Saving For Retirement

by L

Americans Aren’t Saving Enough for Retirement, but One Change Could Help

The likelihood that most Totebaggers will run out of money in retirement is lower than average. Are most Totebaggers natural savers? What do you think the best strategy would be to help (or coerce) more Americans to save more for retirement?

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246 thoughts on “Saving For Retirement

  1. I’ve been wondering what will happen if too many people become buy-and-hold indexers. Who’s going to hold the Board of Directors accountable?

    I was reading something the other day, but I can’t find it now, asking this question. It said that about 12% of stocks are held in index funds. The fund managers can, in theory, vote on behalf of their shareholders, but they tend not to. One reason that they may be reluctant to do so is because they want to continue to be the 401(k) provider for the company.

    What do the finance and business types here think?

  2. If it were up to me we’d default everyone into what I’d call a variable pension. It would consist of a low cost index target dated fund that converts to a single premium fixed annuity at 65 funded at a default rate of 8% of income. For someone making $30k a year $200/month for 43 years at 6.5% would convert to a monthly pension of $3,056.

  3. My parents (born in the late 20’s and early 30’s) saw the insecurity of elderly people before social security was avaiable or in its infancy. This “fear” of that insecurity in their later years caused many to save or at least to view the “forced savings” of their pensions and social security as a positive thing.

    Most of us growing up saw the retirees of a more secure time of social security and wide-spread pension plans – both forced savings at certain rates. This next major group of retirees who are relying on social security and 401Ks, Roths, etc. where they could control (and often have very low) contribution rates, will IMO be more financially insecure. How, as a society, we handle this group who has not saved enough will determine how the next group responds – either again from fear they save or our structure changes to support those who are not prepared requiring them to do nothing.

    As a society, we no longer seem to have the fortitude to make people live with the situation they created vs one that happened to them. I am not hard-hearted, but we tend to save people from themselves which results in less responsible behavior.

  4. So I am of 2 minds about this: I think Rhett’s solution is good, but what about a guaranteed income for everyone at a certain level? We could simplify taxes and forced savings all at once!

  5. Who’s going to hold the Board of Directors accountable?

    If too many people start holding indexes then inefficiencies will exist that active managers can exploit. I’d argue the system would be self correcting.

    Think of used cars as an example. It’s 1992 and everyone is saying buy a gently used Honda as it’s such a great deal. Well, what happens when everyone takes that advice? The price of gently used Hondas rises until they aren’t a deal anymore. Similarly, If too many people buy indexes because they are such a deal, they will become less of a deal.

  6. No, not really a natural saver at all but I read Millionaire Next Door when Dh and I were first married and as a result we started maxing out his 401k. I also have a pension which I vest in in 3 months (not that I’m counting). We have automatic withdrawals for kids’ 529 accounts. We need to beef up our cash and taxable accounts and plan on doing that this year and next. So the key with us and most people is just to make it automatic.

    Our parents have very low retirement account balances. Mine will be ok with social security but DH’s parents are a financial mess. We’re worried about it because we don’t have the extra funds to step in. His parents owned their own business for a long time and had some IRAS but cashed them out here or there to pay for things. Sigh.

    I think companies should have some sort of sliding scale of contributions based on salary in which employees are automatically signed up for. You make $30K, maybe 5%, automatically increasing contribution with each raise. $40K, 8%, $50K, 10%. For people like our parents who own their own businesses, I don’t know what you do…

  7. For people like our parents who own their own businesses, I don’t know what you do…

    They would have to contribute 8% as well.

    Keep in mind, my variable pension would have nothing to do with your employer. When you were hired you’d just give the account # to HR and they’d direct deposit the money just like they direct deposit your paycheck. For the self employed, they’d set up an account and they would need to confirm when they filed their taxes that X% of their income was deposited into their variable pension account.

  8. Rhett – so the self-employed pay both sides of FiCA, and 8%? I could see some moaning about that one.

  9. I agree with Temp Handle. The previous generation relied to heavily on the promise of social security that was dangled in front of them like a carrot. Even though the news regarding the social security system is bleak and anxiety producing for some, it at least forces people to take a look at their future and chart a course.

  10. Rhett – so the self-employed pay both sides of FiCA, and 8%? I could see some moaning about that one.

    Why, it’s going into their own pension account? If they are really bothered by it they can opt out.

  11. Atlanta,

    Also, the rate might not have to be 8%. For someone making $30k 4% would yield $1500/month in retirement income, added to SS that’s a vastly more comfortable retirement that just SS alone.

  12. I have a co-worker who is in her 30’s. She can’t afford to live on her own (asst professors in humaniities don’t make salaries that go far here), and she is Italian and family oriented, so she lives with her retired dad who is also struggling financially and a very old grandmother who had savings but is burning through those savings because of health problems. I suspect we will see more of this in the middle and working classes as time goes on.

  13. Rhett – I don’t disagree with the premise. My dad and husband’s parents would be a lot better off if this had been forced on them. I’m just remembering my dad having some lean years and he probably would have needed to adjust his percentage depending on the year. My in-laws made plenty of money, they just didn’t save it, so this would have been perfect for people like them that just don’t have the self-control to save (which I’m guessing is a lot of Americans). But then again, they may have opted out anyway.

  14. I’m just remembering my dad having some lean years and he probably would have needed to adjust his percentage depending on the year.

    That’s how people get into trouble. The key to my plan is you can’t go below X% and you can’t take any money out before you’re 62.

  15. Taking money out because of financial problems is another huge problem. A co worker at another place I worked told me he had little savings because he had been laid off during the dot com bust, and it took him 3 years to find another job. He burned through a lot of savings in that time. He was in his mid 40’s, with one kid in college and two more in HS, and trying to rebuild. WIth so many people out of work for so long in that recession and the more recent one, I suspect there are a lot of people who had started out saving, and then had to pull money out. WHat is the alternative? There isn’t much safety net for the unemployed

  16. they just didn’t save it, so this would have been perfect for people like them that just don’t have the self-control to save

    That and an equally big problem is people are terrible at investing. Pouring money in at the top and panic selling at the bottom. And, if I recall your in-laws story, they did save and invests they just used their savings to “invest” in their failing business.

  17. I’m just remembering my dad having some lean years

    And, isn’t that the story of everyone who didn’t save enough? We didn’t contribute because we were saving for a down payment, a wedding, daycare, I decided to stay home when the kids were young, we needed a new roof, hubby got laid off, just as soon as the credit cards are paid off, etc. etc. it was always something.

  18. Timely. I have a call today with a financial planner to talk about tax beneficial retirement savings options, now that I have left my large company. He came highly recommended, and I had high hopes, until during our first call he put the strong sell on me to set up 529s (this is how we parted ways with our last financial planner 8 years ago). So now I will go through the motions for this call in an hour, but I’m dismayed that this is so complex to figure out.

  19. Lark – why don’t you like 529s? Not trying to set up a fight or anything, just curious. :)

  20. I’ve been meaning to submit a post on universal basic income for a long time. It’s a topic I’ve been increasingly interested in as I read more about machine learning and self driving cars. L, your comment reminded me of that

  21. “A co worker at another place I worked told me he had little savings because he had been laid off during the dot com bust, and it took him 3 years to find another job. He burned through a lot of savings in that time.”

    I think you still have to pretend that it’s not there. The balances are protected from bankruptcy judgments, iirc, and I think people would be better off if they took advantage of that consideration. Sure, it’s hard to be unemployed, but if you have your retirement accounts, at least you have something off to the side that’s still growing for the future. If you spend that down and you still don’t have a job, you’re going to be a lot worse off. If leaving the account balance alone means that you lose your house, so be it.

  22. I have nothing against them at all, but our finances are structured around paying off all debt by the time our oldest is a high school senior. Then, we should be able to comfortably afford college out of general cash flow. And if we can’t because something unforeseen and bad has happened, I’d rather be in a position of having a paid off mortgage and kids going to a less expensive school than be in a position of plenty in the 529 but struggling to make mortgage payments. So I don’t really see the point for us.

  23. But once you lose your house, then what? What are the rules for collecting welfare if you have retirement savings?

  24. I’ve got an appointment to talk to a Vanguard CFP in a few weeks. I’m also going to set up a meeting with a TIAA-CREF CFP just to compare. My “personal banker” or whatever he is at Vanguard warned me gently that Vanguard has a new service where they manage your money for you for .36% annually. I’m highly unlikely to use that, but it does mean I’ll have to be patient and persistent in my “No, I don’t feel like just giving away .36% of my annual returns, but thanks for asking”.

  25. If leaving the account balance alone means that you lose your house, so be it.

    Then where do you live?

  26. “Then where do you live?”

    you live wherever you would live if you had no retirement account balance.

  27. “No, I don’t feel like just giving away .36% of my annual returns, but thanks for asking”.

    It’s a lot worse than that. It’s not .36% of your annual returns, it’s .36% of your total balance, annually. Which, of course, is still a lot cheaper than what most advisors are charging.

  28. Milo,

    While most programs exclude some “illiquid” assets, such as a home or defined benefit pension,many other liquid holdings, such as defined contribution retirement accounts (e.g., 401(k)s), health savings accounts, education savings accounts (529s and Coverdells) or individual development accounts, often count against the asset limits.

    That seems to say they aren’t excluded in many states.

  29. you live wherever you would live if you had no retirement account balance.

    I see you’re point. If you need to move the wife and kids into your inlaws basement then do it. But, I’m sure you can see that it’s easier said than done. It would be a lot easier under my plan when the balances are untouchable until you’re 62.

  30. I like to spend like the other shoe will be dropping very soon. I cannot get my head around people who live like all this money will just magically keep coming in. Might/might not.

