1st-year Biglaw NYC - how much for rent? Forum

Tiago Splitter · Post by **Tiago Splitter** » Sat Sep 27, 2014 4:17 pm

Anonymous User wrote: Assuming you are on track for loan payments is it better to use the remainder to max out 401ks or for other savings/investments

As I've said in other threads I prefer starting with IRAs for easier access to the money and greater investment options. Once you got the IRA filled up and built a taxable emergency fund (doesn't need to be more than a few thousand) then definitely hit the 401k hard for the tax advantages.

20141023 · Post by **20141023** » Sat Sep 27, 2014 4:38 pm

Anonymous User · Post by **Anonymous User** » Sun Sep 28, 2014 10:37 am

Regulus wrote:
Frayed Knot wrote:
Regulus wrote: Yeah, I didn't want to get into all of that additional stuff since it doesn't drastically change the outcome, but you're right.
Yeah, it's not huge. Still, though, an extra $200-$300/month can get a similar apartment in a building with a doorman (in midtown east, for example—<a href="http://www.nakedapartments.com ... nus $6,700, [url=<a href="http://www.irs.gov/pub/irs-pdf/f1040.pdf#page=3]personal" rel="nofollow" title="Link added by VigLink" class="vglnk">http://www.irs.gov/pub/irs-pdf/f1040.pdf#page=3]personal</a> exemption $3,900[/url], [url=<a href="http://www.irs.gov/pub/irs-pdf/i1040.pdf#page=40]standard" rel="nofollow" title="Link added by VigLink" class="vglnk">http://www.irs.gov/pub/irs-pdf/i1040.pdf#page=40]standard</a> deduction $6,100[/url] / Married: [url=<a href="http://www.irs.gov/pub/irs-pdf/i1040tt.pdf#page=13]28%" rel="nofollow" title="Link added by VigLink" class="vglnk">http://www.irs.gov/pub/irs-pdf/i1040tt.pdf#page=13]28%</a> minus $12,500[/url], [url=<a href="http://www.irs.gov/pub/irs-pdf/f1040.pdf#page=3]personal" rel="nofollow" title="Link added by VigLink" class="vglnk">http://www.irs.gov/pub/irs-pdf/f1040.pdf#page=3]personal</a> exemption $7,800[/url], [url=<a href="http://www.irs.gov/pub/irs-pdf/i1040.pdf#page=40]standard" rel="nofollow" title="Link added by VigLink" class="vglnk">http://www.irs.gov/pub/irs-pdf/i1040.pdf#page=40]standard</a> deduction $12,200[/url])[/size]
[State] Single: $8,372 / Married: $9,304
(Single: [url=<a href="http://www.tax.ny.gov/pdf/current_forms ... df#page=56]$4,651" rel="nofollow" title="Link added by VigLink" class="vglnk">http://www.tax.ny.gov/pdf/current_forms/it/it201i.pdf#page=56]$4,651</a> plus 6.65% on the excess over $77,150[/url], [url=<a href="http://www.tax.ny.gov/pdf/current_forms ... df#page=24]standard" rel="nofollow" title="Link added by VigLink" class="vglnk">http://www.tax.ny.gov/pdf/current_forms/it/it201i.pdf#page=24]standard</a> deduction $7,700[/url] / Married: [url=<a href="http://www.tax.ny.gov/pdf/current_forms ... df#page=56]$9,304" rel="nofollow" title="Link added by VigLink" class="vglnk">http://www.tax.ny.gov/pdf/current_forms/it/it201i.pdf#page=56]$9,304</a> plus 6.65% on the excess over $154,350[/url], [url=<a href="http://www.tax.ny.gov/pdf/current_forms ... df#page=24]standard" rel="nofollow" title="Link added by VigLink" class="vglnk">http://www.tax.ny.gov/pdf/current_forms/it/it201i.pdf#page=24]standard</a> deduction $15,400[/url])
[Social Security] $7,254
[url=<a href="http://www.ssa.gov/news/press/factsheet ... s2014.html" rel="nofollow" title="Link added by VigLink" class="vglnk">http://www.ssa.gov/news/press/factsheets/colafacts2014.html</a>](6.2% on all earnings up to $117,000)[/url]
[City] Single: $4,737 / Married: $4,362
(Single: [url=<a href="http://www.tax.ny.gov/pdf/current_forms ... df#page=68]$1,706" rel="nofollow" title="Link added by VigLink" class="vglnk">http://www.tax.ny.gov/pdf/current_forms/it/it201i.pdf#page=68]$1,706</a> plus 3.648% of the excess over $50,000[/url] / Married: [url=<a href="http://www.tax.ny.gov/pdf/current_forms ... df#page=68]$3,071" rel="nofollow" title="Link added by VigLink" class="vglnk">http://www.tax.ny.gov/pdf/current_forms/it/it201i.pdf#page=68]$3,071</a> plus 3.648% of the excess over $90,000[/url])
[Medicare] $2,042
([url=<a href="http://www.ssa.gov/news/press/factsheet ... s2014.html]1.45%" rel="nofollow" title="Link added by VigLink" class="vglnk">http://www.ssa.gov/news/press/factsheets/colafacts2014.html]1.45%</a> on all earnings%[/url])
[Total Deductions] Single: $52,329 / Married: $44,286

Based on the above, you would be left with:

[Annual Remainder] Single: $88,471 / Married: $96,514
[Monthly Take-home] Single: $7,373 / Married: $8,043

Since the above numbers already include payments for 401(k) and Transit, you just have to subtract health insurance (~$300/month) and other stuff from them to get the actual amount you will have to work with each month. (Of course, 401(k) is tax-deferred so you will eventually have to pay taxes on that, but that doesn't really matter when considering the above calculations.)

