding, companionship and empathy. I think the best tax rate is a 15-20% flat tax rate which MAXIMIZES revenue b/c it minimizes tax avoidance, and everybody can pay. How a Family of 6 Manages Their Money - Business Insider Wow! Getting healthcare under the ACA is inexpensive. The most important subsidy, again, is for healthcare under the Affordable Care Act. I had multiple job offers, but all were for a bit less than $65K. That's kinda silly and totally presumptuous you sexist pigs. Healthcare is by far the most important subsidy for most Americans. Posts like this are easily the most frustrating type of post that you do. If I was 23 and out of grad school again, 75k would have made me giddy as a graduated school girl. Further, the widest differential between the income tax rate and long-term capital gains tax rate is income between $215,951 to $459,750. 2 hours ago. When my husband and I sit and stare at the stars, and dream about making the big bucks, we always cap it with the caveat as long as we dont make more than $200 K. Thats our inside joke. If you can't make $170,050 as a single person or $340,100 as a married couple, there's a second ideal income amount for ultimate happiness and paying reasonable taxes. If you feel you're not getting paid what you're worth and want to boost your income, start your own business online on the side! Would you be able to land the $65K salary? Dont fell bad. After 13 years working on Wall Street and getting his MBA, Sam decided to negotiate a severance package in 2012 and retire early. Here is the Federal Poverty Levels (FPL) by household size for Hawaii. So why I am here? Researchers say the ideal income for maximum happiness is $75,000. Now when I think about a B student at an average school, Id imagine that person would find it exceptionally difficult to find a job around $65K. High risk investment isnt done by average people. * The highest income that receives the maximum tax deductions. It would be such a waste of education and of life frankly. Energy is better spent on rooting out and eliminating corruption and voting for good, smart people who want government to be more transparent and efficient., Let me guess, you think thats what we voted for last time out? What is it that you are truly frustrated about? $250,000 plus $250,000 is $500,000 in household income numb nuts! People tend to see what they want to see. My magical number is a combination of 2 things; annual income and weekly hours worked. I would LOVE a nice, flat tax. I dont know that I will ever see it happen though. The only problem is, I almost always enjoy what I do. I can assure you these spending plans were not put forth by the red states like you indicate in your post. As such, one can then optimize their lives better if they dont absolutely love or at least really like what they do. They have also chosen professions that wont pay as much as what my hubby makes, but thats ok. Brand yourself online, connect with like-minded people, find new consulting gigs, and potentially make a good amount of income online one day by selling your product or recommending other great products. that said, if you are not happy today, you wont be tomorrow. My records show I spent just under $1500 that month. Related: Median Income By Age And Sex In America. He died so young without being able to travel like he wanted to it is good to save (he was ready to retire at 45 and then a huge economic crisis took it all and he was getting himself back up, so this is why I care about savings so much) but lets not forget the #1 regrets of the dying: https://www.guardian.co.uk/lifeandstyle/2012/feb/01/top-five-regrets-of-the-dying. People just choose to want to study and do what they want, and money is secondary. Compared with the federal poverty line Then I worked, I met foreigners making business there, I saw some more world, and I decided I want to have that lifestyle, too. Tell me Im reading this wrong. I dont have to worry about crime because most people in my neighborhood are also doing well. The research is revealing realities about human motivation (https://selfdeterminationtheory.org/) (https://businessinnovation.berkeley.edu/WilliamsonSeminar/ederer100109.pdf) that clash with the old idea that people base their effort upon a supposed 1.0 correlation with cash. But remember, your IRS Form 709 must reflect your option to take the five-year election. Why can they not start a side hustle? 1. How about $1 million dollars? Get a handle on your finances by signing up withEmpower. We are int he process of trading an investment condo for a primary residence now that we have found a place to settle (tried not to, but it made sense for us, right now) and will look forward to challenge myself in the next few years to meet our financial goals, while enjoying our loved ones. Here's the 'ideal income' for the typical American family - CNBC Now I can just log into Empower to see how my stock accounts are doing, how my net worth is progressing, and whether I'm spending within budget. Would definitely help as you could deduct a lot of expenses! But back to the brainwashing), We can argue about any number of psychological reasons for people to be so easy to brainwash, from a desire to fit in to the increasingly complicated world in which we live, but again, these traits can be preyed upon by any group, government or not. I would suppose that when Bill Gates sees the net worth of his charity go up by $200 million, he feels more happiness than say Ebenezer Scrooge (pre-conversion). Worse yet, Tesla, being the only name in luxury electric vehicles at the time, had little incentive to lower the price either. It only takes a minute to sign up. Take a look at the latest FPL guidelines below. Just one thought I know it is a bigger issue. These activities are pretty inexpensive. Real Estate & Homes For Sale - 9272 Homes For Sale | Zillow 11 years later, Im making more than 10x what I received in unemployment and have easily paid back that debt and then some. Each $16,000 gift basically reduces your estate value by $16,000. Before Personal Capital, I had to log into eight different systems to track 28 different accounts (brokerage, multiple banks, 401K, etc) to manage my finances. Many people trade off the autonomy for these other drivers, and it can be cold and alarmist to just look at hard numbers without appreciating the other goals. Sam started Financial Samurai in 2009 during the depths of the financial crisis as a way to make sense of chaos. The assumption is the sole provider is working full-time (2080 hours per year). If the Jones arent progressing I guess theres nobody to keep up with, might as well let off the gas? What it really refers to is that once our basic needs are met, we dont have an appreciable increase in experiential happiness due to diminishing returns, the need