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Re: 160K after taxes, NYC, and living costs?

Posted: Wed Oct 02, 2013 4:20 pm
by thesealocust
sumner wrote:
Tiago Splitter wrote:
sumner wrote:K-JD 2L here- i was reading through the thread and noticed people were accounting for 5k a year into an IRA. just for my own education, is that really necessary? does a 26 year-old need to be dumping 5k into his IRA per year?

Are you asking whether you should be putting money into an IRA instead of paying down loans? Or are you asking whether you should be saving at all?

If it's the first question, there are arguments going both ways and either is justified. If it's the second, yes, saving is good. IRAs just give you tax advantages not available in traditional savings accounts.


yeah this is independent of any debt questions. I know I'm one of the few 23 year olds with an IRA I just wasn't planning on putting that much money in it per year at this point in my life. I figured it would be more prudent to put that money in a savings account for a down payment or a wedding.

It just seemed like a lot so I was wondering if that was the norm.


You can withdraw the principal from a [roth] IRA without penalty any time, so if you were otherwise going to be saving/investing, there's no reason not to use a [roth] IRA as the vehicle up to the limit.

Everyone has different burdens, lifestyles, levels of frugality, goals, etc. It's probably smart to always shoot for a minimum of 5% to 10% of your income saving for retirement to get in the habit, but certainly there's no rule that you need to be aggressively planning to retire as soon as you start your first job.

I am though. Still planning to retire by 30.

Re: 160K after taxes, NYC, and living costs?

Posted: Wed Oct 02, 2013 4:24 pm
by Anonymous User
thesealocust wrote:
sumner wrote:
Tiago Splitter wrote:
sumner wrote:K-JD 2L here- i was reading through the thread and noticed people were accounting for 5k a year into an IRA. just for my own education, is that really necessary? does a 26 year-old need to be dumping 5k into his IRA per year?

Are you asking whether you should be putting money into an IRA instead of paying down loans? Or are you asking whether you should be saving at all?

If it's the first question, there are arguments going both ways and either is justified. If it's the second, yes, saving is good. IRAs just give you tax advantages not available in traditional savings accounts.


yeah this is independent of any debt questions. I know I'm one of the few 23 year olds with an IRA I just wasn't planning on putting that much money in it per year at this point in my life. I figured it would be more prudent to put that money in a savings account for a down payment or a wedding.

It just seemed like a lot so I was wondering if that was the norm.


You can withdraw the principal from an IRA without penalty any time, so if you were otherwise going to be saving/investing, there's no reason not to use an IRA as the vehicle up to the limit.

Everyone has different burdens, lifestyles, levels of frugality, goals, etc. It's probably smart to always shoot for a minimum of 5% to 10% of your income saving for retirement to get in the habit, but certainly there's no rule that you need to be aggressively planning to retire as soon as you start your first job.

I am though. Still planning to retire by 30.


if serious, curious how much you'll be worth at that point (through BigLaw I assume)

Also how much liquid? I mean having a couple mil in real estate is great but still tough to live like a retired king when you're spending all your rent checks on mortgage payments just building equity

anon because similar aspirations, decent worth right now but dont want to out my financial situation

Re: 160K after taxes, NYC, and living costs?

Posted: Wed Oct 02, 2013 4:40 pm
by guano
Anonymous User wrote:
thesealocust wrote:
sumner wrote:
Tiago Splitter wrote:
yeah this is independent of any debt questions. I know I'm one of the few 23 year olds with an IRA I just wasn't planning on putting that much money in it per year at this point in my life. I figured it would be more prudent to put that money in a savings account for a down payment or a wedding.

It just seemed like a lot so I was wondering if that was the norm.


You can withdraw the principal from an IRA without penalty any time, so if you were otherwise going to be saving/investing, there's no reason not to use an IRA as the vehicle up to the limit.

