Ask HN: Upper Middle Class Crunch?
18 by sp527 | 13 comments on Hacker News.
It seems (in the US) landing in the upper middle class means that you might face an unusually bad crunch in finances and lifestyle, despite making a salary at or above 95th %: (1) There's a gray zone in financial aid, so you could be upper middle in gross household salary (say $150-250k; outside the Bay Area) and be expected to pay full bill at a private college (right now ~$250K). Costs may keep inflating at a rate multiple % above inflation, implying a worse crunch in the future. Much of the surplus savings people in high-paying jobs are accruing will be garnished by colleges in the form of increased tuition + room and board down the road. In a weird way, you could argue this affects the decisionmaking about the number of kids you can have. (2) High salary + need enough space => moving away from the city, a massive detractor from wellbeing. The obvious problem is the commute; the less obvious one is becoming disconnected from friends, which is particularly acute in 'transient cities' like SF and NYC. Marginal commuting costs also somewhat offset the marginal gains of a high-paying job that's further away. (3) High-paying jobs generally mean longer hours, increased stress, and are often higher risk. Vacation in the US tends to be very low. These days there's also an increasing obligation to be 'always on'. (4) Some costs tend to scale with salary: prop taxes near high-salary regions, insurance. Home ownership itself (arguably unrelated to being upper middle) is usually net losing or poor ROI vs renting. So it seems like a surprisingly bad game to be upper middle class: you work harder to make not that much more marginal wealth, with less time to live well and (likely) fewer enriching social connections. What are some ways to hack around this? Save up in the US and then move to France or Germany just before your kids go to college? Squirrel away assets to shield them (legally) from financial aid calculations? What else?
It seems (in the US) landing in the upper middle class means that you might face an unusually bad crunch in finances and lifestyle, despite making a salary at or above 95th %: (1) There's a gray zone in financial aid, so you could be upper middle in gross household salary (say $150-250k; outside the Bay Area) and be expected to pay full bill at a private college (right now ~$250K). Costs may keep inflating at a rate multiple % above inflation, implying a worse crunch in the future. Much of the surplus savings people in high-paying jobs are accruing will be garnished by colleges in the form of increased tuition + room and board down the road. In a weird way, you could argue this affects the decisionmaking about the number of kids you can have. (2) High salary + need enough space => moving away from the city, a massive detractor from wellbeing. The obvious problem is the commute; the less obvious one is becoming disconnected from friends, which is particularly acute in 'transient cities' like SF and NYC. Marginal commuting costs also somewhat offset the marginal gains of a high-paying job that's further away. (3) High-paying jobs generally mean longer hours, increased stress, and are often higher risk. Vacation in the US tends to be very low. These days there's also an increasing obligation to be 'always on'. (4) Some costs tend to scale with salary: prop taxes near high-salary regions, insurance. Home ownership itself (arguably unrelated to being upper middle) is usually net losing or poor ROI vs renting. So it seems like a surprisingly bad game to be upper middle class: you work harder to make not that much more marginal wealth, with less time to live well and (likely) fewer enriching social connections. What are some ways to hack around this? Save up in the US and then move to France or Germany just before your kids go to college? Squirrel away assets to shield them (legally) from financial aid calculations? What else?
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