Edit: If health insurance is also a pre-tax deduction, that will change the numbers a little bit as well.
Great post, thanks! If people can confirm this is correct, this post should be made a sticky.

Will I get a refund if I live in Hoboken? or is the 3.5 not taken out of my paycheck?

soj · Post by **soj** » Sun Sep 28, 2014 11:17 am

Big Dog · Post by **Big Dog** » Sun Sep 28, 2014 11:47 am

I prefer starting with IRAs for easier access to the money and greater investment options.

Huh? They are retirement accounts. Think long-term. Most 401ks now have plenty of investment options, but yes IRA's have a bunch more, few of which are worth looking at (since they come with expensive loads). Also, you may not be able to trade for your individual stock in a 401k, but if you are that good of a picker, you should not be a lawyer -- get a computer and invest your portfolio from your yacht in the Caymans. For the rest of us, a no-load S&P500 fund is a easy pick.

What access do you need them for? 401k's have a feature that you can use to borrow against them for certain uses in which the interest you pay is to yourself (assuming the Firm adopted that Plan feature.) IRA's have no such feature. Most distributions are subject to tax and penalty. (yes, there are exceptions, but will you be spending more money for school anytime soon? Is your Firm's medical plan that bad?)

Personally, I'd think about maxing out the 401k for the tax deferral, particularly in NYC, and then paying down school loans.

Bank Rate has a few simple charts/questions to consider (since the answer is not the same for everyone):

http://www.bankrate.com/finance/retirem ... rst-1.aspx

Tiago Splitter · Post by **Tiago Splitter** » Sun Sep 28, 2014 11:57 am

Big Dog wrote:
I prefer starting with IRAs for easier access to the money and greater investment options.
Huh? They are retirement accounts. Think long-term. Most 401ks now have plenty of investment options, but yes IRA's have a bunch more, few of which are worth looking at (since they come with expensive loads). Also, you may not be able to trade for your individual stock in a 401k, but if you are that good of a picker, you should not be a lawyer -- get a computer and invest your portfolio from your yacht in the Caymans. For the rest of us, a no-load S&P500 fund is a easy pick.

What access do you need them for? 401k's have a feature that you can use to borrow against them for certain uses in which the interest you pay is to yourself (assuming the Firm adopted that Plan feature.) IRA's have no such feature. Most distributions are subject to tax and penalty. (yes, there are exceptions, but will you be spending more money for school anytime soon? Is your Firm's medical plan that bad?)

Personally, I'd think about maxing out the 401k for the tax deferral, particularly in NYC, and then paying down school loans.

Bank Rate has a few simple charts/questions to consider (since the answer is not the same for everyone):

http://www.bankrate.com/finance/retirem ... rst-1.aspx

If you need access to the money in case of an emergency IRAs are much better than 401k's. As you indicated, the plan sponsor needs to elect to allow for loans, and many plan sponsors won't make this election. You're also limited in how much you can borrow; fifty percent of the account value up to 50k. Someone building an emergency fund should just toss $5500 into their Roth and then save in a taxable account. If something happens they can grab the money back out of the Roth tax and penalty free, and if no emergency arises they'll have a nice chunk of change now growing tax-free. I'll concede that for some segment of the population access to money is a bad thing and those people might be better off using the 401k exclusively.

As for investment options, your comment that IRA investment options "come with expensive loads" is just bizarre. It's incredibly easy to find no-load options, particularly with ETF's, which accomplish the same thing as mutual funds but with far lower costs. Most 401k plan investment options are expensive mutual funds, so for someone looking to get cheaper investment options the IRA is usually far better. If you insist on mutual funds go to Schwab or Vanguard and buy the index funds that have expense ratios under ten basis points.

All that said, $5500 a year is not going to cut it for most of us, so people should be saving both in an IRA and in their 401k. It's not an either/or proposition.

