A 6-Bedroom Beaux-Arts Gold Coast Mansion with a Rooftop Deck: 1521 N. State Parkway
This 6-bedroom Beaux-Art style mansion at 1521 N. State Parkway came on the market in August 2018.
Built in 1894 by architect George Maher, it is on a larger than standard Chicago lot measuring 28.5 x 130 lot.
It has a one-car garage plus a parking pad for a second car.
The listing says it has “modern interiors with advanced Crestron-Lutron technology” which were completely gut renovated by Hewitt Horn Ltd.
It’s plaster moldings have been restored.
The house has 5 fireplaces.
The kitchen has white cabinets and an island with natural wood cabinets along with luxury appliances.
The listing says it has “new baths.”
6 bedrooms are on the second, third and fourth floors but the listing also says there is a bedroom/exercise room in the lower level as well.
The lower level, which isn’t shown in the pictures, also includes a recreation room and a “huge” laundry room which the listing says can double as a catering space.
However, there IS a second kitchen and a den/entertainment room on the fourth floor which leads to the fully built-out roof deck which has a fireplace and built-in grill along with lush plantings.
In addition to the rooftop terrace, there are two other outdoor spaces including one off the kitchen.
The house has central air and space pak cooling.
It’s located at the north end of the Gold Coast. It’s near Lincoln Park and the shops and restaurants of Old Town.
Originally listed at $10.3 million, it has been reduced to $9.95 million.
Does this house satisfy vintage lovers AND modern lovers?
Jennifer Ames at Engel & Voelkers has the listing. See the pictures, floor plan and video here.
1521 N. State Parkway: 6 bedrooms, 7 baths, 9700 square feet
- Sold in January 2012 for $4.625 million
- Originally listed in August 2018 for $10.3 million
- Reduced
- Currently listed at $9.95 million
- Taxes of $79,185
- Central Air and Space Pak
- 1 car garage and one space parking pad
- 5 fireplaces
- 3 outdoor spaces
- Bedroom #1: 26×15 (third floor)
- Bedroom #2: 15×12 (second floor)
- Bedroom #3: 17×12 (second floor)
- Bedroom #4: 17×12 (third floor)
- Bedroom #5: 17×12 (fourth floor)
- Bedroom #6: 22×13 (third floor)
- Bedroom #7/Exercise room: lower level
- Office: 10×11 (third floor)
- Library: 20×20 (second floor)
- Den: 17×10 (or 17×16?) (fourth floor)
- Living room: 17×14 (main floor)
- Dining room: 14×19 (main floor)
- Kitchen: 23×16 (main floor)
- Family room: 22×18 (main floor)
- Recreation room: lower level
- Laundry room: lower level
- Second kitchen: fourth floor
What a place. Watched that roof deck get built out (from North & Astor). I would imagine that a big portion of the small buyer pool for this place wants to have more than one garage space. But who knows, maybe the awesome view pics at the end of the listing will help them get past that.
A fair bit underwhelming for $10MM
That has to be one of the shittiest liquor collections on display.
“Watched that roof deck get built out (from North & Astor).”
It’s beautiful and seems very private. I love the whole top floor.
This seems like a very family friendly home which is a surprise given that it’s so old. Usually there are wasted “ballroom” type of spaces in these but this one doesn’t have that.
That property tax bill is breathtaking. Good thing Nancy Pelosi and the democrats are fighting hard to get SALT deductions for these struggling mansion owners.
Annual property taxes of $79K.
When you tax the hell out of high net worth individuals and don’t even keep their neighborhoods safe, they are going to take their wealth and businesses elsewhere.
Case in point: billionaire Ken Griffin looking at relocating Citadel Headquarters. Compares Chicago to Afghanistan.
https://chicago.suntimes.com/business/2021/10/4/22709536/ken-griffin-illinois-richest-man-chicago-afghanistan-citadel-hedge-fund
“Annual property taxes of $79K.
When you tax the hell out of…”
The implied value based on that tax amount is about $3.75m. Should be $100k, just based on purchase price.
House was featured in WSJ, too:
https://www.wsj.com/articles/a-historic-chicago-home-updated-for-modern-day-11588079753
Seller thinks Chicago has 3 nice months, but lived here for nearly 40 years? Weird life choices.
“Case in point: billionaire Ken Griffin looking at relocating Citadel Headquarters. Compares Chicago to Afghanistan.”
Oh Ken. Please don’t site to his silliness on this blog.
“Silliness”
Sabrina, please look at the data. Ken’s statement was rooted in fact. There’s nothing silly about this.
https://www.forbes.com/sites/niallmccarthy/2016/09/08/homicides-in-chicago-eclipse-u-s-death-toll-in-afghanistan-and-iraq-infographic/?sh=4d6cbf87d754
“That property tax bill is breathtaking.”
That property tax bill is about 40% of what it “should be” if the house were to sell at ask.
Looks like it’s worth $10 million, to me at least. One of the few homes of this price that really looks like a place someone with $10 million to spend might actually want. Great location, too, far enough north to keep you from some of the scumminess that’s crept into the Michigan Avenue scene recently (unfortunately).
Ken Griffin complaining about Illinois estate tax—which doesn’t kick in until your estate is worth $4 million—is laughable.
He’s basically worried about fat cats like him having to pay it. I’ll never figure out why billionaires think people should feel sorry for them about their billionaire financial problems.
The man has made a career on greed. Nothing wrong with that, but don’t complain about financial matters when you’re among the richest handful of people in the state where millions are struggling to make ends meet. It says a lot about him.
Ken’s reasons for leaving have nothing to do with finances or greed. They have to do with legitimate concerns about safety, which many previously “safe” neighborhoods are facing.
From the article:
The perception of crime has started making it difficult to recruit talent to Citadel’s Chicago campus, he said, and he can’t in good faith tell people the city is a good place to raise a family anymore.
“There is nowhere, where you can feel safe today walking home at 9:30 at night and you worry about your kids coming to and from school.”
“That’s no way for our city to exist.”
“ don’t complain about financial matters when you’re among the richest handful of people in the state where millions are struggling to make ends meet.”
I can’t fault him. Big players like Ken create lots of jobs and businesses that draw talent. That’s what makes for a world class city. Things like the estate tax prevent people from wanting to settle here. $4M in a retirement account isn’t hugely excessive for a couple retiring in late50s/early 60s who are still putting kids through school.
The greedy ones are the state employees who work 9-5, put moderate effort into their work that doesn’t contribute much to society, and then retire on state funded pensions as opposed to their own savings/investments. This is a huge reason why Chicago has to over tax everything,
If he wants people to feel sorry for him because he’s subject to taxes on his estate value above $4 million you may be one of the only ones who’s sympathetic, KK.
I’m no fan of greedy state employees and their high pensions, either, but you’re purposely creating a straw man argument.
“ If he wants people to feel sorry for him because he’s subject to taxes on his estate value above $4 million you may be one of the only ones who’s sympathetic, KK.”
I don’t think he’s trying to make people feel sorry for him. I think he’s trying to point out the injustice of it when it’s not happening most elsewhere. The reason you should care about it is because it’s a policy that dissuades business leaders from settling here and creating jobs and paying taxes. If we lose our big employers, we’ll lose the associated tax base, professionals who need jobs, and quality of our city.
Estate taxes are higher in many other states.
If you want to keep business leaders here, maybe consider re-legislating the Trump administration’s punitive removal of a property tax benefit on taxes over $10,000 a year that he purposely designed to hurt blue states.
“ If you want to keep business leaders here, maybe consider re-legislating the Trump administration’s punitive removal of a property tax benefit on taxes over $10,000 a year that he purposely designed to hurt blue states.”
This is well within the power of the current President, House, Senate. All blue. They’ve chosen to not revoke it.
“The reason you should care about it is because it’s a policy that dissuades business leaders from settling here and creating jobs and paying taxes. If we lose our big employers, we’ll lose the associated tax base, professionals who need jobs, and quality of our city.”
The big employers continue to come. They are not fleeing. It’s the other way around.
Why?
Talent.
“$4M in a retirement account isn’t hugely excessive for a couple retiring in late50s/early 60s who are still putting kids through school.”
Damn.
This would put you in the top 4% of the population by net worth in terms of wealth.
How many have $4 million in a retirement account nationwide?
5,000? 10,000?
2,000?
I couldn’t find any data on Google which makes me think it’s quite small. I did find some data from 2013 because Obama was going to max out IRAs at $3 million (where you couldn’t put in any more contributions once you reached that level) so there was data about how many HAD that much in an IRA (not 401k, which is separate data.)