  31. You live in all the places people who lose houses normally live: rentals, family, etc. Someone who can’t make their $1200 mortgage payment isn’t necessarily on the path to homelessness — they are on the path to an $800 apartment. One of the best arguments I have heard for discouraging home ownership among the lower middle class (or more accurately, not encouraging), is that you can much more easily adjust your cost of living if you rent. Lose your job? No employement in the area? Move some place cheaper.

    In my limited experience, I think people who dip into retirement savings during the lean times do that instead of doing more fiscally responsible changes – taking a job that pays less, cutting back on housing costs, moving to a place with better employment opportunities.

    I think the Universal Basic Income idea is fascinating. I feel like it is one of those things that, on the surface, is repellant to so many people that it may never gain traction. (I recently told my pull-yourself-up-by-the-bootstraps-mother about this, and she was horrified. “Paid for doing nothing!!!” But then we talked about all of the ways this could simplify entitlements and actually keep people from gaming the system, and she turned around pretty fast.)

    Lark, you can always remove money from your 529 without penalty to pay your mortgage, but you would owe tax on the gains.

  32. RMS – I have an appt with a TIAA-CREF guy next week. In up front conversations with the guy at the call center to set this up, I am expecting them to (also) give a big push for us to gather all our other outside assets there (i.e. our two rollover IRAs, our taxable account). They finally woke up after all these years of running 403b plans for colleges/universities and seeing people retire with large sums saved up over many years move that money to Vanguard/Fidelity/Schwab, etc. once they left their employer. There’s lots of money to be made for just holding the assets, even if they don’t “manage” them for you, and now they want their slice of that pie.

    Based on post by Meme a few months back, I moved my rollover IRA to the brokerage arm of bank we have our checking acct with. They are trying hard to provide rewards for being a “big” depositor under the bank’s umbrella. It wasn’t very much to be in the top tier, not costs to me, and I still manage it online like I did at Fidelity. And, also like at Fidelity, if I want to talk with someone in person there are several local offices of both the bank and the brokerage I can go to.

  33. Milo said “you live wherever you would live if you had no retirement account balance.”

    I am not following. When you get to the point of retiring, and you have no retirement account balance, you still have SS.
    From the point of view of a dad with kids who has been out of work for 3 years, with a wife working a lower skilled job so she isn’t making enough to keep the house, it makes sense to take out the money. If he eventually finds a job, he can start to rebuild the savings, he has kept the kids in their house, and retirement is far away. And should he make it to retirement age with no savings, at least SS will kick in.

  34. Mooshi – If you’re already close to retirement age, and you’re OK with retiring on SS alone, then sure, spend it down.

  35. Lark, you can always remove money from your 529 without penalty to pay your mortgage, but you would owe tax on the gains.

    Yes, but given our excellent state schools, we are also in danger of over-saving, and then we’ve had cost of the interest we’re paying. And to be completely debt free by the time oldest is a senior is pretty damn attractive. So I’ve just never seen how the possibility of a few extra thousand in gains – if you time it all right and politicians don’t take away tax benefits, two big IFs in my opinion – outweighs the benefit of no debt. And yet all financial planners seem to want to do is set these up for us. I honestly don’t get it.

  36. Mooshi – totally disagree. In that situation they should set a timeline for when they put the house on the market – 6 months? 1 year? when they would get below a certain level of cushion. Then sell the house, move someplace cheaper, before taking anything out of the retirement accounts.

  37. “From the point of view of a dad with kids who has been out of work for 3 years, with a wife working a job that alone wouldn’t be enough to keep the house, it makes sense to take out the money. When he eventually finds a job, he will start to rebuild the savings, and meanwhile he has kept the kids in their house, and retirement is ~20 years away. And by being aggressive with retirement savings he will make it to retirement age with that plus SS.”

    I made some edits to MM’s post to make it more reflect my world-view in 2004.

    Maybe better to be lucky than good, but things seem to be working out ok at this point. I am comfortable with the actions we took; limited disruption for the kids was definitely a positive.

  38. I cannot get my head around people who live like all this money will just magically keep coming in.

    I don’t see it either but it’s what makes the world go around. We have friends who make $130k and just bought a house, then had a kid who is in daycare and are pregnant with another kid. Between the mortgage, student loans, daycare for two kids, they aren’t going to have a nickle to spare for a while. I think if you look at the “average” married 27 year old couple with a new baby and a mortgage they are in a similar situation.

  39. Incidentally, my boss just left early to head down to the Outer Banks to spend a week getting their house ready for the summer rental season. This guy likes his toys: two boats, an F-250 to tow them, and a new 5-Series.

  40. We’ve saved enough in our 529s to pay for 4 years of state school for our 2 kids. If they need additional funds, we’ll pay from cash flow or savings. If they get scholarships, the 529 funds will be used for grad school or grandkids.

  41. We could move to Zenda, KS and buy a house, but we wouldn’t be able to find a job. I and two other acquaintances (both men from rural Kansas) were talking about the challenges of obtaining medical care for 70-ish parents in rural areas, both the travel costs and the fact that parents have little or no savings, due to low lifetime income.
    http://www.realtor.com/realestateandhomes-detail/202-E-Avenue-A_Zenda_KS_67159_M82739-95831?row=6

    All of us know we’ll never go back to where we’re from.

  42. OT – I think the best way to get people to save for retirement is for employers (all: gov’t, not-for-profit, private) to auto enroll new employees in the 401k/403b plan at a minimum of 3% or whatever maxes out the employer match, and then have that 3% increase 1pt for every subsequent salary increase, whether that be an annual raise or a promotion, until the person is maxing out the annual amount (2015: $18k age 50, I think). Done this way, the employee will never really ‘feel’ the savings ‘loss’. Require a notarized opt-out form be completed. Just the notary requirement will stop a lot of people. The employee and employer contributions would go to an age-based target-date fund from a low-cost provider (certainly <1%, but the goal should be <0.5%)
    Self employed is a bit tougher, but I think a similar mechanism should be established.

  43. You don’t have to move to Zenda. You could move to Idaho Falls….

    http://www.realtor.com/realestateandhomes-detail/2780-E-Lincoln-Rd_Idaho-Falls_ID_83401_M11273-35223?row=5

    Perfectly adequate for family of 4, schools compare favorably to Westchester. 95k, 0.6 acres AND A PLAYHOUSE!

    INEEL provides a lot of high tech employment (there are currently 46 open positions) , and there is always the local university and/or health care.

    Point being, there are many low-cost areas of living that have jobs.

  44. Also, we may be conflating low cost of living areas with rural areas. Idaho Falls is low COLA – and rural by an east coast standard. But you can get all your joints replaced at the local hospital, with likely easier parking than you would have in Boston.

  45. Milo,

    Here is something that’s struck me. In terms of friends of the family that have retired (middle class to very upper middle) it seems that everyone has retired into the same lifestyle they had when they are working. The couple with the cars, boats and vacation homes is tooling around Naples in a new Mercedes convertible. The middle class ones have remained in their home still middle class and everything in between. What I haven’t seen is a lot of people suffering a dramatic change in lifestyle upon retirement.

    Obviously, with a sample size of 7 couples it could just be an inaccurate sample.

  46. Rhett – I am seeing the same in my parents’ friends who are retiring. Several of them have sold their “in-town” home and live full-time at their lake place. My parents are debating whether to keep their “in-town” home close to friends when they retire, or to move closer to their kids and grandkids.

  47. My employer does automatic enrollment into a 401K, but it is at like 1%. You must sign forms to opt out. Most people don’t opt out, but they don’t increase the amount and they let it go into the default option (targeted date), which may or may not be appropriate for them.

    We saw a lot of people take the equity out of their homes when the real estate market was high. Mostly to pay for toys or fancy experiences. Now, many have no equity in their homes and owe very close to the market value making it hard to sell and break even.

  48. That’s interesting, Rhett. I suppose I would agree; I can’t think of any good counter-examples. I think my parents have allowed their spending to creep steadily higher over the years, but they’re not retired yet. Same for DW’s parents, for that matter. During the early years of our relationship, she always felt obligated to point out to me certain ways that they *never* would have spent money before. Even little things, and this sounds crazy, but I think we were engaged before I was ever at a restaurant table where we ordered a bottle of wine and the waiter went through the whole cork presentation ceremony. I had just never seen it until FIL ordered a bottle of wine.

  49. Rhett, does that surprise you? I know several couples who have done what you describe, but others, including my parents, who seem to have loosened up a bit since retiring–3 Acura cars as opposed to 2 American cars, European river cruises every couple of years as opposed to driving to see relatives and driving to the beach every year, country club memberships. My folks aren’t living the life of Riley, but it is good to see my dad enjoy things.

  50. Rhett, does that surprise you?

    Well, Milo’s 11:54 comment seemed to hint that he was expecting (hoping for) some future comeuppance. But, I’m not sure if that’s how it usually works out.

  51. Well, Milo’s 11:54 comment seemed to hint that he was expecting (hoping for) some future comeuppance.

    Certainly not! He’s a great guy, he’s about 20 years older than me, and his dw works full time, too. They should have plenty of money.

  52. I am not a natural saver at all, and neither is DH. It is learned and practiced behavior, and we still aren’t as inclined as some. Auto transfers have always been my MO to make myself save. I really believe that some of this is innate, so I don’t feel bad that it is something that I have to practice and work at. Especially seeing how inclined DS is to save. (not just money – he has incredible self-control with desserts and toys and other things that I just don’t have)

    I think just an opt-out vs. an opt-in for employer 401(k)’s is a very smart idea that a lot of companies are trying. Making it harder to withdraw or borrow from your balance might be smart too as long as it doesn’t deter people from saving. I am very thankful to this day that my parents drilled into me that I *had* to put in at least the company match amount from Day One of my career. Starting at 21 has eased a few mistakes I have made.