Everyone has different burdens, lifestyles, levels of frugality, goals, etc. It's probably smart to always shoot for a minimum of 5% to 10% of your income saving for retirement to get in the habit, but certainly there's no rule that you need to be aggressively planning to retire as soon as you start your first job.

I am though. Still planning to retire by 30.


if serious, curious how much you'll be worth at that point (through BigLaw I assume)

Also how much liquid? I mean having a couple mil in real estate is great but still tough to live like a retired king when you're spending all your rent checks on mortgage payments just building equity

anon because similar aspirations, decent worth right now but dont want to out my financial situation

When you have no earned income you should not have a mortgage. (Unless for tax/leverage purposes)

Re: 160K after taxes, NYC, and living costs?

Posted: Wed Oct 02, 2013 4:45 pm
by Anonymous User
thesealocust wrote:
sumner wrote:
Tiago Splitter wrote:
sumner wrote:K-JD 2L here- i was reading through the thread and noticed people were accounting for 5k a year into an IRA. just for my own education, is that really necessary? does a 26 year-old need to be dumping 5k into his IRA per year?

Are you asking whether you should be putting money into an IRA instead of paying down loans? Or are you asking whether you should be saving at all?

If it's the first question, there are arguments going both ways and either is justified. If it's the second, yes, saving is good. IRAs just give you tax advantages not available in traditional savings accounts.


yeah this is independent of any debt questions. I know I'm one of the few 23 year olds with an IRA I just wasn't planning on putting that much money in it per year at this point in my life. I figured it would be more prudent to put that money in a savings account for a down payment or a wedding.

It just seemed like a lot so I was wondering if that was the norm.


You can withdraw the principal from an IRA without penalty any time, so if you were otherwise going to be saving/investing, there's no reason not to use an IRA as the vehicle up to the limit.

Everyone has different burdens, lifestyles, levels of frugality, goals, etc. It's probably smart to always shoot for a minimum of 5% to 10% of your income saving for retirement to get in the habit, but certainly there's no rule that you need to be aggressively planning to retire as soon as you start your first job.

I am though. Still planning to retire by 30.



This is not true
http://www.irs.gov/uac/What-if-I-withdr ... -my-IRA%3F

Re: 160K after taxes, NYC, and living costs?

Posted: Wed Oct 02, 2013 4:52 pm
by Tiago Splitter
Anonymous User wrote:
thesealocust wrote:You can withdraw the principal from an IRA without penalty any time, so if you were otherwise going to be saving/investing, there's no reason not to use an IRA as the vehicle up to the limit.



This is not true
http://www.irs.gov/uac/What-if-I-withdr ... -my-IRA%3F

Pretty sure he meant Roth IRA.

Re: 160K after taxes, NYC, and living costs?

Posted: Wed Oct 02, 2013 5:02 pm
by horseradish
Tiago Splitter wrote:
Anonymous User wrote:
thesealocust wrote:You can withdraw the principal from an IRA without penalty any time, so if you were otherwise going to be saving/investing, there's no reason not to use an IRA as the vehicle up to the limit.



This is not true
http://www.irs.gov/uac/What-if-I-withdr ... -my-IRA%3F

Pretty sure he meant Roth IRA.


Did not mean to be anon before. But its not true for a Roth either.

https://www.fidelity.com/retirement-pla ... withdrawal

Re: 160K after taxes, NYC, and living costs?

Posted: Wed Oct 02, 2013 5:11 pm
by Tiago Splitter
horseradish wrote:
Tiago Splitter wrote:
Anonymous User wrote:
thesealocust wrote:You can withdraw the principal from an IRA without penalty any time, so if you were otherwise going to be saving/investing, there's no reason not to use an IRA as the vehicle up to the limit.



This is not true
http://www.irs.gov/uac/What-if-I-withdr ... -my-IRA%3F

Pretty sure he meant Roth IRA.