I found this from 2013:
“That’s my big question. The EBRI’s database has 6,180 accounts exceeding $3 million (out of 20.6 million accounts.) That’s a very small subset of IRA owners. Who could have saved that much in their IRA?”
https://retireby40.org/who-the-heck-has-3million-ira/
It’s very, very small. And yes, the stock market is up quite a bit since 2013 so people’s accounts have grown. But to get $4 million would still be very few people.
I feature many luxury homes on this blog, including this Gold Coast mansion. This is NOT the norm for Chicago, Illinois, or society.
“Ken’s reasons for leaving have nothing to do with finances or greed. They have to do with legitimate concerns about safety, which many previously “safe” neighborhoods are facing.”
Wrong. He’s made the same comments for like a decade. Or more.
About hiring, Citadel has had trouble luring people to Chicago from the coasts for years. They just haven’t wanted to do uproot families and come here. That I concede him. But notice he’s not moving the employees to Florida, which is where he’s been living during the pandemic, because he knows that recruitment there would be even more difficult. He’s moving them to New York
.
In the interview, he also “warned” that New York was on the decline too. And if they weren’t careful, they’d lose all their jobs too.
Lol.
“Sabrina, please look at the data. Ken’s statement was rooted in fact. There’s nothing silly about this.”
Please stop talking about him. It’s silly.
It’s no different than Trump calling Chicago a “war zone” that only he could fix 5 years ago.
4.5% of US Households, 5.7 million, have a net worth of $3M or more.
The Gold Coast is the 7th highest income urban neighborhood in the United States as of 2017 — we can expect a disproportionate number of multimillionaires in the area.
(Source: Wikipedia)
These are the CEO types loaded with stock comp that build successful companies and create lots of jobs.
“4.5% of US Households, 5.7 million, have a net worth of $3M or more.”
That’s net worth. Includes homes and whatever else. It’s very, very small.
In a retirement account, even smaller.
And yes, I have long argued on this blog that there is way more money in the Chicagoland area than people recognize because all of the corporate insiders get stock options (just like in Silicon Valley!) so if you’re the CEO of Allstate, you have millions of dollars in stock. Heck, employees down the chain at Boeing, McDonald’s etc ALL get stock options and if their stock is at new all time highs, it’s a lovely bonus.
But at millions of dollars, it really is very, very few people.
Taxes on the rich have never stopped them from living in Illinois, California or New York. This is an OLD argument that keeps getting drummed up. The middle class person is much more likely to flee to a lower cost tax state (either property or estate taxes) because it has a bigger impact on them in retirement.
“ It’s no different than Trump calling Chicago a “war zone” that only he could fix 5 years ago.”
Did you see the link above illustrating the deaths in Chicago compared to Iraq and Afghanistan? War zone is an understatement.
Why lard ass and Lightfoot turned down the federal assistance in those very troubled neighborhoods a few years back is beyond me. Things have only gotten worse — the violence is more steadily creeping into neighborhoods like the Gold Coast and Lincoln Park.
Ken’s correct when he stated that there’s nowhere in the city you can walk safely at 9:30 at night anymore.
i walk lots of places safely in Chicago at 9:30 p.m. Do you even live here, KK, or are you just one of many conservatives who gets a kick out of trolling Chicagoans?
I always wonder why conservatives are so darn concerned about protecting the wealth of the top 5%. Those people already have plenty of ways to avoid paying fair taxes, believe me. I’m sure plenty of others deserve more sympathy.
Look, I’m actually one of the people who’s hurt by Trump’s property tax punishment, but I doubt anyone would want to hear someone like me complain about it. I’ve been very lucky in my life and it would be unseemly for me to complain about not getting that tax break on my expensive home.
As for Democrats trying to repeal, you must know about the filibuster. The Republicans use it to block anything Democrats try to do. Don’t pretend it’s easy for the Democrats to get anything done. If the Democrats could pass a bill that would wipe out Covid immediately, McConnell would filibuster.
Yes Dan. I am a full time city resident. You may recall that I live at 2626.
Last night, against my better judgment, I took my dog out for a walk around 9:45. The route we took was north on Lakeview, west on Diversey, and then looped back around on Pine Grove . There was hardly anyone out (not even dog walkers) which should have been a warning to just go home. In that 10 min walk, I encountered 2 bums, a guy who looked normal but was talking nonsense and dropping tons of F bombs audible from my opposite side of the street, 2 cop cars chasing a car with all the lights and sirens going, and a vacant storefront that looked like someone had just recently put their fist through the window — glass was all over the sidewalk.I ran a quick errand at 7-11 and the clerk said “Have a good night —be careful!,” as I left.Might have had something to do with the sirens.
This use to be a great block! The steady downturn in recent months has been devastating. There have been multiple carjackings in recent months at Lakeview Ave and Wrightwood. A mugging a few weeks ago around 9pm at Diversey and Hamden.
“This use to be a great block! The steady downturn in recent months has been devastating.”
Sorry for what is happening in your neighborhood KK. There’s no doubt that the major cities are struggling right now. It’s not just Chicago.
Similar stories about the crime, carjackings, muggings in Miami, LA, San Francisco, New York and elsewhere.
Clearly, the stresses and strains from the pandemic are impacting people in ways we’ve never seen before. As I said before, it’s like society has broken down. There are no norms. The brazen shoplifting is just crazy to me. As are the shootings, with seemingly no care about human life at all.
Walgreens is shutting another 5 stores in San Francisco because it can’t stop the shoplifting and it’s just not safe for employees and customers. Ugh.
“Looks like it’s worth $10 million, to me at least. One of the few homes of this price that really looks like a place someone with $10 million to spend might actually want.”
And yet, as Sabrina points out, it hasn’t sold in 3 years. I don’t understand why they don’t lower the price. I see this a lot in the Gold Coast. They must not need the money but is there any chance it will sell even close to this list price?
“If you want to keep business leaders here, maybe consider re-legislating the Trump administration’s punitive removal of a property tax benefit on taxes over $10,000 a year that he purposely designed to hurt blue states.”
That’s not the way I see it. This is actually one of the few Trump/ Republican policies that I like. I never understood why the Federal government should give a tax break to the residents of high tax states. It’s unfair to the low tax states. And if someone is about to point out that low tax states get a lot of benefits from the federal government my question to them is why does the left support those policies? End those as well.
“ I always wonder why conservatives are so darn concerned about protecting the wealth of the top 5%. ”
Because Dan, as I stated, those are the CEO/executive type professionals who are going to build successful companies that create lots of jobs and pay lots of taxes.
It’s not about protecting their wealth, it’s about ensuring that they don’t feel like it’s in their best financial interest to relocate to a different state or country.
Regarding the Illinois estate tax…Only 11 states have an estate tax. There are others that have an inheritance tax and some have both. The Illinois estate tax is essentially incalculable. I’ve discussed it with an estate planning attorney before and apparently the effective rate quickly gets up to 25%, which I think is obscene. It’s not hard for an elderly widow to end up with an estate greater than $4 MM after being left with all the retirement accounts and 1/2 of the rest of the estate in her own trust. If she lives modestly and the market does well she could be there by the time she’s in her 80s.
People don’t worry about this stuff until they get into their 60s. Then they want to bail on Illinois. The attorney told me that they see a ton of clients that leave specifically because of the estate tax.
“ Sorry for what is happening in your neighborhood KK. There’s no doubt that the major cities are struggling right now. It’s not just Chicago.”
“ Clearly, the stresses and strains from the pandemic are impacting people in ways we’ve never seen before.”
Thanks for your kind words Sabrina. While I agree that the pandemic has put a unique stress on a lot of people, I don’t believe this is the main catalyst of the violence.
I’ve been appalled by the blatant lack of support and power undermining that leadership in certain cities across the country has shown toward our hardworking law enforcement. The thugs are in control and they know it, so of course they are going to do whatever they want.
“How many have $4 million in a retirement account nationwide?
5,000? 10,000?
2,000?”
First, the supposition was a couple, so it’s a ~$2m number, rather than 4.
Second, WTF with citing IRA stats? The people who have big accounts have them in 401s.
Third, that cite uses numbers from *20-fucking-13*. With what the market has done, what would equal $3m today? Something less than $1.5m in 2013.
“Did you see the link above illustrating the deaths in Chicago compared to Iraq and Afghanistan?”
When were there 2.5 million Americans in Iraq & Afghanistan??
What was the *rate* like??
“there’s nowhere in the city you can walk safely at 9:30 at night anymore.”
Huh. Guess I’m no longer “in the city”.
“Second, WTF with citing IRA stats? The people who have big accounts have them in 401s.”