  53. I would also add that under my plan contributions would start with the first paycheck. Many places don’t let you start for a year and with an average length of employment in the US of 4.6 year that’s a huge drain on potential savings.

  54. Off call w/financial planner. They have good options (and did not raise 529 issue, much to their credit), but fee is 1.5% to manage retirement account. (SEP). Seems high to me. Thoughts?

  55. Lark – When all the data at this point suggests buying and holding index funds produces superior returns, I’m not willing to buy an advisor a new car every year just to manage that, or worse, to actually try to beat it.

  56. Several of my colleagues in addition to job loss due to the Great Recession went through divorce. They were forced to sell their houses at a bad time, borrow from their 401k’s, ran up credit card debt – just a boatload of stuff.
    At this point they have gotten back on track but there is no retiring early for them. They do have older kids so now they have to deal with college costs. They are dealing with the costs by taking on loans. These people are being careful but they aren’t living very frugal MMM types either.

  57. Lark,

    What was their value proposition? What did they say they would do for you to justify their fee?

  58. “I think if you look at the “average” married 27 year old couple with a new baby and a mortgage they are in a similar situation.”

    Surely when you are starting out a lot of people are under the gun, but you still have a lot of time left. I don’t get the 45 year old who is buying a vacation house they can’t afford outright when they don’t have anything saved for their 14 year old to go to college. They just think they’ll keep getting promotions and bonuses and raises etc…. I wouldn’t buy a vacation house that I couldn’t afford to lose a lot of money on. Just like I wouldn’t make any risky investments with money I couldn’t part with easily. I couldn’t sleep a wink living like that.

  59. They just think they’ll keep getting promotions and bonuses and raises etc….

    Has that always been the case for them to date? In my case I got laid off when I was in my early 20s so it’s always been something to consider. And, I’ve been self employed. But, if I ended up working for some big company and ended up making what I make now, I could see myself expecting that the future would be even brighter.

  60. Lark–don’t do it. They won’t beat the market by more than their fee.
    I deal with a lot of these guys, and mostly, it’s a scam. Their fee is on top of the fees charged by the actual investments, which are higher than index funds. And some of those investment fees actually get paid to the financial planner as well for his “servicing costs”. So it’s likely you’ll actually be paying 2% or more for inferior returns. Run away!

  61. Rhett – It may just be an optimist vs. pessimist viewpoint. I think DH’s star will keep rising but I live like it might not. Have read enough stories about well educated, well compensated middle aged dudes finding themselves out in the cold not to think it couldn’t happen to us. There are a lot of things outside of our control.

  62. Rhett – That was my parents’ excuse for many years. One subtle difference between what I think we’ve said and what Moxie just said is that there’s spending like you’re going to be laid off next week, spending like everything will be just about this good forever (maybe with normal raises, COL adjustments, and pensions vesting) and then there’s spending like one’s “star” will keep rising.

  63. That’s their fee to administer a 401(k). Long story short – left big company, started small company, now trying to create 401(k) plan for new company. Astoundingly complex. So complex, that I’ve now put it off for months and months – which is why today’s article was so on point. Figuring it out is so hard that people just give up. I see why.

    Have talked to Vanguard, who said, we don’t deal with companies with less than 50 employees. Merrill Lynch says their fee is 1.5% of assets annually (seems to me to be shockingly high). Now have call in to Schwab.

    Scheduled full day today to devote to this. Seems to have been a complete waste of time.

  64. Lark – we have had individual 401K and SEP-IRA with Schwab. They are good and fees are low. 1.5% is WAY too high.

  65. Lark – the 5 person LLC I work for uses Paychex for payroll and their 401K – don’t know if you need payroll or not. I doubt the fee is that high.

  66. It may just be an optimist vs. pessimist viewpoint

    Very true. But, before you cast aspersions, I don’t think you can separate the optimism at 27 from the continued optimism at 47. To a very large degree society couldn’t survive if everyone was always as cautions and prudent as you are.

  67. @Moxie – I know a few well compensated people who were laid off. They did OK without a job but it was very tough to land a similar position to one from which they were let go and IMO their career trajectory never recovered. Their star fell.

  68. I am a saver and have posted several times on here about how our different financial styles put huge stress on my marriage. So much that it couldn’t withstand another big stressor.

    I have started loosening up though, my new kitchen and living room are bringing much more pleasure than a higher balance in my taxable investment accounts. That said, 401K and 529 fully funded first along with emergency fund, and absolutely no home equity debt or extension of mortgage term to accomplish my ever growing list home renovation “wants”

  69. When we bought our house we were shocked at what the mortgage company said we could afford – more than twice the monthly payment range we were looking at. IF we had believed them we would have been close to losing our house when we had to scale back to one income during the recession or go into more debt to keep it. The assumption was your income would keep going up and your housing costs as a percentage of income would go down. I think that rose-colored look at the world gets many in over their heads early on.

    On the other end, I was at the CFP about a year ago and he mentioned that 20 years ago the advice was you could live on 60% of your salary (family income) for a number of reasons. However, the new reality with some people retiring earlier and most are generally retiring healthier is that retirees are not seeing a significant drop in their expenses.

  70. “To a very large degree society couldn’t survive if everyone was always as cautions and prudent as you are.”

    Rhett, you are absolutely correct. The world needs people are are willing to buy more stuff than I will. I’m just not going to be dripping with sympathy for those who failed to exercise a little prudence.

  71. Lark–Vanguard has a solo 401k product. I’d try again with them. A quick search on The Google will give you a couple sites comparing so 401k products.

  72. At one point on the Other Site, SHV asked if anyone else just kind of pissed money away on stupid stuff. Hardly anyone replied, and she expressed surprise that she was the only one, or maybe just the only one to admit it. We put everything we possibly can on our credit card in order to get the awards points. Every month I’m horrified at how much we spend. So far this month the balance is up to $7K and we have another two weeks til closing date.

    $1K is a charitable expense. $1K is the new dishwasher. $800 is the final medical expenses for the late, lamented dog. $670 is plants (we’re completely re-landscaping the back yard). About $300 is wine (obviously we need to switch to box wine). A few hundred will turn out to be business expenses for DH for which he’ll get reimbursed. Then there are a zillion penny-ante things from Amazon, and a few bucks here and there for Hulu and Netflix, and the utilities and stuff.

    You might think that it’s just an odd month, what with the dishwasher and the dog and so on, but every damn month it’s something else! We can afford it, but I keep thinking that it’s ridiculous that we spend this much.

    Is this really just SHV and me? Sigh.

  73. Also, we may be conflating low cost of living areas with rural areas. Idaho Falls is low COLA – and rural by an east coast standard. But you can get all your joints replaced at the local hospital, with likely easier parking than you would have in Boston.

    The down side is that if you have family in other places, Idaho Falls isn’t the easiest place get flights in and out of. Not to mention you have to deal with Idaho winters.

  74. RMS, it’s not just you. I’m surprised how much we spend as well. It seems like it’s always something.

  75. At one point on the Other Site, SHV asked if anyone else just kind of pissed money away on stupid stuff.

    You mean like deciding to make quesadillas and going to Whole Foods and spending $140 on ingredients for just the quesadillas?

  76. LOL Rhett. RMS, I totally spend money on stupid stuff. I had to have a shopping ban for 2 months (Jan 15-Mar 15) after I rounded up how much I spent on clothes in 2014. Yikes.

  77. @RMS – I am trying to buy less small stuff from Amazon. I stopped going to Target – don’t really need to make routine runs. As the kids have gotten older, there is less temptation to buy “cute” clothes and toys.

  78. RMS – We’re not spending at that level. Part of it is that shopping is not fun with three kids, so we only do it as a chore and not for recreation. Where we could cut back most easily would be dining out at a lot of “fast casual” places.

    Of course, stuff does come up. Yesterday I spent $900 on new tires for the van (plus an alignment and a discounted road hazard warranty).

  79. Pets can get expensive. There are some people I know who foster dogs and it seems they spend quite a bit of money every month.

  80. Rhett said “You mean like deciding to make quesadillas and going to Whole Foods and spending $140 on ingredients for just the quesadillas?”

    Guilty here. I’ve done that. Grocery stores are where I am most likely to fritter away money. That, and magazines. I try really hard not to fall into those traps.

  81. The cleaning lady is essential not just for cleaning, but as someone whose regular appointment forces DW and the kids to periodically clean up. If we didn’t have someone who was set to come over and expecting to be paid, there would never be a good time to pick things up around the house.

  82. there would never be a good time to pick things up around the house.

    Yet somehow we manage.

  83. Ada, Idaho Falls is on our list of possible places. The problem is many of the jobs there are year-long contract jobs which pay in the mid to high five figures, so not only would it be a pay cut, there is little opportunity for advancement, projects change with the R&D priorities of the administration and it’s almost an hour-long bus ride each way to the national lab. My sister had an offer there out of college. Tri Cities, WA, has more opportunities and a better commute (though lots of people end up going between Idaho Falls and Tri Cities)

  84. RMS – see above. You are not alone. I am not a natural saver. We have to save first and then limit ourselves enough to keep the balance on our credit card from going over what we can pay off in a month.

    But every year when I get the AmEx annual statement, I am honestly shocked at how much we have spent in the past year. I shouldn’t be, but I am. And then I have fun going through & making DH guess our top merchants & how much we spent at each merchant on the report.

    It is always something, and again – I am not a natural saver, and we have some things that we have grown accustomed to I suppose.