Did not mean to be anon before. But its not true for a Roth either.

https://www.fidelity.com/retirement-pla ... withdrawal

It's 100% true. Your own link points this out:

"For Roth IRAs, you can always remove post-tax penalty contributions (also known as “basis”) from your Roth IRA without penalty. "

What it doesn't mention is that this "basis" comes out first, but it does.

http://www.kiplinger.com/article/retire ... rules.html

Re: 160K after taxes, NYC, and living costs?

Posted: Wed Oct 02, 2013 5:23 pm
by Anonymous User
isnt it 170 after taxes. as in, cant you count on a 10g bonus?

also this is obvious but must be pointed out, by year 2 you will have an extra 10k and by years 3 and extra 25k, which means that even if you have to have a roommate for a year as someone lol'd at , by year 2 the extra money can get you your own place, or you an pay off more debt

edit: i didnt mean to respond anon, and dont know how to/ too busy to change it

Re: 160K after taxes, NYC, and living costs?

Posted: Wed Oct 02, 2013 5:26 pm
by horseradish
Tiago, i stand corrected. Good to know.

Re: 160K after taxes, NYC, and living costs?

Posted: Wed Oct 02, 2013 5:27 pm
by wiz
Anonymous User wrote:isnt it 170 after taxes. as in, cant you count on a 10g bonus?

also this is obvious but must be pointed out, by year 2 you will have an extra 10k and by years 3 and extra 25k, which means that even if you have to have a roommate for a year as someone lol'd at , by year 2 the extra money can get you your own place, or you an pay off more debt

edit: i didnt mean to respond anon, and dont know how to/ too busy to change it


I think you mean before taxes, but yeah, last year's market bonus was 10k for year 1.

Re: 160K after taxes, NYC, and living costs?

Posted: Wed Oct 02, 2013 5:31 pm
by thesealocust
Anonymous User wrote:isnt it 170 after taxes. as in, cant you count on a 10g bonus?

also this is obvious but must be pointed out, by year 2 you will have an extra 10k and by years 3 and extra 25k, which means that even if you have to have a roommate for a year as someone lol'd at , by year 2 the extra money can get you your own place, or you an pay off more debt

edit: i didnt mean to respond anon, and dont know how to/ too busy to change it


Bonuses are discretionary. When I applied to law school, market bonuses were $35,000 for 1st years and sometimes firms paid spring bonuses. At the height of the crisis, they fell as low as $2,500.

Also, ATL coverage of bonuses makes things look much more uniform than they are. The biggest firms and the biggest names do lockstep bonuses, but a lot of big V100 firms have wonky nuances which will make bonuses below (and even sometimes above) "market" or else not actually payable to everyone evenly.

Re: 160K after taxes, NYC, and living costs?

Posted: Wed Oct 02, 2013 5:57 pm
by goldeneye
This is sort of related but it's always surprised me that DC pays what NYC does. The col index says it's cheaper. If you live in Virginia or Maryland though, I believe you pay an additional tax.

Re: 160K after taxes, NYC, and living costs?

Posted: Wed Oct 02, 2013 6:00 pm
by Anonymous User
wiz wrote:
Anonymous User wrote:isnt it 170 after taxes. as in, cant you count on a 10g bonus?

also this is obvious but must be pointed out, by year 2 you will have an extra 10k and by years 3 and extra 25k, which means that even if you have to have a roommate for a year as someone lol'd at , by year 2 the extra money can get you your own place, or you an pay off more debt

edit: i didnt mean to respond anon, and dont know how to/ too busy to change it


I think you mean before taxes, but yeah, last year's market bonus was 10k for year 1.



thats what I meant. whoops

Re: 160K after taxes, NYC, and living costs?

Posted: Wed Oct 02, 2013 6:01 pm
by 09042014
goldeneye wrote:This is sort of related but it's always surprised me that DC pays what NYC does. The col index says it's cheaper. If you live in Virginia or Maryland though, I believe you pay an additional tax.


DC is nearly as expensive as MFH.

VA and MD pay less tax than DC.

Re: 160K after taxes, NYC, and living costs?