ERBI provides good data. There’s no way to get the data using 401ks.
Also, you only have a 401k, remember, if you stay in the same job. Most don’t keep it in their previous employer’s account and roll it over when they leave. This is why you can’t look at Fidelity’s and Vanguard’s 401k data for clear answers because it’s only someone who has worked at the same employer for 25 years who has $1 million+ in those accounts.
That being said, with the markets at new highs, Fidelity and Vanguard have been reporting a record number have $1 million+. They don’t tell us how many have $2 million or higher however. I’m assuming it’s a pretty small number.
I used 2013 because it was the only data I could find on the higher amounts as people were talking about $3 million accounts due to the Obama era change in IRAs. It’s quite rare to have anything over $3 million in an IRA or a 401k. Yes, even with the stock rally in the last 8 years.
You all think there are millions of people with those amounts. No. And $4 million in a single account? Even crazier.
When it came out in 2012 that Mitt Romney had millions in his IRA didn’t they say that there were only like 5,000 people with over $5 million in an IRA?
And KK didn’t say anything about it being split among 2 people. Sadly, it’s an even rarer woman who has $2 million in her account. I can’t imagine those numbers. Must be very, very low.
Women have too many breaks in their work careers. They don’t put in as much money as a result. And they make less money so they end up putting in less.
Women, however, do live longer so it’s possible that GenX women, more of who worked than Baby Boomers, will accumulate big nest eggs by their 80s and 90s simply due to compounding.
But her example was a couple in their late 50s or early 60s. Hard to get to $2 million in a regular 401k in only 25 or 30 years. You’d have to be maxing out every year, which we know only about 10% of those with Vanguard and Fidelity accounts are doing.
“you only have a 401k, remember, if you stay in the same job.”
So, my 401k from a job I left over 15 years ago doesn’t exist?
I’d better look into that!
“KK didn’t say anything about it being split among 2 people.”
Uh…you *quoted* it:
“$4M in a retirement account isn’t hugely excessive for a couple”
And then you note it again: “her example was a couple”
That last word–couple–means *2* people.
“You all think there are millions of people with those amounts.”
You always present an idiotic strawman.
Over *5* years ago, USNews suggested $2m is the new $1m:
https://money.usnews.com/money/personal-finance/articles/2016-03-31/is-2-million-the-new-1-million-for-retirement-savings
Yes, that’s a ‘future’ goal, rather than a current reality, but the premise was still that:
“$4M in a retirement account isn’t hugely excessive for a couple”
Which I would agree is true, as far as it goes.
Which isn’t to say it’s common, or typical. just not “excessive”, and not really “unusual”, in the GZ, for later-career professional couples.
“While I agree that the pandemic has put a unique stress on a lot of people, I don’t believe this is the main catalyst of the violence.”
Why not?
This same random violence is happening in dozens of American cities. Do they all have a failure of leadership? Is that true in South Beach where a tourist was just killed sitting outside having dinner with his family by a guy high on mushrooms?
Is that true in LA where a young woman was just stabbed by a guy walking by her in Hollywood in the middle of the afternoon? (The police shot the suspect in that incident.)
Many cities are seeing a surge in crime.
“People don’t worry about this stuff until they get into their 60s. Then they want to bail on Illinois. The attorney told me that they see a ton of clients that leave specifically because of the estate tax.”
It’s a very small percentage of people who ever have to worry about the $4 million level. Upper middle class and rich only.
Middle class people will NEVER get to that level. Even with compounding.
Why do you think all those Silent Generationers in the Gold Coast have homes in Florida? Lol. They move their residency there and spend 7 months down there and spend the summers in Illinois.
Right now, many have decided to move permanently to Florida which is why there is a lot of Gold Coast inventory on the market.
“And yet, as Sabrina points out, it hasn’t sold in 3 years. I don’t understand why they don’t lower the price.”
Lots of inventory over $4 million right now- all over the city. A lot of it is, surprisingly, selling.
This is the busiest year in the upper bracket since 2018.
“The sale marks the Chicago area’s 65th home sale for more than $4 million this year. If luxury sales continue this trajectory, 2021 sales could blow past 2018’s record when 73 luxury units were sold.”
https://therealdeal.com/chicago/2021/10/06/michael-jordans-ex-wife-sells-chicago-mansion-for-discounted-4-5m/
“So, my 401k from a job I left over 15 years ago doesn’t exist?”
Vast majority of people roll over their 401ks when they leave their jobs. Into their own IRAs. That’s why the 401k data isn’t reliable and people should be looking at the IRA data.
If you left yours in an old plan, you are unusual anon(tfo). Most don’t want it kept with their old employer and have more investment options if they roll it over into their own IRA.
There really is no good source of what people have in their retirement, actually, due to multiple accounts. We can only use the data that the big boys supply, and the government. The IRS knows what you have. And the big boys do handle the vast majority of accounts but, obviously, not all.
Also, some states even have those new retirement accounts for those whose employer doesn’t offer one. I don’t know who manages those or if we have data from those.
But we do know that few people manage to save millions of dollars in their retirement accounts. Life gets in the way.
Also, I recommend people check out the old best selling book The Millionaire Next Door which explains how many doctors and lawyers are, basically, broke. Many have big house, small stock portfolios, lots of “things” and lots of debt. It’s still an interesting book even though its a couple of decades old.
“ Why not?”
Extreme bifurcation
Guessing you don’t know many LMC and below folks
“ Middle class people will NEVER get to that level. Even with compounding.”
What’s your definition of middle class?
“That last word–couple–means *2* people.”
Correct. But $4 million for 2 people would be very, very unusual. Small percentage of couples would have that. Only a few thousands, most likely, by their late 50s.
Even if one person was maxing out. They’d have to start very young. At 25. And never stop. And the other person in the couple would have to be aggressive as well. Also starting at a young age. But if they stopped working at any time in there, especially in their early 30s, then would be impossible to get to even $1 million by upper 50s. Leaving the spouse to have to have $3 million or more in their own account. Which we have seen is only a few thousand people, even with the bull market we’ve had. Let’s say double that of 2013. It’s not many.
So, yeah, it’s possible there are some in their late 50s who could have that kind of incredible retirement accounts. Both of them worked at high paying jobs starting at age 25. They maxed out every single year. They never stopped working. They remained over invested in equities.
But it would be pretty darn rare.
As I said: life happens. And how many 25 year olds are maxing out? Even 30 somethings?
Don’t you ask your friends how they are doing with their retirement savings? I have friends who have been working since their early 20s. Many have been putting in diligently for 25 to 35 years. In professional jobs. None are even close to $2 million. They’re just getting close to $1 million but not even there yet.
Again, life happens. For a few years, they didn’t put in as much as they were saving for a down payment on the house etc.
By their 70s and 80s, might have that though due to the power of compounding. They are still in a great position where they are at at $800,000 in their 50s.
35% of Americans have nothing saved.
Make religious institutions, private schools, and other non-profits pay property taxes. That would solve a lot of our problems. I’m so sick of property taxes rising to extreme levels.
I also don’t understand the empathy people seem to have towards wealthy people paying a higher taxes, but no one seems to care that the owner of a starter home can easily see a property tax increase of 40% in a single year.
This new assessor is a madman. People are going to be forced to sell when they see their new taxes after this reassessment. I am touring houses now and I have been looking at the reassessed value and not considering houses where there’s a gigantic reassessed value. I was going to tour one house recently that was priced at $430,000. I looked at the reassessed value and it was over $100,000 more than the asking price of the house (total reassessed value was up 43% over 2020). I see this again and again and it’s frustrating. I don’t even get to deduct the full amount of property taxes anymore.
If we had safety nets, I would be less appalled by these taxes, but knowing that a huge chunk is going to police officers and police retirees who are too scared to even get vaccinated, is infuriating. The government takes and takes and seem to never give back when someone without political clout is in a time of real need. We save our entire lives and play the game and in the end, the government would make your spouse destitute if god forbid, you need a nursing home.
keep voting for tax and spend Democrats, jenny…
“ Don’t you ask your friends how they are doing with their retirement savings? I have friends who have been working since their early 20s. Many have been putting in diligently for 25 to 35 years. In professional jobs. None are even close to $2 million. They’re just getting close to $1 million but not even there yet.”
50-60 with this market and they don’t have $1MM?
We know you don’t hang w/ the poors, if these are UMC’s that’s really pathetic
S: “And KK didn’t say anything about it being split among 2 people.”
@: “That last word–couple–means *2* people.”
S: “Correct. But $4 million for 2 people would be very, very unusual.”
So, are you acknowledging that KK DID say something about split bt 2 people??