  85. If we’re talking about spending, DH just had 2 root canals, 3 crowns, and 2 cavities. I’m intentionally not adding up the costs, but it’s at least $4,000 (and we have dental insurance).

  86. Yet somehow we manage.

    I think your kids are just a couple years older than mine. When they were younger, did you have a set day of the week where it was time to put away toys and craft projects, organize the supplies, figure out what to do with the school craft projects, etc.? Or were you on top of this constantly?

    For me growing up, my Mom worked p/t, and the place was generally just kind of a mess until we were going to have “company” over or a party or something, at which point there would be a mad-dash all-night scramble to organize and clean. Fortunately, my parents actually do like to entertain, so at least things would get cleaned every six weeks or so.

    MIL was a SAHM who kept things in pretty tight order constantly during the week, and according to DW, would WOH during a lot of Saturdays so FIL would direct her and BIL in a lot of the heavy cleaning on Saturday morning, then do something fun with them.

    But we don’t have any other model that we feel confident would work for our situation.

  87. Our largest luxury is traveling. We spend a large amount on vacations. Last year was a month-long international trip. This year, skiing and NYC.

    We spend less money than average on food–we cook at home mostly, and eat a lot of vegetarian food) and kids’ activities. My kids do mostly boy scouts, which is fairly cheap once you buy all the gear, and school activities.

  88. “mad-dash all-night scramble” >>> This is EXACTLY what we do, except not all night. On Sunday when DH’s college friend came over, we spent about 30 minutes frantically putting away all the toys. The little pieces of toys (LEGOs, primarily) migrate everywhere in the house!

    Maybe Rhett is just more naturally organized than we are? :)

  89. Rocky–Try Black Box wine. We swear by the cab. There are also some great brands you can get in the $6-8 a bottle range.

  90. We put everything we can on one card to get the cash back (generally that is our Christmas budget), but yes the amount is staggering some months. This month it is summer camp payments and cat surgery (teeth cleaning and a couple extractions).

    I am surprised what the grocery bill is, but I am not the main shopper. I do sense that the 2-3 trips a week result in more “impulse” buys than once a week with a menu plan and a list did, but when you give up the chore, you also give up some of how it is accomplished. It is still in the affordable range, but rankles.

    I am giving our gym membership until July 1. If no one but me starts using it this summer, I am going to reduce it from a family to a single membership. I need to remember to ask if I can go back and forth – one in the fall/spring and family only in the summer. It isn’t a ton of money, but it would be enough to have covered 1.5 weeks of a day camp we use or one person’s round-trip airfare for summer vacation.

  91. MM, And you have never expressed a desire to move back despite the lower housing costs compared to Westchester…

    We’re spending a lot right now due to baby medical bills, tires and plane tickets to see my mom. A low credit card month for us is $1000; a high month is $4000. This includes the utilities that will take credit cards. Groceries are around $700 and we don’t eat out, other than school lunch for DS1 some days.

  92. “This is EXACTLY what we do, except not all night.”

    I’m not even joking. My mom would stay up until 3 or 4am cleaning and cooking, simply because we’re a family of procrastinators. Then she would still be doing stuff until 30 seconds before the people start to arrive, looking like Hell, at which point she’d “run upstairs to get ready.” Then come down 30 minutes after everyone’s gotten there.

    The amazing thing is that they’re really popular hosts among their circles.

  93. I clean the bathrooms every weekend, kaboom the tub and shower, Windex the mirror, Clorox the sink and toilet, swifter the floor, and scrub the bowl with the Clorox toilet wand. I have a system you see.

  94. “but every damn month it’s something else! We can afford it, but I keep thinking that it’s ridiculous that we spend this much.”

    Yes! For “fun” I just checked last year’s biggest credit card bill, and noticed that a lot of our biggest expenses were child-related (tutoring, camp, etc.), medical (not insurance covered), travel, and dining out. I’m actually surprised that Amazon and Zappos were not that high.

  95. Your kids must be cleaner with the sink than mine are! :)

    Last month our biggest expense was home (mortgage, payment on the timber land, and 1/2 of our new couch), followed closely by business services, then food and dining a distant 3rd. The latter is all business expenses for one of DH’s businesses, though.

  96. did you have a set day of the week where it was time to put away toys and craft

    Not a set day. We have the theory of the cleaning spirit or maybe it’s more the cleaning muse. When you feel it come upon you, you just need to go with it. Fortunately for us, it strikes fairly regularly.

  97. Last month our biggest expense was home (mortgage, payment on the timber land, and 1/2 of our new couch),

    Where does retirement savings fall in that list? For us it’s the largest item.

  98. Rhett – I don’t see my retirement contributions at all, they come out pre-tax. We do DH’s SEP all in one payment, usually. If DH’s contribution were every month it would be about half of the mortgage payment including both properties.

  99. Milo, your mother is the female version of DH. We’re having guests for Easter. DH and I decided what needs to be tackled between the two of us and I’ve been doing an hour or so every day. DH will wait until Saturday afternoon (guests are arriving late Saturday and staying over until Monday) and then run around like a maniac. He’s been doing this for years. I’m OK with this, except when he wants ME to drop what I’m doing on Saturday because HE can’t finish everything. In order to avoid this scenario, I will be out of the house having my hair done.

  100. L,

    It’s still an expense though. I bring this up because it’s easy to think you aren’t making that much progress when you have 50k a year going into retirement that you don’t see.

  101. Ginger – You know, the other extreme of that is MIL, who will have everything ready so far in advance for, say, Thankgiving dinner at 3 pm, but then the kids want breakfast at 8 am and she’s giving DW the side eye like “Are they going to mess up the kitchen now? Where are they going to eat? They’re probably going to spill crumbs.”

    We’ll often just go out for bagels or something in cases like that.

  102. Rhett, I thought you mentioned in prior posts that your family lives in a small home so that is why you throw everything out. I didn’t have a cleaning person when I lived in a one bedroom apt, but I don’t want to clean and dust the bathrooms and rooms that I have now. I traded the convenience of the city for the space and closets in the burbs. One trade off is that I don’t have the time (or willingness) to clean it myself, but I would cut that right away if we both were out of work.

    There was a time during the financial crisis that we cut our spending significantly because we didn’t know if we would keep our jobs, and both of our incomes were down. The one thing that helped us was that we never purchased a more expensive home. We are still in our first home so we could live on one income if necessary. I don’t love this home, but I have accepted that it is the right place for us.

    We definitely spend a lot on stupid stuff. We try to put everything on the cards because of
    points/ miles so we can see most of our spending at year end. It is high, but similar to RMS – we can afford it. I still think it is a waste because so much of the reason is due to stuff associated with our DD. Dance, sports, camp, and lots of clothes and activities. I justify it by telling myself that we only have one, but the cheapo in me knows it is a waste of money.

  103. I am all for a guaranteed income but foresee not being able to say no to people who wants food in December after blowing their yearly money on drugs or starting an internet company.

    On the other hand, Stanford announced it will not charge tuition to students from families earning less than $125K.

    Lark, some states give a tax credit for 529 contributions. Our state gives a 20% tax credit to residents on contribution up to $1k. Thus, the $5k we put into the 529 gives us a $1000 credit. The money can be spent at any university. You might Google your state to see how much money you are leaving on the table.

  104. Rhett – good point. We do have a good budget on excel that brings in our current retirement account balances, so we see those going up. It’s probably a good thing that I don’t see how much comes out for health insurance pre-tax!

  105. Among my millionaire next door and even the well to do (not wealthy) physician and lawyer friends who have retired I see a willingness to spend more freely during the early active years, because we have all watched our parents, aunts and uncles, and older friends deteriorate as they live into their late 80s and well beyond. Most have taken some steps to provide for grandchildren’s education. But most of us did not “retire” in our mid 50s still with a mortgage and the need to provide for the pre college prep, college tuitions, weddings, and other high cash flow future expenses of mid-teenaged kids, to refer back to yesterday. Most were not divorced in mid life, either. (An early divorce is not nearly as hard to rebuild from financially.) The UMC folks who do not feel that they can live in comfort and who are not forced to retire simply keep working. I have many less prosperous friends as well who do not have enough to live on and keep doing whatever work they can find, or who are retired and live modest lives in modest paid for homes.

    In the comments to Jonathan Clements’ article last week on whether index fund investors are smarter than investors in managed funds, someone pointed out that Index fund investors put the money in and forgeddaboutit. That is as much what makes them smarter as incurring very low fees.

    Idaho Falls is not on my radar if I run short on money, but that HGTV couple from Waco is so cute fixing up homes that start at 85K, so I could make sure I had really good air conditioning, and the location halfway between Dallas and Austin doesn’t look all that bad….

    Saac asked yesterday about what kind of schedule I had when my kids were in high school. First of all, we lived in the city. They rode public busses, walked or biked to school, afterschool activities and athletics. As long as there were a bunch of them milling around the house from 3 to dinner time, nobody could get into a lot of individual trouble. I still didn’t get home till 6 when I changed jobs and the youngest was going to be home alone after his day in high school, but when it became clear he had a serious girlfriend I called (pre cell phone) to let him know if I was coming home early, and took him aside and told him that I wasn’t going to give advance warning by calling anymore, and would do this periodically, so he should behave accordingly. It is perfectly possible to be aware of what is going on without sitting in the next room. There was a full house of sibs for everyone at 13-15 – the years I would be most concerned about. I left home at 16 and decided that my kids, although still under my care and legal responsibility until they left for college, at 16 needed to be able to navigate in the world, make their own choices, and suffer the natural consequences. I did not encourage them to drive. Two of them had licenses at 16 and bought their own cars; two did not drive until 20.