Posted: Wed Oct 02, 2013 6:07 pm
by guano
goldeneye wrote:This is sort of related but it's always surprised me that DC pays what NYC does. The col index says it's cheaper. If you live in Virginia or Maryland though, I believe you pay an additional tax.

Look at it this way. If you're the typical consumer of biglaw, you probably wouldn't pay a premium to having your work done in NY, if DC cost significantly less

Re: 160K after taxes, NYC, and living costs?

Posted: Wed Oct 02, 2013 6:13 pm
by IAFG
Desert Fox wrote:
goldeneye wrote:This is sort of related but it's always surprised me that DC pays what NYC does. The col index says it's cheaper. If you live in Virginia or Maryland though, I believe you pay an additional tax.


DC is nearly as expensive as MFH.

VA and MD pay less tax than DC.

The only thing I can think of to explain the big COL index difference is that there are still cheap-but-dangerous neighborhoods in the district, and pretty much none on MFH.

Re: 160K after taxes, NYC, and living costs?

Posted: Wed Oct 02, 2013 6:15 pm
by AllTheLawz
goldeneye wrote:This is sort of related but it's always surprised me that DC pays what NYC does. The col index says it's cheaper. If you live in Virginia or Maryland though, I believe you pay an additional tax.


You should see consulting. Pays the same in Atlanta and Pittsburgh as it does in NYC. Always found it shocking that NYC was the most in-demand office at some firms.

Re: 160K after taxes, NYC, and living costs?

Posted: Wed Oct 02, 2013 6:20 pm
by 84651846190
guano wrote:
goldeneye wrote:This is sort of related but it's always surprised me that DC pays what NYC does. The col index says it's cheaper. If you live in Virginia or Maryland though, I believe you pay an additional tax.

Look at it this way. If you're the typical consumer of biglaw, you probably wouldn't pay a premium to having your work done in NY, if DC cost significantly less


Actually, I know for a fact that certain clients are willing to pay more to get NYC attorneys to do certain kinds of corporate work rather than DC attorneys (or attorneys in any other area of the country).

Re: 160K after taxes, NYC, and living costs?

Posted: Wed Oct 02, 2013 6:31 pm
by 09042014
IAFG wrote:
Desert Fox wrote:
goldeneye wrote:This is sort of related but it's always surprised me that DC pays what NYC does. The col index says it's cheaper. If you live in Virginia or Maryland though, I believe you pay an additional tax.


DC is nearly as expensive as MFH.

VA and MD pay less tax than DC.

The only thing I can think of to explain the big COL index difference is that there are still cheap-but-dangerous neighborhoods in the district, and pretty much none on MFH.


Must be. The CNN calculator says MFH is 78% more expensive than DC for housing. Which is absurdly wrong. Good luck finding a decent 1 bed from under 2000 in DC.

Re: 160K after taxes, NYC, and living costs?

Posted: Wed Oct 02, 2013 6:35 pm
by thesealocust
Also, the reason NYC is expensive isn't because everyone there is dumb and self loathing, it's because a lot of people want to be there very badly. If you aren't one of them the cost is stupid. If you are, you derive value from being in NYC, whether or not that's rational. Pay has to be high enough to be worth it, but employers don't need to pay (much of) a premium because - and I know this is hard to understand - some people strongly prefer being in NYC over other areas of the country.

Re: 160K after taxes, NYC, and living costs?

Posted: Wed Oct 02, 2013 7:06 pm
by goldeneye
Desert Fox wrote:
IAFG wrote:
Desert Fox wrote:
goldeneye wrote:This is sort of related but it's always surprised me that DC pays what NYC does. The col index says it's cheaper. If you live in Virginia or Maryland though, I believe you pay an additional tax.


DC is nearly as expensive as MFH.

VA and MD pay less tax than DC.

The only thing I can think of to explain the big COL index difference is that there are still cheap-but-dangerous neighborhoods in the district, and pretty much none on MFH.