“It’s a very small percentage of people who ever have to worry about the $4 million level. Upper middle class and rich only.”
UMC+Rich is the typical GZ buyer. AKA, the typical CC reader.
“ UMC+Rich is the typical GZ buyer. AKA, the typical CC reader.”
If you’re pushing 50 and don’t have $1MM in an IRA/401k/Pension (or have a passive income stream lined up) but are paying a note on a $1MM home, get ready to have fancy feast be a staple of your diet.
These are the folks that think their home will fund their retirement and think like Sabrina
Btw – good luck to everyone of the CPD manpower drops
“according to the latest data from Fidelity Investments … the number of 401(k) accounts with seven-figure balances swelled 84% in the 12 months ended June 30 to 412,000, while the number of seven-figure IRAs jumped more than 64% to 341,600.”
Yes, that’s only $1m, instead of $2m, and includes older people, BUT it is also just Fidelity.
https://www.marketwatch.com/story/more-americans-have-1-million-saved-for-retirement-than-ever-before-11629478108
Is it likely that out of 750,000 accounts at $1m+ there are fewer than 10,000 at 2x that? It’s at least as likely that there are 10,000 people who hold 2 of those accounts. And that’s *just* Fidelity!!
“If you’re pushing 50 and don’t have…”
because it was easy to find the data, and it happened to match nicely, I did a crude model using the following:
S&P full year return, to two decimals from 1994 to 2020
401k contribution at 5% of fica cap (ie, 3,030 in ’94; $6,885 in ’20), 10% of FICA cap (6,060 to 13,770), and also at 100% of 401k cap (9,240 to 19,500).
Treating it as all in on 1/1 (ie, 1994 contrib was fully affected by 1994 SP return of -1.54%)
No matches or anything, and no catch-up, bc our UMC worker turned 50 in ’21
5% of FICA cap = $390k
10% of FICA cap = $781k
100% of 401k cap = $1.161m
So, that’s sort of the ‘normal’ range, right?
“This new assessor is a madman.”
That was Berrios. Kaegi is cleaning up his mess. I used to find all kinds of crazy ass property tax valuations until Kaegi came along. Now they actually make sense.
“I am touring houses now and I have been looking at the reassessed value and not considering houses where there’s a gigantic reassessed value. I was going to tour one house recently that was priced at $430,000. I looked at the reassessed value and it was over $100,000 more than the asking price of the house”
If your assessed value is higher than what you paid for your house then you submit that with your appeal. You will likely win. And I tell my buyers to ignore really low valuations because eventually it will get fixed.
Remember, the assessed value doesn’t tell you much about what the property taxes are going to be for 2021 because the base is going to be a lot higher. If everyone’s valuation went up 50% nobody would get a tax increase, all else being equal.
That’s my cohort
I would expect some match, even a pleb like me got a match.
Its not difficult to be over the 100% threshold,
“I would expect some match”
Full 401k cap, plus 3% match based on FICA cap = $1.395m
So that’s basically 15% of a good, but hardly unusually large, salary ($60k in ’94; $138k in ’20) to 401k, plus the 3% match.
Bump up the salary to bona fide UMC (the matching cap–$150k in ’94; $285k in ’20) and apply the 3% match, it’s $1.7m.
“What’s your definition of middle class?”
We’ve been over this, JU:
Middle class people buy $700,000 homes in Norwood Park.
“ Full 401k cap, plus 3% match based on FICA cap = $1.395m
So that’s basically 15% of a good, but hardly unusually large, salary ($60k in ’94; $138k in ’20) to 401k, plus the 3% match.
Bump up the salary to bona fide UMC (the matching cap–$150k in ’94; $285k in ’20) and apply the 3% match, it’s $1.7m.”
Yeah that’s more in line with my experience
“We’ve been over this, JU:
Middle class people buy $700,000 homes in Norwood Park.”
Always nice to have her commit to something for 5 minutes…
“We’ve been over this, JU:
Middle class people buy $700,000 homes in Norwood Park.”
They don’t. This is upper middle class.
No one earning $90,000 a year is buying a $700,000 home.
“Full 401k cap, plus 3% match based on FICA cap = $1.395m
So that’s basically 15% of a good, but hardly unusually large, salary ($60k in ’94; $138k in ’20) to 401k, plus the 3% match.”
Are you people morons???
Yes- you are.
You only earn a large salary late in your career. Lol. No 25 year old is earning that “large” salary.
In some professions, there’s no 401k match. Like Big Law.
“S&P full year return, to two decimals from 1994 to 2020
401k contribution at 5% of fica cap (ie, 3,030 in ’94; $6,885 in ’20), 10% of FICA cap (6,060 to 13,770), and also at 100% of 401k cap (9,240 to 19,500).
Treating it as all in on 1/1 (ie, 1994 contrib was fully affected by 1994 SP return of -1.54%)
No matches or anything, and no catch-up, bc our UMC worker turned 50 in ’21”
Yes- this would be the normal range.
Most 50 year olds would be in the $500,000 to $700,000 range if they started at a really young age and never stopped.
But this is assuming they put it all into equities, which almost no one does. GenXers were told “be diverse” or they’re in the age-directed funds at their company that automatically rebalance based on your age. Most GenXers are in a mix of stocks and bonds.
If you are 50 and you have $700,000, you are crushing it. Still plenty of time for compounding before you retire.
“according to the latest data from Fidelity Investments … the number of 401(k) accounts with seven-figure balances swelled 84% in the 12 months ended June 30 to 412,000, while the number of seven-figure IRAs jumped more than 64% to 341,600.”
Yes, I’ve said that the number of millionaires is at records.
We don’t know how many are at $2 million or above. But it’s not many.
There are 10,000 baby boomers retiring every day. Last year over 1.4 million retired, right? So even if 20,000 have 401ks over $2 million, it’s so, so small.
It’s really hard to get to that level in a 401k/IRA. There are some partners who have been able to shove higher amounts into their IRAs and end up with millions like Mitt Romney. But the “normal” investor? Very difficult by your 50s.
By your 90s? Sure. Because of compounding. That’s when we hear about the janitor who leaves $7 million to his local library because he had been invested for 50+ years.
GenX is the first generation to be fully invested in the 401k system. Baby Boomers were already working by the time the 401k came around. And it wasn’t until the 1990s when all the employers started deploying it versus the pension. The Roth IRA only launched in 1999 and it was GenX who was young enough to really take advantage of that as well.
It will be interesting to see how GenX does under this system as they are the guinea pigs. But they are reaching their mid-50s now.
“These are the folks that think their home will fund their retirement and think like Sabrina”
If anyone in Chicago thinks their home will fund their retirement, they need help.
The only people who think that live in:
1. California
2. Washington State
3. Oregon
4. Washington DC
5. Boston
6. NYC
No one in the Midwest thinks their house will “fund” their retirement. It’s an asset that hopefully you can cash in to buy your retirement home (wherever that may be.) And since many people are now working from home, it’s also a place you want to love and enjoy because you will be spending so much time there.
Homes aren’t just assets to most people.
Our economy is now an experience economy. Your home is now an experience too.
“UMC+Rich is the typical GZ buyer. AKA, the typical CC reader.”
Sure, in the GreenZone.
But the estate tax has been around a long time and it’s not impacted the GZ real estate. I don’t understand the propaganda that the rich are “fleeing” Illinois. They are not. And haven’t been.
In fact, it’s the opposite.
Will people move when they retire?
Almost certainly.
But the Millennials are the largest generation in US history. And GenZ is large too. They are both urban generations. They WANT to be in the city. The pandemic hasn’t changed that as we’ve seen the apartment buildings all re-fill again in the last year. The “city” isn’t doomed and the desire to live and work there isn’t going away.
So the Millennials will be buying the homes in the GreenZone that the Silent Generation and Baby Boomers sell to escape the tax issue or simply to escape the weather.
Nothing new with that.
We are seeing the big demographic move that was predicted years ago right now in the Gold Coast, which is mainly an older population with Greatest Generation, Silent Generation and Baby Boomers selling. That’s why there’s so much inventory right now. You don’t see the same inventory levels in the “young” neighborhoods like the West Loop/Fulton Market.
“Overall, about 51% of employers who offer a 401(k) also provide matching contributions.”
https://www.myubiquity.com/business/average-company-401k-match-in-2021/
“Are you people morons???
Yes- I am.”
Agreed
“You only earn a large salary late in your career. Lol. No 25 year old is earning that “large” salary.”
$60k in 94 was a large salary?
Also moron, compounding makes earlier contributions more important.
“In some professions, there’s no 401k match. Like Big Law.”