  106. Bathrooms are easy to keep up–I keep cleaning supplies in there and do a part when I see something. Kitchens are easy if you do them every night like you should, but I’ve been known to listen to an NPR marathon on Sat while I catch up. Picking up all the little stuff so I can run a vacuum is my downfall, and I don’t dust nearly as often as I should either.
    You guys spend more than I do, no matter where my money’s coming from. Funny thing is, my mom is startled at how little I live on (maybe she hasn’t looked at cultural geography professors’ salaries) and is always asking if we are all right, if we need more.

  107. Rhett – I hadn’t thought about it that way before, but our retirement savings is by far our largest “expense” item. Second is housing, followed by food/dining and private school tuition & child care.

    Lauren – I feel comfortable with our spending primarily because we live in an a home that is on the low end for our financial position. I can cut a lot of things quickly if needed, and we did when we had to do it in the past without much long-term harm to our finances.

  108. Thanks Meme. In light of many people’s concerns about younger kids fighting if they stay home alone, it is interesting to see that your kids watched out for each other.

  109. We spend money on travel, and we spend it on the kids’ travel. I feel pretty strongly that if you’ve psyched yourself up to spend some precious vacation days with your parents, it just adds insult to injury to have to pay for it too. My parents always paid for my travel to see them, and as long as we have the funds, we’ll pay for the kids to come to us. DH’s parents don’t feel that way at all but at least it’s not a problem for us as it was in younger days. And then we get socked with stupid restaurant expenses because the kids like to eat out at nice places as long as it’s on our dime. New Year’s Eve cost us $500, and I don’t think I’m interested in spending quite that much on dinner and drinks for four in the future.

  110. come on Rhett. The reason I spend so much time watching HGTV is because I could never afford to live in the type of home that I want to have as long as I live NY metro. House/apartment envy is a problem I’ve had for almost half a century so I’m used to it.

    I did tour a real Westchester mansion today as I am looking for spaces for a large party. It was beautiful, but I definitely would go all new, or recent construction if I could afford my dream home in the tri state.

  111. Rocky – you are not alone.

    Houston – your comment “We spend less money than average on food–we cook at home mostly” does not ring true for us. (1) we’re not vegetarian, so that’s part of it but (2) is we just buy what we want at the grocery store. Our AMEX annual report shows big spending even though two are away at college.

  112. I could never afford to live in the type of home that I want to have as long as I live NY metro.

    I honestly wonder why we don’t see more total tear downs by people like you. You’re very rich; you already own the land. If I gave you a plot of land out in the country, I can’t imagine that it would cost all that much to build a new construction house from scratch just the way you like it. I envision you bringing in the wrecking ball and having something like this built. Scroll down to the first picture of the author’s ideal house:

    http://www.joshuakennon.com/mail-bag-what-would-you-do-if-you-woke-up-with-10-million-your-existing-knowledge-but-no-other-assets/

  113. A lotof towns in the NY metro area forbid teardowns, or make it really hard. There were a lot of teardowns in my town until about 10 years ago, when the town made it far more difficult. Honestly, it was for the best. My town has a lot of character and lovely older houses. The things that were being put up in place of the pretty old houses were ugly, ugly, ugly, And since the lots are small, people were building UP, resulting in these beige things that kind of towered over everyone else’s yard

  114. The house in the photo is actually not bad. It could fit in our area. That wasn’t what people were building, though, when they did teardowns

  115. A lot of towns in the NY metro area forbid teardowns, or make it really hard.

    Of course, if the place happened to burn to the ground one night, well, then they’d have to allow something to be rebuilt. Not saying to make an insurance claim, as that would be fraud. But things happen all the time–you leave the stove on or get some faulty wiring that shorts. Just sayin’…

  116. MM – The beige boxes were all over our beach community when we rented. Three stories tall, and they’d go within like five feet of the property line on all sides.

  117. Our shed collapsed in the last snow storm (it was in very bad shape so no suprise), and we are going to have to get a variance and permission from all the neighbors before we can put it back up. Sigh.

  118. Meme – Waco is a unique place. I think you’d prefer a burb of Dallas or Austin over Waco.

    Rhett – We think of money towards retirement as a reduction of income, rather than an expense. What that means is that we only think of our income as that money after retirement savings has been taken out. Mentally, that makes the money untouchable. It does make us feel “poorer” sometimes, but better now than after retirement.

  119. Our shed collapsed in the last snow storm (it was in very bad shape so no suprise), and we are going to have to get a variance and permission from all the neighbors before we can put it back up. Sigh.

    This is just the Westerner in me, but I could never live like that. My property, my choices. If I want to put a 10-foot-tall Buddha in the backyard I’m by-god going to do it.

  120. If I want to put a 10-foot-tall Buddha in the backyard I’m by-god going to do it.

    What about your neighbors putting one in their front yard?

  121. No, even that house is not bad, More like this, but picture the neighboring houses as well tended Tudors

  122. MM — Aren’t you grandfathered to replace it with a similarly sized and positioned shed? I thought that’s how the ordinances usually worked.

  123. Rocky, but I thought neighborhood associations, with all their rules, were big in states like Colorado. At least we don’t have neighborhood associations

  124. No grandfathering if you have to replace the structure. We could repair it but not totally replace it

  125. lol! Great picture, MM. Always a two-story entrance, often with “mawble cawlumns”.

  126. I like the steps to the porch and the ballusters for it, and I like how the sidewalk just ends right at the slate/paver driveway / motor court

  127. Mooshi, the houses that were rapidly replacing tear downs in our old neighborhood, but worse. Less architectural detail around the entrance, front windows not so big, side windows very time and high up (they remind me of the slits for marksmen in old castle walls). Generally 2500 sf. I can’t tell you how big the lots were, but a very small swimming pool generally filled up the backyard. They weren’t beige boxes; they were those horrid fake Mediterranean colors.

  128. We have an HOA, but it doesn’t do anything.

    I think front yards should have a six-foot Buddha limit. So obviously I’m just playing with moving the markers.

  129. Yes, definitely a Virgin Mary or Trevi fountain is needed. Those are both popular here

  130. My Swiss dad fought with local govt for 2 decades to change the way their house & storage space (for his business) were set up. They lived in it for 5, maybe 10 years, and then he retired and they moved to a smaller house their son built for them right next to his. i think he’s still glad to have done it.

  131. I am just now realizing that I’m not even aware of the current amount we set aside for retirement. I always know my SEP IRA limits because they are calculated to max out annually. (And after our last discussion I’m going to look at 401k options for me for next year because I think I can put more away like that.) My DH maxes his out.

    I will admit that we were *totally* those 27 year olds Rhett described earlier. We weren’t oblivious, but we considered it a calculated risk. DH is in a field where, at least in the early years, there were “lockstep” raises, and he was in a highly sought after specialty. If he’d lost his job and we had to deal with downsizing, so be it. So we moved into a house we could barely afford and a couple of raises later, we were ok. Then we had 3 kids. Daycare ate up a lot of the raises that came then, but other than daycare, we didn’t really increase our spending, and instead we saved more and more as money freed up. Now that kids are entering school and childcare costs are going down, we’re putting more and more money away. After refinancing, we have significantly lower mortgage costs that match the price of much smaller apartment rentals in our area. The lifecycle of legal jobs is that DH & I are looking at various plan b options if he does not make partner. We knew the “gravy train” years wouldn’t be forever!

    My dad, on the other hand, never made big money, but somehow had already saved more than six figures by the time I left for college. He recently retired, but he was always very thrifty, and he was the one who encouraged me to save *something* starting from paycheck #1 and taught me about interest.

  132. “Not to mention you have to deal with Idaho winters.”

    Not necessarily a bad thing. Idaho falls is right between two great ski areas, Sun Valley and Jackson Hole.

    WCE, it’s also not far from Pocatello. Back when I worked in the industry, there were a number of semiconductor companies in that area, including some foundries. Are they pretty much all gone now?

  133. Our largest expenses, aside from retirement + 529 @ >15% of gross:
    Basic Housing (P+I+T+I+gas+electric+water+trash+snowplow+lawn service) = 23% of gross…dropping to 15% in 18 short months when the P+I part is done!
    Transportation (Cars) is next…1 payment @1%; insurance (4 drivers, 3 cars); gas/maintenance = 13%
    All food/drink/household staples: grocery, eating out (not much, but I am the bigger culprit here as I have little willpower when I’m out e.g. doing errands and I’m hungry). Home cooking = eating very well for us, so the biggest downside to doing it ourselves is the cleanup. Probably close to cars, but not that high.
    Private HS for 1 = food cost
    Two in college…tuition/room/board/books covered from savings, mostly, but the one who has a shared house just charges his groceries and we pay out of cash flow
    Then all the rest: clothes, travel, housekeeper (not in the above…clearly optional), medical/dental, cable/internet/cell phones etc etc etc

  134. Finn, after poring over Consumer Reports, we got a Kenmore Elite. In stainless steel. DH admitted that using “it comes in bisque” as the sole criterion for buying appliances would ultimately end in tears. And yes, I paid to have it installed and the old one hauled away. No one at church would have done that. They’d have installed the new one and maybe replaced the motor in the old one themselves and then maybe sold it or given it to a relative. That’s why their monthly expenses are less stupid than mine.

  135. As long as we’re talking about major expenses, did anyone mention taxes? That’s certainly our biggest expense.

  136. Now, all joking aside though, which house would you rather live in? mooshi’s Mediterranean McMansion or that tired little 1960s Cape next-door?

    I think my vote is obvious.