Must be. The CNN calculator says MFH is 78% more expensive than DC for housing. Which is absurdly wrong. Good luck finding a decent 1 bed from under 2000 in DC.


That was my original source which seemed wrong, but at least the 1 bedroom you get for a bit over 2000 is inhabitable unlike most in MFH.

Re: 160K after taxes, NYC, and living costs?

Posted: Wed Oct 02, 2013 8:48 pm
by Anonymous User
guano wrote:
Anonymous User wrote:
thesealocust wrote:You can withdraw the principal from an IRA without penalty any time, so if you were otherwise going to be saving/investing, there's no reason not to use an IRA as the vehicle up to the limit.

Everyone has different burdens, lifestyles, levels of frugality, goals, etc. It's probably smart to always shoot for a minimum of 5% to 10% of your income saving for retirement to get in the habit, but certainly there's no rule that you need to be aggressively planning to retire as soon as you start your first job.

I am though. Still planning to retire by 30.


if serious, curious how much you'll be worth at that point (through BigLaw I assume)

Also how much liquid? I mean having a couple mil in real estate is great but still tough to live like a retired king when you're spending all your rent checks on mortgage payments just building equity

anon because similar aspirations, decent worth right now but dont want to out my financial situation

When you have no earned income you should not have a mortgage. (Unless for tax/leverage purposes)


wtf? why would you assume he, I, or anyone would not have any income 4+ years out of law school and in biglaw

Re: 160K after taxes, NYC, and living costs?

Posted: Wed Oct 02, 2013 9:30 pm
by guano
Anonymous User wrote:
guano wrote:
Anonymous User wrote:
thesealocust wrote:You can withdraw the principal from an IRA without penalty any time, so if you were otherwise going to be saving/investing, there's no reason not to use an IRA as the vehicle up to the limit.

Everyone has different burdens, lifestyles, levels of frugality, goals, etc. It's probably smart to always shoot for a minimum of 5% to 10% of your income saving for retirement to get in the habit, but certainly there's no rule that you need to be aggressively planning to retire as soon as you start your first job.

I am though. Still planning to retire by 30.


if serious, curious how much you'll be worth at that point (through BigLaw I assume)

Also how much liquid? I mean having a couple mil in real estate is great but still tough to live like a retired king when you're spending all your rent checks on mortgage payments just building equity

anon because similar aspirations, decent worth right now but dont want to out my financial situation

When you have no earned income you should not have a mortgage. (Unless for tax/leverage purposes)


wtf? why would you assume he, I, or anyone would not have any income 4+ years out of law school and in biglaw

Note that this discussion involved retirement

Re: 160K after taxes, NYC, and living costs?

Posted: Wed Oct 02, 2013 9:31 pm
by thesealocust
As I will retire to blog about Ron Paul '08!~~ from a cabin in the woods, I imagine I will not have any income upon my retirement at the age of 30.

Re: 160K after taxes, NYC, and living costs?

Posted: Wed Oct 02, 2013 9:46 pm
by dixiecupdrinking
These threads are always such shit shows. People get so defensive trying to justify their decisions.

As between NYC and just about any other market, NYC makes less financial sense, at least in the short and medium term and putting aside things like salaries at your likely exit options. NYC taxes and expenses are higher than anywhere else; maybe DC and SF are close, but any true "secondary" market will be cheaper. Yes, you really will pay 40% of your gross income in taxes. If you are really, really torn between two places and money is the deciding factor, then go to Not New York.

That said, you will live VERY comfortably in NYC on a biglaw salary, and when people suggest otherwise it's not only misguided, it's actually insulting to the VAST, VAST majority of people in the city who make MUCH less.

What people actually have a problem with, when they complain about this stuff, is the experience of living in NYC. So if you don't want to live in New York... then, don't live in New York. Problem solved. Otherwise, I'd suggest that, if you do want to live in New York and are reasonably informed about the tradeoffs that entails versus most places in America for everyone who isn't worth at least $10 million, then you will do just fine in biglaw, financially.