WTF does that have to do with anything were discussing? Oh noes the top of the 1% doesnt offer a match? How ever will they be able to max out their 401k contribution?
You pick some of the dumbest hills to die on
“Most 50 year olds would be in the $500,000 to $700,000 range if they started at a really young age and never stopped.”
Most. But not most UMC
“But this is assuming they put it all into equities, which almost no one does. GenXers were told “be diverse” or they’re in the age-directed funds at their company that automatically rebalance based on your age. Most GenXers are in a mix of stocks and bonds.”
Sally in AP might put her money in a Target Date fund, but she’s not UMC
LOL on your GenX comments.
“If you are 50 and you have $700,000, you are crushing it. Still plenty of time for compounding before you retire.”
Compared to a truck driver yes, compared to other UMC’s – no
“In some professions, there’s no 401k match. Like Big Law.”
g.t.f.o.
Do you know what you call someone who spends 25 year in biglaw in a no-match job? Partner, or fool.
The partners “get to” (aka, must) put the DC cap amount in, but the 401k portion is optional–for 2020, that was $37,500. But most put in the full amount–$57k in 2020.
Anyway, don’t you tell us all the time how few biglaw lawyers there are?
“The only people who think that live in:
1. California
2. Washington State
3. Oregon
4. Washington DC
5. Boston
6. NYC
No one in the Midwest thinks their house will “fund” their retirement. It’s an asset that hopefully you can cash in to buy your retirement home (wherever that may be.) And since many people are now working from home, it’s also a place you want to love and enjoy because you will be spending so much time there.”
You need to get out more or go off script
There’s a significant number of the “Managerial Class” that has done exactly this – Forgone investment in their 401k to buy the $700k shitbox in LS.
“Homes aren’t just assets to most people.
Our economy is now an experience economy. Your home is now an experience too.”
And great everyone should enjoy where they live. I hope they understand that they’re going to be working and experiencing that house into their late 60’s
““Overall, about 51% of employers who offer a 401(k) also provide matching contributions.”
https://www.myubiquity.com/business/average-company-401k-match-in-2021/
You can swing from a target market – UMC and use global stats
It doesnt work that way. Shit you had to pull a stupid example of Big Law as a counter
“You can swing from a target market – UMC and use global stats”
Reminder: You usually become “UMC” when you’re older.
Even Riz, who is a doctor and has posted on this site, would agree with me that he and his doctor friends weren’t buying the $1 million house until they were in their mid to upper 30s. And that is “early” for most workers to reach their peak.
Upper management doesn’t become so until they are in their mid-40s. That has, historically, been peak earnings for most generations. The oldest Millennials are staring at that now.
We’re talking about how to get over a million in your 401k. You have to start very young. And yes, the match helps. Most people who are UMC don’t “max” out their 401ks until they are further along in their careers. Again, life intervenes. You have to pay off those school loans. You want to save for a house. You are saving for your kids college. Your salary is much lower for years.
Also, you might have gotten laid off in the Great Recession, as millions did, yes even UMC people. You could have been working at Merrill Lynch. Those people had their contributions interrupted. For some people it took several years to get back on their feet and start investing again.
Having a straight through 25 years of employment is rare. And then add on women, and child bearing/rearing, and there will be breaks in working.
What I would like to see is the age of those at Fidelity and Vanguard who ARE maxing out the $19,500 right now. They tell us it is about 10% of those putting money into their plans. I’m sure that skews to 40 or even 50+ and up.
But that would make sense.
“g.t.f.o.
Do you know what you call someone who spends 25 year in biglaw in a no-match job? Partner, or fool.”
And what were they doing when they were associates anon(tfo)? Please, tell us. The only way you’re getting to $1 million by 50 is if you start young.
So let’s say they went straight through and were 25 when they got that Big Law job in 1994. They would have had school loans. How many do you know that were maxing out at age 25 in 1994? And with NO match.
Sure, if they actually make partner (most do not), they can put in a ton more money. But all of that comes later. And it’s not many people. Some of them WOULD be living in the Gold Coast. If you are making $1 million at Kirkland, then, yes, you are probably maxing out.
But if you read the Millionaire Next Door, you might be surprised at how few actually DO max out. How few lawyers build any assets other than those that you see.
But we’re arguing about something else now.
To get over $1 million by age 50, you have to start early and you have to be maxing out. Even UMC people don’t max out in their early years. Like Big Law associates. That’s why even most of them aren’t at $1 million by 50. Maybe by 60 if there is a bull stock market and they are 100% in equities which NO financial advisor would recommend they be so few are.
If all it took was putting money in and waiting, the Baby Boomers would all be super rich. There would be WAY more millionaires in the Fidelity and Vanguard data. After all, they had 1982-2000 to get mega-rich.
But there aren’t.
Most people don’t save in their retirement accounts, especially at early ages.
Life happens.
“Most 50 year olds would be in the $500,000 to $700,000 range if they started at a really young age and never stopped.”
“Most. But not most UMC”
This is incorrect because the UMC was middle class when they were in their 20s and 30s. Most don’t save in their 20s. Or save very little. Many cash in their 401k rollovers when they change jobs in those early years.
Time is on your side. To build up a $1 million 401k by 50, you have to go full throttle at an early age, never get laid off or step away from work, be 100% in equities, and have the timing of a bear stock market in your early years on your side.
Some young GenXers and the older Millennials have the timing right. I hope they took full advantage of that bear stock market and are reaping the benefits now.
“$60k in 94 was a large salary?”
Yep.
“And what were they doing when they were associates anon(tfo)? Please, tell us.”
For 6-10 years, they were putting in the 401k max, and then for 15-19 years putting in the DC cap?
Do you really want that number, too?
Using 401k max from 1994 to 2004, then DC max from 2005 to 2020. Otherwise same rules.
What’s that number???
It’s $2.429m.
Yeah, yeah, that’s a 55 yo, rather than a 50, bc LS. So start in ’98, ass to ’08:
Still $1.843m
Those biglaw people are really hard up, aren’t they. Cry me a f’ing river.
“If you are making $1 million at Kirkland”
You’re the staff to the real partners.
“We’re talking about how to get over a million in your 401k. You have to start very young. And yes, the match helps. Most people who are UMC don’t “max” out their 401ks until they are further along in their careers. Again, life intervenes. You have to pay off those school loans. You want to save for a house. You are saving for your kids college. Your salary is much lower for years.”
More Sabrina BS
People who value savings and retiring early max out their 401ks Vs buying a $6k bike, buy a Rolex on a payment plan, etc
All those costs go into a budget. Its entirely possible to max out your 401k, have > $1MM at 50, Save for a home w/ 20% down, pay it off early all while on a (CC Rating Guide) MC salary
Everything else is poor decisions and excuses.
“People who value savings and retiring early max out their 401ks Vs buying a $6k bike, buy a Rolex on a payment plan, etc”
If this were true, it would be more than 10% of plan participants “maxing out” in both Vanguard and Fidelity’s plans, right?
They publish their numbers every year. They never really change. It’s always just around 10%.
Remember what it’s like to be 20 or even in your 30s, these days as everyone is getting married later, just starting out, changing jobs every 2 or 3 years, paying off student loans, saving for a house, wedding, vacations.
It just doesn’t happen like JohnnyU says. All the stats show that. I wish it were that easy as I would be thrilled if my kids were going full throttle in their 401ks in their 20s but they aren’t.
Life happens. And that’s okay. You don’t need to have a million by your 50s to have a great retirement. People are working longer as well.
But, like I said, I would be interested to know the ages of those who ARE maxing out among the 10% of those in the biggest plans. I’m assuming it’s mostly those over 40 as they’re staring down the barrel of retirement and trying to “catch up.” But to get that $1 million by 50, you can’t be putting in $19k at 40 and think you’re going to get there.
“Those biglaw people are really hard up, aren’t they. Cry me a f’ing river.”
Huh?
Why the anger anon(tfo)? Damn.
50% of employees don’t get a 401k match. That’s why I brought up biglaw associates. They do not either. The odds that most of them have $1 million by age 50 isn’t high. 99% of them don’t make partner. They end up in lower paying jobs. It takes 10+ years to pay off law school loans. And they mostly live in expensive housing markets.
No one is “sorry” for them. Nor for the doctors who don’t start contributing to their 401ks until their 30s.
But without compounding, you aren’t getting to $1 million.
That’s why there are few that actually have that much at that age.
Don’t feel bad if you aren’t at a million at 50. You shouldn’t be. It’s tremendous if you’re at $500,000 to $700,000 by 50.
“ They publish their numbers every year. They never really change. It’s always just around 10%.”
