That said if you’re making $250k+ a year and not on track to retire by 50, seriously please open a retirement calculator and figure out what you need to do to get there.
That said, a lot of people in US tech can probably retire relatively early if they run the numbers and don't have a lot of external expenses.
I regularly frequent HN, and even comment from time to time, but I don't work in tech nor do I make bank. I'm a cashier at a gas station. Lol. I'm lucky if I make $16000 a year after taxes.
Generally outside SV:
- If you are making $250+ it is at least middle management (not tech work) AND
- Only in zones where cost of living is eating this up (e.g. UK/Europe/Australia/etc can get to this equilvalent salary but costs for example for rent, food, tax, etc are much higher).
In most countries SWE is above average pay, but it isn't life changing and it still unfortunately has the boom/bust cycles.
I've met some very good engineers who have built some great large scale solutions who are on less than this salary often in non tech firms being outside of the SV area due to personal reasons (e.g. can't move due to family, too old to do the interview dance SWE has become these days, etc).
A semi decent apartment in SV will cost you ~$3k
Bills(phone, internet, electricity, etc) another $1k.
If you are married, groceries at least $1k.
Even if we assume you don’t do anything else in life, and you are in perfect health best case scenario would be $6k savings a month or $72k a year.
It would take you 10 years to save $720k plus whatever you make from investments.
That’s not enough to even buy you a house in SV. How are you going to retire?
Unless you assume you will get $250k straight out of college and keep up salary raises for 25 years.
Sure, if you don’t have kids, age with no health problems, never enjoy anything in life, you may be able to retire at 50 in Thailand or Philippines.
For a long while we managed to stay around $500-600 but that was before COVID inflation. I dunno how the official inflation rate's as low as it is, we don't buy much that'd be considered "luxury" level (we're not buying caviar, say, and rarely even get stuff like the grass-fed "fancy" butter [actually yellow instead of white, tastes like something rather than just having texture but no flavor] instead of the cheapest available) and I'm pretty sure we buy a lot less meat per person than the US average, but if we fill up a cart now it's like $250-$300. I've hit $150 on small shopping trips where I didn't even fully fill one of the smaller, short carts.
$150 phone $200 electricity $200 gas $200 water $80 internet $80 trash
Car insurance? Gas? I’m ridiculously generous when saying you can save $6k per month.
Assuming a 4% draw down (conventionally agreed to be safe) is over 5.5k a month.
Also $1k month on bills? Groceries too?
Judging by your inflated costs for everything, and ann idea that a house (versus more modest accommodations) is what the goal is, you’ve got Lifestyle creep. And, things certainly get a lot easier when your spouse also works.
Edit: all % numbers are per year
Consider the case of condos in cities. If you were to buy outright, you effectively get a return by not paying rent (i.e. paying yourself rent). Rent is usually ~5% of the condo cost. HOA + property taxes is 2-3% so subtract that from the rent return i.e. net return 2-3% (5-2/3%). The rest of the return is appreciation from the underlying real estate prices. I am excluding maintenance costs because they are negligible in condos.
On the other hand, if you rent and put the entire amount (that you would have paid to buy the condo), you get ~10% per year. To break even between the two scenarios, you would need real estate prices to grow 7-8% (2-3% + 8-7% = 10%).
Beyond this, there are psychological reasons to buy vs rent. Buying - ability to customize the space, peace of mind because of perceived stability etc. Renting - flexibility, peace of mind because of no long-term obligations etc.
A mortgage is an interpolation of the two cases at the cost of the interest one pays. It is noteworthy, at least in the US, that for most people, this is the only time they can borrow several hundreds of thousands at relatively low costs.
I think people commonly underestimate how accessible this stuff is
It’s easy to make a 40 year forecast spreadsheet for retirement, including housing costs, property, taxes, maintenance. Include vacation, budget, food, general cost of living.
Though, of course, if you're living from investment income you should be aware you're living off the work of other people.
Isn't the logical extension that everyone lives off other people?
This was basically the point of "you didn't build that" (https://en.wikipedia.org/wiki/You_didn%27t_build_that)
SV & big tech engineer money.
Majority of engineering fields do not make that kind of money to retire at 50. Comfortable compared to the rest of the country, sure.