  137. So afraid of being that couple Rhett describes. We max out retirement, but DH keeps upping the budget for a house. The problem IMO is he is surrounded by the people at his job who have “made it” and expects his career trajectory to mirror what he sees. What I think he is missing is all those people you don’t see who had an unlucky break. It doesn’t help that mortgage companies give you an absolutely outrageous number of what you can qualify for. Personally I wouldn’t be comfortable at more than half of that amount, but it has anchored DH’s expectations much higher. And in his mind, he’s still at the age where comp goes up quickly so we have nothing to worry about. I’m the cautious pessimist I guess.

    We’ve agreed to mostly table the discussion for another year and see how things play out career-wise.

  138. Funny thing is, my mom is startled at how little I live on (maybe she hasn’t looked at cultural geography professors’ salaries) and is always asking if we are all right, if we need more.

    I don’t she needs to look up how much unemployed cultural geography professors make. It’s pretty intuitive.

  139. Lark, we’ve taken a similar approach to college savings. We plan to have our mortgage paid off before firstborn is out of HS, and plan to pay most of his college expenses out of cash flow, redirecting what had been going to mortgage and tuition to college expenses.

    As everyone here probably knows, I’m hoping he gets a lot of financial aid, and this approach may make him eligible for more. For schools that use FAFSA, my understanding is that they don’t look at home equity.

  140. Rocky, but I thought neighborhood associations, with all their rules, were big in states like Colorado.

    We made sure to buy a house in a neighborhood that doesn’t have an HOA. I can’t stand them.

  141. “As long as we’re talking about major expenses, did anyone mention taxes? That’s certainly our biggest expense.”

    Excluding savings, we pay more in taxes than all other expenses combined.

  142. On Taxes as a % or revenue….Combining federal, state, fica, medicare taxes + property tax…these are the things I have readily available records for (vs, e.g. sales taxes or taxes embedded in gasoline purchases, cell phone bills)…that’s probably our #1 in aggregate if it’s taken out of the housing costs.

  143. Rio, what’s happening in your discussion of neighborhood/house size?

    Milo, I’d rather have the little one and use the rest of the money to repair/remodel, catch up on deferred maintanence and personalize it just for us. The big box has room for everything, but I doubt there’s much character in there.

  144. Milo,

    I’m not sure that’s the choice. It’s between tear down where the #1 goal is square footage vs. a reno where the budget goes more to architectural detail, interior finishes, etc.

  145. Saac- the gist is that he agrees we need more space and so wants to just up the budget and buy a bigger house in the dream neighborhood. But I’m uncomfortable spending that much either now or any time in the next few years. So kind of at an impasse for now. Hopefully I’ll update more later when we’ve made some progress.

  146. Milo,

    Speaking of that did you see the recent House Hunters where they were looking at homes in the $3 million dollar range in Pacific Palisades? I’m always surprised when expensive homes are so haphazardly decorated. I just can’t wrap my head around it. Did you buy too much house? Do you just care about the outside. Are the random bits of furniture you’ve accumulated the look you were going for? I just don’t get it.

  147. “About $300 is wine (obviously we need to switch to box wine).”

    I recently made a decision to try to only buy beer in cans, because locally, disposal of bottles has become a problem. No one here can recycle them, and the cost of shipping makes recycling elsewhere impractical. OTOH, there is a ready market for aluminum cans. It also helps to have recently discovered Kirkland Light, which is cheap, comes in cans, but is very palatable.

    I haven’t figured a way to avoid the wine bottles. Maybe we should buy our wine in boxes too.

  148. “Groceries are around $700”

    That’s about 50% more than we spend, for 50% more people.

    OTOH, I’m guessing you don’t find $8/gallon for organic milk ($5/gallon for non-organic) to be cheap.

  149. Rhett – yes! He was the car buff who was worried that his cars would scrape on the driveway curb, right?

    I’m forgetting if I told you about going to the March Madness party at my neighbors’ house, or if I just gossiped to my Mom about it. These people moved out from Meme’s old area and bought the 8k sf foreclosure. They would be the kind of people you’re talking about. They’re very down to Earth, a little too much so, you might say. They’re just still in shock about how much space their money could buy.

    It’s a little like the way economic times change, but people take some time to catch on (like with used cars). Square footage is dirt cheap; furniture to fill it all is still relatively expensive, but a lot of people still operate under the subconscious mentality that the front facade and the total size is an indicator of success. I’m not totally immune, either.

  150. Our spending would probably strike most as outrageous and I can relate to something always coming up. Our Amex bill is regularly larger than our mortgage. We’ve been lucky that we’ve always made a decent amount so we can still save. RMS – DH’s wine spending is often 2 or 3 times your figure, so don’t feel bad. Some of his bottles have appreciated quite a bit so I guess we could sell them if we ever had to.

  151. Finn, I remember your grocery comment and am impressed, because I think I’m a reasonable grocery shopper. Perhaps milk is less here but fruits/vegetables are more, or perhaps you don’t eat meat?

    I don’t want to work at the foundries in Idaho- they are not known for treating their workers well. My colleagues and manager let me go to the bathroom while pregnant as much as I want. http://www.oregonlive.com/beaverton/index.ssf/2014/12/pregnant_worker_fired_from_bea.html

  152. Milo,

    I also think there is a big difference between committing to a $10k/month mortgage payment and committing to $100,000 in new furniture in terms of SES.

  153. Thanks for all the 401(k) comments. I’ve reached that dangerous point of decision fatigue + lack of fundamental interest, so time to hand the laboring oar over to a colleague to take it from here. But we definitely won’t be doing the 1.5% folks.

    By the way – if any of you have not listened to “Start Up” (podcast) it’s excellent. And a microcosm of my life over the past year.

    Happy Easter all.

  154. Rhett – pharm sales.

    I agree. And it’s not so easy to amortize furniture over 30 years.

  155. Milo,

    I heard financial advisor* and his wife owned a credit card processing company.

    * you can see where Lark’s 1.5% would have gone.

  156. Back to the OP:

    “Here is something every non-rich American family should know: The odds are that you will run out of money in retirement.”

    That’s in interesting definition of rich: enough wealth to not run out of money in retirement.

  157. “On the other hand, Stanford announced it will not charge tuition to students from families earning less than $125K.”

    I wonder what the effective marginal “tax” rate is on a family that makes 250kish or so in a high COL area between local, state, and fed taxes and tuition between 125k and 250k. In other words, if one spouse is earning 60 and the other 190, is there even any point for the lower-earning spouse to work? Especially if there is daycare for younger siblings required.

  158. if one spouse is earning 60 and the other 190, is there even any point for the lower-earning spouse to work?

    The 60k comes in handy when the 190k goes away unexpectedly.

  159. I hear that comment frequently about whether it is worth it to keep working if childcare costs more than pay. The problem is that it can be short term planning.

    I have a friend that worked very part time and she wasn’t covering child care. Her husband was arrested for white collar fraud. She ramped up to full time and her career soared. She would have struggled to get a job if she had been out of the workforce.

    In certain situations, it can be better to keep working even if it doesn’t make financial sense in the short term if the barriers to re entry in the workforce are too high, or if a spouse is an industry without stable employment.

  160. “Our Amex bill is regularly larger than our mortgage. ”

    I’m not sure what that says. I sort of recall seeing some Property Virgins episodes in your general vicinity where they were looking at properties in the high 5 figures to low 6 figures, which left me with the impression that real estate was relatively inexpensive there, and thus your mortgage payment might not be very high.

  161. Speaking of thriftiness, I got a call at midday from the auto shop that my yearly check up and inspection yielded another 1K in repairs. A lot of hoses and belts on the 10 year old car needed replacement after this winter, plus something with the fuel injectors and the power steering. So I looked at DH and said, I may buy a new car this year. Of course, by the time I picked the car up and swiped my card, I had already calculated the increase in insurance, excise tax, the whole expense of it’s new, I have to care about dings and dents and get it detailed regularly, and the worry about whether all of those screens and beeps that are now standard will be too much stimulation and distract me while driving (do they have ADD specs?). Of course having the steering fixed and the fuel injector cleaned out means that it now runs like a charm, so I’ll forget about it till next spring until they tell me I have another $1K in repairs plus I need a new set of tires. That may push me over the edge.

  162. “Square footage is dirt cheap; furniture to fill it all is still relatively expensive”

    If I got an 8ksf house, I’d probably dedicate significant parts of it to things like an exercise space and a music room, both of which wouldn’t need much furniture.

    It’s also possible to get used furniture inexpensively, e.g., at estate sales or freecycle. We’ve discussed here before how hard it can be to get rid of our parents’ stuff, including furniture.

  163. I think I mentioned this before, but in my parents’ retirement area, new homes are furnished with a decorator’s assistance. Furnishings often stay with the house, at least partially. Considering that a window treatment can cost a few thousand dollars, it would make sense for it to be considered part of the real estate to which it is attached, but idk if that’s how it works. Probably not.

  164. “Our Amex bill is regularly larger than our mortgage. ”

    We’re in the same boat, living in a high COL area. We try to use Amex for as many expenses as possible, and currently have about 1 million in points. DH says that will pay for some of our retirement travel costs.

  165. I recently made a decision to try to only buy beer in cans, because locally, disposal of bottles has become a problem. No one here can recycle them, and the cost of shipping makes recycling elsewhere impractical.

    Here’s why I’m not a real totebagger. My first thought reading this was “why can’t you throw them in the trash?”

  166. Totally OT, something funny happened this week, I made the pasta recipe that Meme recommended for dinner Monday night. We have dinner with my parents on Wednesdays, and my mom made the same recipe last night – she got it out of a magazine. I thought mine was good, hers was better, she used thinner wholewheat spaghetti than I did and doubled the spices. I followed the steps religiously and she winged it – having to add water at some point – which I knew was because she didn’t add the spaghetti when she was supposed to (I kept my mouth shut). It gave me more confidence to wing it myself next time. One downside, I didn’t get leftovers to take home, since I already have some in my refrigerator.