Suzy from the secretary pool and Biff from the mailroom ain’t UMC. Unless you want to try and make the argument that a significant number of those covered by a 401k, you’re misusing stats (Shocking I know)
“Remember what it’s like to be 20 or even in your 30s, these days as everyone is getting married later, just starting out, changing jobs every 2 or 3 years, paying off student loans, saving for a house, wedding, vacations.”
Getting married later should allow for more financial freedom, assuming no kids.
Why are they saving for a wedding at 25 when they’re getting married later in life.
What does changing jobs every 2 or 3 years have to do with funding a 401k? Maybe there’s some vesting that might cause some match loss
So now student loans are an issue?
You can save for all of those and fully fund your 401k. Millennials don’t understand delayed gratification and don’t get a second marshmallow.
“ It just doesn’t happen like JohnnyU says. All the stats show that. I wish it were that easy as I would be thrilled if my kids were going full throttle in their 401ks in their 20s but they aren”
Excuses…
“ People are working longer as well.”
And that’s some kind of reward? Lofl
It’s also why things are so f’d up. Boomers won’t go away and continue to screw things up
“ Don’t feel bad if you aren’t at a million at 50. You shouldn’t be. It’s tremendous if you’re at $500,000 to $700,000 by 50.”
If you’re UMC and at this level (w/o passive income) you should be embarrassed.
“If you’re UMC and at this level (w/o passive income) you should be embarrassed.”
Nah. If you have a household income of $200,000 by age 50 (which would be UMC), it likely took you 30 years to get there.
Not maxing out most of that time because you have to send the kids to college, buy new cars every 5 years, and you have a mortgage in an expensive city.
Don’t listen to JohnnyU. Most UMC don’t max out until late in their careers, when they’re near peak earnings.
And, again, they haven’t had the time to compound their 401ks yet.
“Suzy from the secretary pool and Biff from the mailroom ain’t UMC. Unless you want to try and make the argument that a significant number of those covered by a 401k, you’re misusing stats (Shocking I know)”
Once again, JohnnyU is living in some alternative universe where the UMC started out their careers already rich instead of finally becoming UMC in their 40s and 50s when they reach peak earnings in their careers.
But the data is the data. As I said earlier, it’s not great because there are so many sources of it for 401ks. All we have to go by is what the big firms that run the plans tell us.
The biggest are Fidelity and Vanguard. Combined they have like 40 or 50 million 401k accounts and millions more IRA accounts.
Their data has been pretty consistent over the last few years that only about 10% of all those people are maxing out.
The largest companies in the country use these two so that would include plenty of UMC managers, lawyers etc.
According to Wikipedia, the upper middle class is about 15% of the US population.
https://en.wikipedia.org/wiki/Upper_middle_class_in_the_United_States#:~:text=Sociologists%20Dennis%20Gilbert%2C%20Willam%20Thompson,roughly%2015%25%20of%20the%20population.
But we know from Fidelity and Vanguard that only 10% are maxing out. And that would include the upper classes who are saving too (which is 1-2% of the population.)
Therefore, quite a few UMC people are NOT maxing out their 401ks.
“It’s also why things are so f’d up. Boomers won’t go away and continue to screw things up”
Wrong. 10,000 a day are retiring. The economy really needs them to stay on, actually. But more decided to retire last year, when the pandemic hit, than was expected.
That’s why there is a shortage of workers in so many key areas. For instance, many older pilots took early buy outs last year and there aren’t enough to replace them now.
“Why are they saving for a wedding at 25 when they’re getting married later in life.”
Average age for women to marry is now 27. Average for men in the US is 29. The highest ever.
So, yes, many 25 year olds are saving for it because it’s crazy expensive. But it will be interesting to see if the trend towards micro-weddings which took hold last year becomes a real cultural thing or if the 150 person sit down costing more than a house comes roaring back after the worst of the pandemic passes.
“ Nah. If you have a household income of $200,000 by age 50 (which would be UMC), it likely took you 30 years to get there.”
Now $200k HHI is UMC?
“ Not maxing out most of that time because you have to send the kids to college, buy new cars every 5 years, and you have a mortgage in an expensive city.“
Why do you have to buy a new car every 5 years?
The mortgage is a canard. It’s a decision that people make. Tri ie & Chad have to live in the green zone
“Don’t listen to JohnnyU. Most UMC don’t max out until late in their careers, when they’re near peak earnings.”
Too late
Don’t listen to Sabrina as she’s a shill and is searching for validation for her poor decision making ability
“ Once again, JohnnyU is living in some alternative universe where the UMC started out their careers already rich instead of finally becoming UMC in their 40s and 50s when they reach peak earnings in their careers.”
So a real MBA (not a Lewis nights and weekends) fresh out of college can’t max out their 401k?
“ But we know from Fidelity and Vanguard that only 10% are maxing out. And that would include the upper classes who are saving too (which is 1-2% of the population.)
Therefore, quite a few UMC people are NOT maxing out their 401ks.”
This a typical Sabrina move. I say there’s no reason for UMC’s (or those on that trajectory) to not max out their 401k. Sabrina shows stats that people aren’t maxing out and uses it as “proof’ that it’s impossible to max out
You are dumb
“ Wrong. 10,000 a day are retiring. The economy really needs them to stay on, actually. But more decided to retire last year, when the pandemic hit, than was expected.
That’s why there is a shortage of workers in so many key areas. For instance, many older pilots took early buy outs last year and there aren’t enough to replace them now.”
LOL
That’s the airlines own making w/ an assist from boomers. Pilots staying on the job longer, less opportunity for younger crew members to move up. Stuck in a lower paying positions, younger crew bail.
“ So, yes, many 25 year olds are saving for it because it’s crazy expensive. But it will be interesting to see if the trend towards micro-weddings which took hold last year becomes a real cultural thing or if the 150 person sit down costing more than a house comes roaring back after the worst of the pandemic passes.”
That sounds like a personal decision to spend that much Vs say fully fund ones 401k
Thanks for proving my point
“That sounds like a personal decision to spend that much Vs say fully fund ones 401k”
Again, 99.9% of people actually LIVE. They don’t obsess about retirement at age 25. We know from the data that not many are even saving for retirement in their 20s.
There’s just too much else going on.
But I hope some are putting a thousand or two a year into it while they are that young. You don’t need thousands in your 20s because you have time on your hands.
This is what I encouraged my children to do. They don’t notice $200 a month and they are lucky to get a match from their employer as well.
“That’s the airlines own making w/ an assist from boomers. Pilots staying on the job longer, less opportunity for younger crew members to move up. Stuck in a lower paying positions, younger crew bail.”
Can we all agree that JohnnyU has no idea what goes on in the airline industry?
Pre-pandemic they were already short on pilots due to strong demand globally, with some American pilots working for Middle East airlines because they were willing to pay top dollar for example. (Although this Sun-Times article says it was disputed whether there really was a shortage.) You don’t make much starting out when you’re flying for the small commuter airlines like United Express. But as you move up in plane size, so does your salary.
And no, the Baby Boomer pilots were not blocking the GenXers or Millennials.
From the Sun-Times:
Now travel is rebounding, although it still hasn’t returned to 2019 levels. United faces a small shortage of pilots in the near term. Last week, United said it will hire about 300 pilots, many of whom had received conditional job offers before travel evaporated last year.
The shortage at United and other major carriers will grow more severe in coming years, as large numbers of airline pilots approach the mandatory U.S. retirement age of 65.
It is expensive to learn to fly and gain the 1,500 hours of flight time required for U.S. airline pilots — a commonly cited sum is $100,000. To attract applicants, United says it will offer $1.2 million in scholarship aid this year and more in the future, but most applicants will likely need to borrow against the promise that — if successful — in several years they will earn pilot’s wages at United.
https://chicago.suntimes.com/business/2021/4/6/22369893/united-airlines-pilot-shortage-flight-academy-diverse-pipeline-training-scholarships
“So a real MBA (not a Lewis nights and weekends) fresh out of college can’t max out their 401k?”
Huh?
Average age getting the MBA must be in your 30s, right? And you just took out $200,000 in loans to get it from Harvard, Booth, Northwestern, Wharton, etc. And you missed out on 2 years where you could have been putting something into the 401k at your old job.
If they are putting in $19,500 once they get the $200,000 project manager job at Facebook, they are starting very late to make it to $1 million by 50. It’s basically not going to happen especially as the stock market will have a bear market sometime between age 30 and 50 for that investor.
But by age 60 and 70, they will be just fine as long as they don’t get laid off and have several years of unemployment in there. Or they decide to have children and take a few years off. Or they invest too conservatively, putting too much in cash.