to keep feeding the animal to get the same stimulation, etc. If you say you want to make $65,000-$75,000 after you first full year out of college, then you will probably get a 4.0 (not a 3.7), go to a Top 10 school, and enter an industry which pays just that. And because I know youre going to ask, my NW is about $2.5M. Mark and Lauren Greutman, pictured here with their family, sit down and reassess their budget every month . Thrifty Cost-Conscious Moderate That said, once you add in state tax, medicare tax, and social security tax, you'll be paying over 50% in total marginal tax. For example, here in California, you go up from 9.3% to 10.3% at greater than $299,500 ; so that would become the ideal income. I took 8 weeks off this year, save about $85,000 in cash thanks to work, and I love work! That's right, if a family of four can earn up to $104,800 a year and still get financial help! Lets skewer the rich and take em for all they got! Thanks. Because at some point, more money and spending more time making more time isnt worth it. IMO, this was a very logically written article supported by the latest data from IRS about taxation rules for 2022. Besides, marginal income from stocks above $6,300 is taxed at 42% (below 6,300 is taxed at 27%). It takes into account all the deductions and credits. Every January, the United StatesDepartment of Health and Human Servicespublishes its annual Federal Poverty Level (FPL) guidelines. I dont think there is a magic income number; sadly, magic doesnt seem to exist in our world. Thanks. Therefore, you have enough money to live comfortable and you have time to enjoy your life. I think the government has to create that 200,000 number so they can villainze the rich and then get more money from them because those bastards dont deserve all that money and need to share! If every kid has their own bedroom, their own car at 16, a college fund, you'll want to be making a household income of at least $180k in today's dollars. Your midwestern states comment is also interesting with the most populous (blue) urban cities in the region like Chicago and Detroit really doing well. Ideally? What I mean is those who've tried to make more money but failed and use the phrase as an excuse, and government-funded researchers who continue to try and prove the theory over and over again. The amount of money you spend upfront to purchase a home. This post will discuss the latest Federal Poverty Levels (FPL) by household size. You know, the ones that people are leaving in droves? Whos more likely to be happy, a person with a high cost lifestyle, including a $1 million mortgage, and a $200,000 job he cant leave, or a guy who runs his own business, has $100,000 bankroll, no debt and an income of only $50,000? Happiness really isnt about money. Trust me, your happiness will increase the closer you get to $200,000. Im coming from a little country where people speak about money as something dirty (although everybody wants to have). Money is required to satisfy ones living requirements but happiness is more holistic. Related: What Income Level Is Considered Rich? Please be aware there are still ongoing talks withJoe Biden and most Democrats about increasing income tax ratesandcapital gains tax ratesfor 2022. I recommend using a free financial tool like Personal Capital. Do you want to see what life looks like when people dont pay taxes? Usually that starts kicking in around 200k single/ 400k married, Jealous! Having only one job in this internet day is not good enough. Yet, because we make more than 400% of FPL, we get zero subsidies and have to pay more to subsidies those who make less. Id argue HoH filers need this information more than anyone, as we are the ones trying to raise kids on truly one income! It doesnt account for the type of happiness/pride/satisfaction when looking back on our achievements, which great wealth can give. Trust me on this! get to that number(200K)? Numerous studies all provide conflicting data and utilize a wide array of assumptions. If the person cant be contented even though he is already getting the enough income to nurture himself, then it would be higher. Still a fan however. For the longest time, I thought the government was sexist because they don't provide an equal amount of deductions or leeway once a couple gets married. However, for those children and adults earning under the standard deduction amount, they get to contribute tax-free as well! It used to cost a fortune and a lot of employees to start your business. If men were angels, we wouldnt need government. - Lot / Land for sale. Is that inclusive of your 25% VAT tax or is that Income only? Explain why Im not happy? I dont think Ive worked less than 50 hours a week EVER! I tried my hardest to get straight As one year in HS, and one year in college, the closest I came was a 3.85 out of 4.0. why? Also, its hard to have perspective on how great things are in Denmark if thats where youve lived and work all your life. I think you had a bad day and totally misunderstood the article. You may also have a high deductible, depending on if you get a bronze, silver, gold, or platinum plan. HA! The Federal Poverty Levels by household size should continue to go up each year due to inflation. I dont think this is true. Although America is one of the richest countries in the world and making over ~$38,000 a year puts you in the top 1% of earnings globally, there is still poverty in America. I am lucky enough to be able to support him even though it takes from other goals and dreams. Interesting thoughts, as always, Dr. Sam. Great article. Your decisions are yours alone and we are in no way responsible for your actions. agreed with the validity of the premise i can easily believe it. Rich people are bad people because they educated themselves and worked hard! I felt good about paying every penny of that because I know the majority of it contributes to the society that allows me to continue making money. Management consultants make about $85-100,000 their first full year etc. 70 Cole Creek Way, Franklinton, NC 27525. I can focus on my hobbies, travel around the world without silly restrictions and utilize my time on other fulfilling activities!!! Guess what? Today there are obviously some programs that cannot just be killed right off the bat (SS, etc), so there would be a lot of disruption to drop spending too quickly. The salt tax deduction is a handout to the top 1% elite. a greedy, money-grabbing bastards), Your email address will not be published. I am the most educated of all of my siblings and most likely make the least amount of money. Sam, it would be interesting to also have the tax tables for the state taxes and see if the ideal incomes still hold. Different people can live with varying standard of living.
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