  167. if one spouse is earning 60 and the other 190, is there even any point for the lower-earning spouse to work?

    However, in 5 years the 60k spouse makes 90k if s/he stays full time. If s/he drops out of the work force and hopes to return in 5 years, salary may be 40k – if a decent job can be found.

  168. There are houses in our neighborhood that are gut renovations or tear downs. The rebuilt houses fit quite nicely with their surroundings. Our house is paid off and has appreciated since we bought it. We can live in our house as is, till the kids are off to college. I then see us moving to a newer smaller place.

  169. Finn, I’ve just joined “Swap and Shop” groups on FB for two relatively well-off areas around Tampa. The amount of stuff people just want to get rid of is astounding! One could easily furnish an entire house. Having coordination in each room wouldn’t be hard, as people list things like two couches and a coffee table or a dinner table set including four chairs. Having a consistent style from one room to the next might be more difficult, but wouldn’t be impossible either.

  170. all of those screens and beeps that are now standard will be too much stimulation and distract me while driving

    But, with auto braking, lane keep assist and radar cruise you’ll be able to drive an extra 3 years (at least) before your doctor and kids get together and pull your license.

  171. I don’t see people making $60k having their salaries rise, let alone to $90k in a few years- what fields are you in where that is true? The people I know in that range are mostly nurses, teachers and technicians.

  172. “But, with auto braking, lane keep assist and radar cruise you’ll be able to drive an extra 3 years (at least) before your doctor and kids get together and pull your license.”

    I’m hoping that by the time I get to that point, I can just buy a self-driving car.

  173. Finn – it says our spending is high.:) Our mortgage isn’t crazy, but our spending probably shouldn’t regularly be higher. Oh well, something to work on.

  174. “I wonder what the effective marginal “tax” rate is on a family that makes 250kish or so in a high COL area between local, state, and fed taxes and tuition between 125k and 250k.”

    It’ll be several years before I have to decide, but it may make more sense for me to retire as soon as I’m eligible than to continue working, depending on where my kids go to college, and the financial aid offered there.

  175. The 60K spouse is also saving for retirement (ideally) and increasing a family’s collective savings. And sometimes that spouse is a lot more fun to live with when he/she continues to work. As others have pointed out, the 60K spouse maintains the ability to ramp up and get a job if something happens to the other earner in the family. We’ve done the math, and my working is still a net gain. But even if it weren’t, the risk of me dropping out of the work force to maximize “our” collective earning potential and minimize “our” costs falls directly onto me. There are a lot of factors that go into deciding whether or not to drop out of the work force, but I don’t think the money for a few years where daycare is highest is the most critical one.

  176. I agree with Ada that the calculations regarding the lower earning spouse need to account for the long-term benefits/drawbacks of dropping out of the workforce entirely, as well as non-monetary factors.

    Rio, my best unsolicited advice re: your house purchase is to not push yourself beyond what you feel comfortable with. When we bought our first house, the bank was willing to lend us three times what we paid. We were both relatively happy with our jobs at the time but felt uncomfortable getting anywhere close to that number. Fast forward several years and we were so thankful to be in a position where we could make big job changes when the current jobs weren’t working for us anymore. Without that flexibility there would have been a lot more misery.

  177. Yeah, I was thinking of nurses and teachers and the like. The point about security in case the main breadwinner becomes unemployed is very true. But I imagine it is kind of a depressing thought to count up how much you spend on commuting, childcare, conveniences needed with no at-home parent, taxes, and incremental tuition and then realize that working is actually costing you money.

    Few people are going to have sympathy for people making 250k a year, so the Totebag is a rare place where these hypotheticals can be discussed without coming across out of touch at the very least. But a hypothetical primary care doctor and her teacher spouse living in San Francisco are going to find this kind of thing rankling. And I imagine this kind of situation isn’t that unusual in Totebag families. I seem to remember the median income here from the survey was somewhere in the upper 100s?

  178. Rio, I asked essentially your question about a family with engineering manager ($100k+ a bit) and SAHM for 20 years regarding the impact of financial aid at private colleges. CoC told me that 46% of gross SAHM mom income would be affected for tuition and their marginal tax rate (no childcare since younger kids are in high school) is ~45%, with state, federal, child tax credit phaseout combined. At that point (91% to tuition and taxes), you are working mostly in case something happens.

    But since Mr WCE’s dad got terminal cancer at 53 and my mom has terminal cancer, I think about “what if something happens?” a lot.

  179. WCE,

    My post seems to have gotten eaten… In my world a women could go from a 50k a year part time work at home gig to 150k in 18 months and 300k in 36 months if the need arose.

  180. “why can’t you throw them in the trash?”

    Well, you could, and a lot of people do. But our refuse system will separate them out, so the issue of disposal would still exist, just out of mind of the person who threw them in the trash.

    Our landfill is full to the point it was supposed to have been shut down many years ago, but no replacement site has been selected (NIMBYism comes into play big time), so trash keeps getting dumped there.

    I believe the bottles still get shipped out for recycling, but at a loss. IMO, as long as that’s the case, the bottle tax should be increased to help cover that.

  181. Rio, your scenario is our situation. I’m now covering daycare, plus about $800 a month but for a while I was not (I work part time). I’ve kept working for a variety of reasons (I have an amazingly flexible schedule, I was only 1.5 years away from vesting in a pension when I had #3 and my benefits are half the cost of DH’s and way better).

  182. Rhett – I thought you meant my neighbor, the sales rep, not the House Hunters character.

    DD – same thought here. I’m still not sure my parents reliably recycle.

    You can get a lot of furniture cheaply, but it’s not necessarily going to look impressive to the level of a Georgian mansion. And then it’s kind of at the point where you have about eight furnished sitting areas in your house–family room, living room, other family room (for lack of a better term), solarium, morning room, office with sitting area, master bedroom sitting area, basement sitting area. All filled with the same overstuffed neutral-colored couches.

  183. Bay Area: Can you re-post the link to Meme’s pasta recipe?

    “Our Amex bill is regularly larger than our mortgage.”
    Ours has always been this way. Our Amex bill is $3,500 per month on average, and I consider us pretty frugal.

  184. Rio – I think if you want to convince your dh to house hunt frugally, your best tack is not to try to convince him that life is too dangerous to take on that much debt, but rather life can be so much better when you minimize your fixed expenses.

  185. Finn, I heard that some colleges include the value of your house and others exclude it, so you might want to investigate if financial aid is an option for you.

  186. rather life can be so much better when you minimize your fixed expenses.

    Genius! I couldn’t have said it better myself.

  187. On the home equity in college aid front, I know my parents said (10+ years ago) that the Ivy I toured would require them to take a mortgage out on their house in order to pay for my attendance. I don’t know if that was because the school explicitly took into account my parents’ home equity or just because the expected contribution was not realistically available from other sources.

  188. bay area mom, I am glad the recipe was a success, but it was not mine. Someone else should get the credit.

    Milo – truer words were never spoken. My goal is not to live on nothing but SS in retirement, but to be able to do so if necessary.

  189. I finally scanned the original article (nursing Baby WCE) and looked up data on individual incomes. Median for 2012 was $26,000, median was $40,000 and $60,000 was at the 80th percentile. $90,000 was at the 90th percentile. Realistically, the lower earning spouse would be doing well to be earning at the 80th or 90th percentile of individual earners and, presumably, carrying the bulk of the load at home. (That’s how my house works, anyway.)

    I think the federal government has made and continues to make choices to spend in ways that create inflation. This, I think, is a larger problem than the fee percentage on savers. Inflation is tough to calculate and when the index changes, it seems to be in the government’s favor.

  190. Meme, I posted the recipe. It’s a great way to get rid of the second half of the plastic box of spinach from Costco!

  191. One of my working class origin friends married into an old educated Yankee family – the sort where there is a lot of well located run down property, private school is a fundamental expense, but the pants all have shiny knees and trade is vulgar. Her SIL married another such, and they became teachers with fairly low income, and a modest house in their own name. He inherited the family vacation home on Block Island a couple of years before the kids started college and they were shocked, shocked to discover that the 7 figure second home disqualified them from financial aid. But of course it could not be sold.

  192. “My goal is not to live on nothing but SS in retirement, but to be able to do so if necessary.”

    Unless benefits are cut, that may not be very difficult. As Milo posted earlier, a two-earner couple could max out at well over $70k/year. If your home is paid off, it wouldn’t seem that difficult to live comfortably on that much. You might not be able to travel much, or eat at fancy restaurants, but that would seem more than adequate to cover food, shelter, utilities, property tax, etc.

    The one thing that could really mess this up is medical care.

  193. June– back then, did the Ivies all have the policy of meeting every student’s financial need (as calculated by them)?

  194. Of note, the Stanford announcement that it won’t be charging tuition for families with incomes below 125k, does have the caveat “with typical assets” — which I think would mean a bit of home equity, a small 401k and not much else. Retiring when you child is a junior won’t get you free tuition at Stanford (at least as things stand now).

  195. “The one thing that could really mess this up is medical care.”

    The other issue is that projected $70k is based on delaying benefits until the age of 70. That’s great for people like my parents who are happy and fulfilled plugging away at their work all through their 60s. Less so for Meme’s friend, who as it happens, was probably earning more than my Dad makes, but in a position where a job loss can be financially catastrophic compared to lifestyle expectations.

    The more I watch people and hear about these situations, the more I undetstand how long-term wealth favors those who are least dependent on it. Which would be the real philosophy for Rio’s dh to adopt.