I’m only angry about the stoooopid “biglaw associates don’t get a match”
bc it was that stooooopid.
“Now $200k HHI is UMC?”
Of course it is. UMC is $130,000 to about $400,000 (which is why the Biden tax cuts start kicking in over $400,000.)
That is household income.
Again, people on this blog live in their own little upper class bubble.
Actually, you can really see just how few truly rich there are by the number of home sales over $4 million in Chicagoland. There really aren’t that many people who can buy the $10 million house. But because you read about it in the paper or in People Magazine when they talk about JLo buying a $30 million home in Brentwood, you think there’s money everywhere.
Again, UMC is just 15% of the population. And only 10% of those are maxing out. The math doesn’t add up.
There are 5% to 7% of the upper middle class, or nearly half, who aren’t maxing out because you assume the 1-2% of the upper classes IS maxing out (that Kirkland law partner, for example).
Life happens. People want to take that trip to Paris. You don’t need to max out every year to retire. Again, that person who has $500,000 to $700,000 in their 401k at age 50 is doing well. If they retire at 65, and have it invested in stocks, they will most likely be a millionaire.
“Average age getting the MBA must be in your 30s, right?”
At the top schools (which is all JU was talking about), its exactly 30 at graduation:
https://poetsandquants.com/2019/11/27/average-age-work-experience-at-top-mba-programs/
And the vast majority of them had professional jobs (at the types of places that provide matches, or if we’re talking about the big consulting firms, just a straight up contribution) for 5-7 years before that.
“I say there’s no reason for UMC’s (or those on that trajectory) to not max out their 401k. Sabrina shows stats that people aren’t maxing out and uses it as “proof’ that it’s impossible to max out”
You can say that all you want.
But we actually have the data that shows that the UMC is NOT maxing out. Only about half of them might be.
If saving for retirement were so easy, and everyone doing it, they wouldn’t have the 50+ catch up provisions that allow you to put in even more.
“And the vast majority of them had professional jobs (at the types of places that provide matches, or if we’re talking about the big consulting firms, just a straight up contribution) for 5-7 years before that.”
They did?
I’m not that familiar with the backgrounds of most MBAs. I thought you got the degree so you could improve your career situation not just keep going in the same direction.
Here’s what Fidelity says about 20-somethings from its plans:
“But how much do people in their 20s actually have in their 401(k)s? The average 401(k) balance for Americans between the ages of 20 and 29 was $15,000 as of the fourth quarter of 2020, according to data from Fidelity’s retirement platform. The average employee contribution rate for people in this age group was 7.4%.”
https://www.cnbc.com/2021/04/26/how-much-money-americans-in-their-20s-have-in-their-401k-accounts.html
“bc it was that stooooopid.”
They don’t get a match. And you’d be surprised how many of them do NOT max out.
$19,500 with no match isn’t something to scoff at even if making $130,000 to 175,000. You have big school loans you have to pay. They live in the most expensive cities in the country.
“Again, 99.9% of people actually LIVE. They don’t obsess about retirement at age 25. We know from the data that not many are even saving for retirement in their 20s.”
Why not both?
“But I hope some are putting a thousand or two a year into it while they are that young. You don’t need thousands in your 20s because you have time on your hands.
This is what I encouraged my children to do. They don’t notice $200 a month and they are lucky to get a match from their employer as well.”
I hope you dont give financial advice professionally
If you put “Thousands” in when you’re in your 20’s, one doesnt need to play the catch-up game
“Pre-pandemic they were already short on pilots due to strong demand globally, with some American pilots working for Middle East airlines because they were willing to pay top dollar for example. (Although this Sun-Times article says it was disputed whether there really was a shortage.) You don’t make much starting out when you’re flying for the small commuter airlines like United Express. But as you move up in plane size, so does your salary.”
There’s a significant delta in pay for a Pilot and a FO.
Yeah that funnel to get to AA/Delta/United from a regional carrier was clogged by boomers, which has contributed to the “Shortages”
“Of course it is. UMC is $130,000 to about $400,000 (which is why the Biden tax cuts start kicking in over $400,000.)
That is household income.”
Thats not UMC – Its middle manager/bureaucrat class
“Again, people on this blog live in their own little upper class bubble.
Actually, you can really see just how few truly rich there are by the number of home sales over $4 million in Chicagoland. There really aren’t that many people who can buy the $10 million house. But because you read about it in the paper or in People Magazine when they talk about JLo buying a $30 million home in Brentwood, you think there’s money everywhere.”
Nothing to do with UMC
“Again, UMC is just 15% of the population. And only 10% of those are maxing out. The math doesn’t add up.
There are 5% to 7% of the upper middle class, or nearly half, who aren’t maxing out because you assume the 1-2% of the upper classes IS maxing out (that Kirkland law partner, for example).”
Making up stats on the fly – nice
“Life happens. People want to take that trip to Paris. You don’t need to max out every year to retire. Again, that person who has $500,000 to $700,000 in their 401k at age 50 is doing well. If they retire at 65, and have it invested in stocks, they will most likely be a millionaire.”
So they made a decision to go to Paris Vs fund their 401k. Like I said personal choices
“Well” is a relative term. I thought everyone was invested in target date funds?
You’re rust rambling at this point.
You’re the poster child for baffle them with bullshit
“They did?
I’m not that familiar with the backgrounds of most MBAs. I thought you got the degree so you could improve your career situation not just keep going in the same direction.”
You’ve never let that stop you before
“They did?”
Yes, among those at the top-25 MBA programs, particularly the late-20s set, they mostly do/did.
““Of course it is. UMC is $130,000 to about $400,000 (which is why the Biden tax cuts start kicking in over $400,000.)
That is household income.”
So a Journeyman carpenter married to a first year teacher are UMC?
Interesting times we live in…
“Yes, among those at the top-25 MBA programs, particularly the late-20s set, they mostly do/did.”
Age is just a number
“So a Journeyman carpenter married to a first year teacher are UMC?”
And a 10-year CPD officer (with *0* overtime) and a part-time crossing guard.
Or two 4th year teachers with masters degrees.
How does our hypothetical UMC couple buy a $700k MC home in Norwood Park?
Is 5X HHI the new 4X HHI, which was the new 3X?
Your housing market frightens and confuses me
“Is 5X HHI the new 4X HHI”
Well, yeah, sort of.
Relies on the $140k DP coming from somewhere (family, OT/side biz, prior RE, etc), but at current rates, $560k mortgage can be PITI of ~$3500/mo, which is bang on 30% of gross. Which is “affordable” if you have some upward salary mobility, or govt pensions, or other sorts of improving prospects.
“affordable” is the key – Not where I’d want to be, but then I never felt the urge to go all WSB and YOLO a house
How are they going to afford a trip to Paris, Pay off the crazy-expensive wedding (Because it costs more than a house) and student debt? – You know all the hall marks of being UMC…
“And a 10-year CPD officer (with *0* overtime) and a part-time crossing guard.
Or two 4th year teachers with masters degrees.”
Yep. You can be angry at what the income levels are for the upper middle class but they’re pretty well known now.
Chicago and Chicagoland is a big economic driver. Two teachers may not make that in Rockford. Or Champaign. Or Decatur.
Top 1-2%, or upper class, is $400,000+.
Top 15%, or upper middle class, is $130k to $399k. That’s households.
People simply don’t make as much money as you all think.
Vast majority are Middle Class. Under $130k.
All you have to do is look at how many people got the various stimulus checks. The first one included some members of the upper middle class. The second one did not. They tightened the cut-offs so a household at $150k didn’t get it.
“So a Journeyman carpenter married to a first year teacher are UMC?”
A first year teacher?
In Chicago, they have a high first year salary. Like $60,000. But that’s not true in most school districts.
In Arizona they are making like $40,000. So, yeah. Depends on what that “journeyman carpenter” is making. They are in high demand. If that person is making at least $100k and the partner is making $40,000, then yeah. Otherwise, they are middle class.
“Yes, among those at the top-25 MBA programs, particularly the late-20s set, they mostly do/did.”
Link please.
“Thats not UMC – Its middle manager/bureaucrat class”
$130,000 to $400,000 in household income is upper middle class. Upper class, aka, rich, is $400,000+. It’s just 1 to 2% of the population.
Chicago is a rich city. Lots of high income wage earners. Actually in ALL big US cities.
It distorts what most of you think is “normal.”
Get out of your bubble.
“Yeah that funnel to get to AA/Delta/United from a regional carrier was clogged by boomers, which has contributed to the “Shortages””
Baby Boomers are old JohnnyU. The youngest are in their upper 50s now. They haven’t been “clogging” anything for decades. Most of the big carrier pilots are GenX now. Worldwide, airlines were flying the most flights they could fly before the pandemic. Huge demand for pilots from the emerging market. China had ordered 90 new Maxs. They need pilots for all those planes.
So, no.
And first officers make a TON. It’s really not an issue.
“If you put “Thousands” in when you’re in your 20’s, one doesnt need to play the catch-up game”
No, but you won’t be a millionaire at age 50 either.
That’s the whole start of this discussion.
You simply can’t get to a million by age 50 in your 401k. Even if you’re upper middle class, because you aren’t going to be maxing out in your 20s. And by age 50, you don’t have enough time to get there otherwise.
You can get there in an IRA if you are an extremely gifted stock trader. But that is just a handful of people.
“ And first officers make a TON. It’s really not an issue.”
There’s a > $150k delta between pilot an FO at the majors.
Baby Boomers are old JohnnyU. The youngest are in their upper 50s now. They haven’t been “clogging” anything for decades. Most of the big carrier pilots are GenX now. Worldwide, airlines were flying the most flights they could fly before the pandemic. Huge demand for pilots from the emerging market. China had ordered 90 new Maxs. They need pilots for all those planes.
Since there a seniority system and limited pilot seats with the majors, yeah no, pilots (yes the word actually means something, not FO, not FE) are Boomers
“Link please.”
https://poetsandquants.com/2019/11/27/average-age-work-experience-at-top-mba-programs/
“You simply can’t get to a million by age 50 in your 401k.”
I showed how one simply can. 25 years of maxing contribution and investing moderating aggressively gets you well over it (right now).
Why the hate for those who were able to max out? Claiming that it’s “impossible”?
I also don’t get how you tag $400k HHI as “upper class” in Chicago–as you say, it’s a wealthy city. $400k passive income–yeah; $400k in w-2 income? That’s core UMC in Chicago (two professionals), at least unless/until they have $2m+ in retirement accounts.
My experience similar to JohnnyU. Just takes maxing out contributions and being somewhat frugal in your lifestyle. Rampant consumerism and keeping up with the Jones is the issue, not lack of funds.
$400k in Chicago is upper middle class income wise or on the cusp. A lot of households making that and you’d never really know it as they drive Rav4s’, smaller homes, etc.
I feel like $750ish to $1 million is when you really start seeing significant differences in lifestyle and cash flow can keep up when owning second homes, private schools, property taxes, nannies, still saving for retirement, college funds, new q7 / x5 every couple of years, etc.
“I feel like $750ish to $1 million is when you really start seeing significant differences in lifestyle and cash flow can keep up when owning second homes, private schools, property taxes, nannies, still saving for retirement, college funds, new q7 / x5 every couple of years, etc.”
Don’t forget flying vacations to wherever a couple times a year.
And having *all* of that, without sacrificing any of the other things (even if a lot of it isn’t visible), is the distinction b/t UMC and “rich”/U-C.
I’m finally realizing how Sabrina’s mind/world view works
It basically boils down to what she wants exists and what is outside of these wants is impossible or a black hole
She badly wants to be considered UMC, hence setting the bar at $130k HHI
Her 401k is probably at $300k thus $300k is crushing it and anyone w/ more must be super wealthy and no one could ever have $1MM because she doesnt
Chicago is a T1 city because she lives there. And theres no way Austin, Miami, Nashville, et al could be more popular than Chicago with the ‘Yutes
No ‘Yutes want a car because her kids dont drive
etc…
“And having *all* of that, without sacrificing any of the other things (even if a lot of it isn’t visible), is the distinction b/t UMC and “rich”/U-C.”
My demark was the rich can drop $100k for a want w/o out it affecting how they live their life
UMC can, but it will impact their daily lives.
Boats provide a good example for weeding out the rich from middle class, just listen to the bitching at the fueling station.
btw, in 2020, the threshold HHI for the top quintile–ie, 20% of households–was $141,110.
So well more than 20% of households have income over $130k, not 15%
And that top quintile HHI (again, $141k+) is basically 1/3 of married couple families. And 26% off all 35-44 yos, and 29.6% of all 45-54 yos.
https://www.census.gov/data/tables/time-series/demo/income-poverty/cps-hinc/hinc-05.html
“So well more than 20% of households have income over $130k, not 15%“
Just remember, it’s not a lie if you believe it
“Just remember, it’s not a lie if you believe it”
I went off of what Wikipedia said.
So even fewer of the upper middle class are maxing out than we know because only 10% max out in Vanguard and Fidelity and 20% are upper middle class. And that 10% includes the upper classes which are 1% to 2%. Yikes. Less than half of the upper middle class are maxing out.
But, like I said, they can’t get to $1 million by 50 either way.
“A lot of households making that and you’d never really know it as they drive Rav4s’, smaller homes, etc.”
A lot? Do tell.
About 2 million people in Chicago. It’s likely 2% of households.
Is that “a lot”?
You all live in an extreme bubble of the GreenZones. The rest of the city of Chicago is bigger than the GreenZones we talk about.
“25 years of maxing contribution and investing moderating aggressively gets you well over it (right now).”
No one maxes out starting at 25 years old, never loses their job, has kids, switches professions, goes back to school, etc etc. Sorry. Just doesn’t happen. This is why I said I would be interested to see Fidelity and Vanguard’s data on the 10% of their participants who ARE maxing out. How many are under 40? It’s not going to be many.
Life intervenes. You got things to do in your 20s and 30s.
I’m sorry you all are just, frankly, clueless. You either are too old to remember what it’s like to be that age or you don’t have any kids that are old enough to be that age.
It’s fun to see what all the young people are doing at that age though.
But they don’t need to max it out. No one does at that age. It’s not healthy.
Live. Just live your life. Experience it.
There’s so much more to life than retirement.
Lol.
If you put $2400 a year in starting in your 20s you’ll be rich at 65. You will be fine. Don’t let anyone tell you this other nonsense.
No one is “maxing out” in their 20s.
“ I’m sorry you all are just, frankly, clueless. You either are too old to remember what it’s like to be that age or you don’t have any kids that are old enough to be that age.”
My kids don’t do it ergo It doesn’t exist
“ If you put $2400 a year in starting in your 20s you’ll be rich at 65. You will be fine. Don’t let anyone tell you this other nonsense.”
If one considers $130k HHI UMC, then I guess it makes sense that you’d view having $380k at 65 as rich. (Assume 6% return because only target date funds exist). Also one can ignore inflation because reasons.
“ Life intervenes. You got things to do in your 20s and 30s.”
So you’re claiming that one cannot do anything in there 20s & 30s if they max out their 401k? The way you project is quite funny. Just because you didn’t, i guess it can’t be done.
“ If you put $2400 a year in starting in your 20s you’ll be rich at 65. You will be fine. Don’t let anyone tell you this other nonsense.”
No one said they will continue to put in $2400 a year later in life. They are NOT UMC in their 20s. Few are.
Like most do, they will raise the amount they put as they get older because they will be earnings more money. Peak earnings is in mid-40s for most people (coincidentally, or not, that’s when most people are maxing out. Go figure.)
Again, life intervenes. You have to LIVE. For the younger people on this blog, don’t listen to the oldies like JohnnyU and Bob who tell you to live your life in fear. Fear of a recession. Fear of a housing bust. Fear of buying a house. Fear of not having enough money in retirement. Fear, fear, fear.
Doom and gloom.
Live your life. You don’t need to max out in your 20s to have a great retirement. The whole point is simply to start, and start as young as you can. TIME is on your side. It is much more powerful than “maxing out” which is why you can’t read $1 million at age 50. You haven’t had enough TIME.
The reason the Abbott Lab secretary had $7 million when she died in her 90s was time. She got shares 70 years previously. It simply compounded through all those recessions, wars, housing booms and busts.
Don’t listen to the bears here.
Putting in $2400 a year in your 20s is fine. You will have plenty for retirement as long as you continue to save.
Otherwise, live your life. See the world. Enjoy.
I can’t wait to see what you do in your careers and for the world.
“why you can’t rea[ch] $1 million at age 50.”
Bananas!
You ABSOLUTELY could have over the past 25 years. And that includes the DotCom bust and the Great Recession. The past 5 years have been *that good*.
“And that includes the DotCom bust and the Great Recession. The past 5 years have been *that good*.”
Nope.
Don’t listen to him. It’s just silly at this point.
We’re at the point where everyone is so rich they can max out at age 25, they never change jobs or go out of the work force for any reason, and the stock market never enters into another bear market.
Lol.
Hilarious.