  196. Milo, that was my thought about Meme’s friend, compared to my discussion about costs in time and money to take our rural parents to Mayo clinic for workups.

  197. Finn – I do that hypothetical calc for me as a long lived widow whose non tax sheltered financial assets have been wiped out by an lingering illness for my older spouse and/or a market collapse, which are the sorts of events that are not inconceivable. And as far as I can tell, I could stay in my home in Massachusetts, have full internet and cable, but no car. If I can keep DH out of the nursing home on a diet of quinoa and fish, we will be sitting pretty even if there is a market collapse.

  198. I think the federal government has made and continues to make choices to spend in ways that create inflation.

    Then how do you explain Japan’s persistent deflation when their Govt debt levels are 3x as high as ours?

  199. He inherited the family vacation home on Block Island a couple of years before the kids started college and they were shocked, shocked to discover that the 7 figure second home disqualified them from financial aid. But of course it could not be sold.

    Missed this the first time. LOL!

    An old friend of mine from Barrington has a lifelong goal of becoming this sort of family, more or less.

  200. Rhett, the Japanese save more than we do and their currency is less desired by non-Japanese. So the Japanese have a real return on their investment (deflation) because the people holding the government bonds are spending yen. More of our government debt is held by people who are not spending dollars, and long-term, they’ll want a real return in their own currency.

    Admittedly, that could happen in a few ways, one of which is the security of the US dollar as insurance against their own currency, even if they experience a slight loss in buying power. We’re not Venezuela.

  201. “The other issue is that projected $70k is based on delaying benefits until the age of 70. ”

    If SS will provide enough income to live comfortably from age 70 on, then the worry of running out of money from savings largely goes away, and retirement planning becomes reduced to making sure to have enough savings and income to reach age 70. Whatever you can put away above that can be used for things like travel and an inheritance.

  202. “I see a willingness to spend more freely during the early active years, because we have all watched our parents, aunts and uncles, and older friends deteriorate as they live into their late 80s and well beyond.”

    Yes. I hope to be able to do a lot of the bucket list items during the first few years of retirement, when I hope to still be physically active and able to enjoy them. E.g., I want to do a lot of skiing, perhaps spending an entire ski season at a ski area, and some bicycle touring.

    If DW and I can make our retirement savings last to 70, we’ll be OK. I will also have a small annuity from my previous job to supplement SS and whatever savings we have left.

  203. Rhett, the Japanese save more than we do

    No, they don’t. Far less in fact. I’ll get you the link.

  204. Rhett, that’s pretty short-term data. Also, much of the Japanese debt is held by the Bank of Japan. Debt service as a percentage of revenue is similar between the US and Japan, according to this article. Maybe Japan will figure out the answer to sustainable buying power with dropping birthrates, but an Economist article on the poor in Japan says people are living with their parents and poverty will become more apparent when the WW II generation dies off. One thing I noticed on business trips is that the government definitely supports employment- they’d have 4 people directing traffic at a corner with construction where we’d have one. http://www.bloombergview.com/articles/2014-09-24/japan-s-debt-trap

  205. Also, much of the Japanese debt is held by the Bank of Japan

    Much of ours is held by the Fed and the SS trust fund. It’s all money the government owes itself.

  206. Much of the spending increase in Japan was attributed to the tax increase. This seems just to be people accelerating purchases to avoid the tax, and will likely be followed by a decrease in spending. Over the course of the entire year, spending may be down a bit because of the tax increase.

  207. I don’t understand economics beyond the concept that a high government deficit usually leads to inflation. It’s interesting that both the US and Japanese governments devote similar percentages to debt service. At the state level, I think there’s a similar problem with state pensions but states don’t control interest rates.

  208. “Our Amex bill is regularly larger than our mortgage. ”

    Us too – more than 2X our mortgage last year. I put everything except tuition/housing/cleaning lady on that sucker for the rewards. I think it just means that we aren’t house poor – our mortgage is a relatively small portion of our spending.

  209. Agree with Ada, Tulip, Rhett, and WCE – In my area, it is not so much that a part-timer could go full-time and more than double their income or have an fast rising income, but if she steps out of the work force, getting back at the same rate of pay she left at is VERY difficult. So, remaining in the workforce is the safety net for the other salary taking a hit or going away.

  210. The decision for both partners to stay in the workforce depends on each family’s experience. I have mentioned that most of the women in my neighborhood don’t work outside the home. One family had three young kids and the man lost his job during the recession. His wife was a SAHM. While he looked for work, she got her teaching credentials and got a teaching job before her husband found a new job. She has continued to teach. One or two women approached me about getting back to work since their kids were now in school. I offered to help but nothing came of it. I assume unless there are grave financial difficulties no one will be changing their situation at this point.

  211. Rio – For a younger less established worker to leave the workforce entirely to manage the home front full time, especially if (s)he does not expect to re-enter in the same field and the spouse is also young with a bright future, is a very big bet. The bet is that nothing will go wrong or change with the breadwinner’s ability or willingness to continue in that role, the overall economic situation providing the upward trajectory of the career, and the SAH’s ability or willingness to continue the arrangement when there is no economic alternative to relocation, constant spousal travel, or other disruptions. Life insurance, disability insurance, a habit of vigorous saving in the early years, living modestly, all of those things are hedges against that bet. Being able to step in cold and earn enough to keep the enterprise afloat 15 years down the road can be done (people roll up their sleeves and do what it takes) but is hardly a reasonable fall back plan for the UMC.

    So, do you feel lucky?

  212. A good friend ended up quitting her job to stay home with their 3 kids. Her husband traveled a lot for work and with 3 kids 6 and under, it was too hard to juggle. However, 4 or 5 years later they divorced and she needed to re-enter the workforce. She took a big salary hit and still hasn’t caught back up to where she used to be.

    When one is considering whether to stay in the workforce, you shouldn’t just think about how much you are clearing over daycare expenses but also how hard it would be to re-enter your field and whether you’re likely to take a pay cut in order to do so.

    There’s no one right answer. But when thinking about the financial aspects, it’s more than just “how much am I making above daycare costs.”

  213. Meme, point taken but my hypothetical was about the specific economics of college financial aid. Not sure what that has to do with a younger worker staying in the workforce or not. Presumably most Totebag parents of college applicants are pushing 50. This really doesn’t enter into my own decisions to continue my career after kids or take a break, as it’s many years off and who knows how paying for college will work by then.

    My question was inspired by seeing my own parents’ and aunts’ and uncles’ situations when paying for college. The ones who had been working all along resented that their incremental income went entirely to tuition and taxes. The ones who considered returning to the workforce (they happen to work in fields that are easy to re-enter and hadn’t missed out on much in terms of raises) found that it would be more expensive to work at that point. Maybe my relatives are unusual, in that they mostly have widely spaced kids and so the effect of college financial aid would last for over a decade.

  214. Rio, the middle class people I know don’t get aid unless they go to private schools. They don’t get aid for public universities, which is where almost everyone I know goes. So I think you’re observing mostly outliers, although they may be characteristic of the UMC. Is it important to you to remain upper middle class?

    Bud Hebeler, an engineer long-retired from Boeing has financial advice I like at analyzenow.com. He observes that one of the biggest risks for middle class retirees is needing to support a divorced daughter and young children, in whole or in part. If your parents could handle this (as I recall, your parents are secure and your in-laws are financially less secure), that may be an OK fallback.

    I estimate between 1 in 5 and 1 in 10 marriages like ours (conservative, religious, a few kids) fall apart. Because my husband’s field is insecure, the chance that he’ll be laid off and unable to find an equivalent position is much higher than in fields like medicine or nursing. I worked in engineering for 10-12 years (depending on how you count co-ops/internships) before I left/was laid off while pregnant with twins. I took the hit in pay/prestige that the other posters are referring to.

  215. Rio,

    Given your husband’s career, is financial aid something for which your children are likely to be eligible?

  216. I think 20ish years from now the system will be so different that I have no idea if or how this will affect me personally. I was really going for the hypothetical here, not so much looking for personal advice. (Though advice from you folks is usually very good)

    Yes, I do think my relatives are outliers. But probably not unusual for UMC families with a decent number of children.

    For the record, I’m currently in the process of lining up a mostly from home consulting business that I’ll be able to ramp up or down should the need arise.

  217. Finn, I completely agree with you re a bottle tax. Ideally, that would slowly wean people off from such an inefficient practice. In Hawaii, though, so many single-serving beverage containers are purchased by vacationers who are only there temporarily, I wonder if there would have to be another disincentive.

  218. SM, for tourists the bottle tax probably wouldn’t be so much a disincentive as it would just cover the cost of shipping the bottles somewhere to be recycled.

    I wonder why nobody just washes and refills bottles anymore, like they used to do when I was a kid.

  219. “Presumably most Totebag parents of college applicants are pushing 50.”

    I’ll be older than that, and when I attend school events with my kids’ classmates’ parents, I see a lot of them, especially other dads, that are older than I.

    We know quite a few parents who plan to work until their last kid is out of HS, or is out of college, depending on what kind of financial aid package they get.

  220. “The bet is that nothing will go wrong or change with the breadwinner’s ability or willingness to continue in that role, the overall economic situation providing the upward trajectory of the career, and the SAH’s ability or willingness to continue the arrangement when there is no economic alternative to relocation, constant spousal travel, or other disruptions. ”

    We decided that the best life, disability, and unemployment insurance is a working spouse in a job with full benefits.

  221. “We decided that the best life, disability, and unemployment insurance is a working spouse in a job with full benefits.”

    That’s all well and good if it’s the lifestyle you both want. Otherwise, two working parents–especially two full-time working parents–is an extremely expensive insurance policy if that’s not how you want to live.

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