Rahviveh · Post by **Rahviveh** » Sun Sep 28, 2014 3:03 pm

Anonymous User wrote:
Regulus wrote:
Frayed Knot wrote:
Regulus wrote: Yeah, I didn't want to get into all of that additional stuff since it doesn't drastically change the outcome, but you're right.
Yeah, it's not huge. Still, though, an extra $200-$300/month can get a similar apartment in a building with a doorman (in midtown east, for example—<a href="http://www.nakedapartments.com ... nus $6,700, [url=<a href="http://www.irs.gov/pub/irs-pdf/f1040.pdf#page=3]personal" rel="nofollow" title="Link added by VigLink" class="vglnk">http://www.irs.gov/pub/irs-pdf/f1040.pdf#page=3]personal</a> exemption $3,900[/url], [url=<a href="http://www.irs.gov/pub/irs-pdf/i1040.pdf#page=40]standard" rel="nofollow" title="Link added by VigLink" class="vglnk">http://www.irs.gov/pub/irs-pdf/i1040.pdf#page=40]standard</a> deduction $6,100[/url] / Married: [url=<a href="http://www.irs.gov/pub/irs-pdf/i1040tt.pdf#page=13]28%" rel="nofollow" title="Link added by VigLink" class="vglnk">http://www.irs.gov/pub/irs-pdf/i1040tt.pdf#page=13]28%</a> minus $12,500[/url], [url=<a href="http://www.irs.gov/pub/irs-pdf/f1040.pdf#page=3]personal" rel="nofollow" title="Link added by VigLink" class="vglnk">http://www.irs.gov/pub/irs-pdf/f1040.pdf#page=3]personal</a> exemption $7,800[/url], [url=<a href="http://www.irs.gov/pub/irs-pdf/i1040.pdf#page=40]standard" rel="nofollow" title="Link added by VigLink" class="vglnk">http://www.irs.gov/pub/irs-pdf/i1040.pdf#page=40]standard</a> deduction $12,200[/url])[/size]
[State] Single: $8,372 / Married: $9,304
(Single: [url=<a href="http://www.tax.ny.gov/pdf/current_forms ... df#page=56]$4,651" rel="nofollow" title="Link added by VigLink" class="vglnk">http://www.tax.ny.gov/pdf/current_forms/it/it201i.pdf#page=56]$4,651</a> plus 6.65% on the excess over $77,150[/url], [url=<a href="http://www.tax.ny.gov/pdf/current_forms ... df#page=24]standard" rel="nofollow" title="Link added by VigLink" class="vglnk">http://www.tax.ny.gov/pdf/current_forms/it/it201i.pdf#page=24]standard</a> deduction $7,700[/url] / Married: [url=<a href="http://www.tax.ny.gov/pdf/current_forms ... df#page=56]$9,304" rel="nofollow" title="Link added by VigLink" class="vglnk">http://www.tax.ny.gov/pdf/current_forms/it/it201i.pdf#page=56]$9,304</a> plus 6.65% on the excess over $154,350[/url], [url=<a href="http://www.tax.ny.gov/pdf/current_forms ... df#page=24]standard" rel="nofollow" title="Link added by VigLink" class="vglnk">http://www.tax.ny.gov/pdf/current_forms/it/it201i.pdf#page=24]standard</a> deduction $15,400[/url])
[Social Security] $7,254
[url=<a href="http://www.ssa.gov/news/press/factsheet ... s2014.html" rel="nofollow" title="Link added by VigLink" class="vglnk">http://www.ssa.gov/news/press/factsheets/colafacts2014.html</a>](6.2% on all earnings up to $117,000)[/url]
[City] Single: $4,737 / Married: $4,362
(Single: [url=<a href="http://www.tax.ny.gov/pdf/current_forms ... df#page=68]$1,706" rel="nofollow" title="Link added by VigLink" class="vglnk">http://www.tax.ny.gov/pdf/current_forms/it/it201i.pdf#page=68]$1,706</a> plus 3.648% of the excess over $50,000[/url] / Married: [url=<a href="http://www.tax.ny.gov/pdf/current_forms ... df#page=68]$3,071" rel="nofollow" title="Link added by VigLink" class="vglnk">http://www.tax.ny.gov/pdf/current_forms/it/it201i.pdf#page=68]$3,071</a> plus 3.648% of the excess over $90,000[/url])
[Medicare] $2,042
([url=<a href="http://www.ssa.gov/news/press/factsheet ... s2014.html]1.45%" rel="nofollow" title="Link added by VigLink" class="vglnk">http://www.ssa.gov/news/press/factsheets/colafacts2014.html]1.45%</a> on all earnings%[/url])
[Total Deductions] Single: $52,329 / Married: $44,286

Based on the above, you would be left with:

[Annual Remainder] Single: $88,471 / Married: $96,514
[Monthly Take-home] Single: $7,373 / Married: $8,043

Since the above numbers already include payments for 401(k) and Transit, you just have to subtract health insurance (~$300/month) and other stuff from them to get the actual amount you will have to work with each month. (Of course, 401(k) is tax-deferred so you will eventually have to pay taxes on that, but that doesn't really matter when considering the above calculations.)
Idea
Edit: If health insurance is also a pre-tax deduction, that will change the numbers a little bit as well.
Great post, thanks! If people can confirm this is correct, this post should be made a sticky.

Will I get a refund if I live in Hoboken? or is the 3.5 not taken out of my paycheck?
Regulus your numbers seem to a bit high compared to this ATL article any idea what the discrepancy is
http://abovethelaw.com/career-files/bud ... rt-1-160k/

Anonymous User · Post by **Anonymous User** » Sun Sep 28, 2014 4:24 pm

I think it includes 401k contributions and withholding =/= final total tax liability for the year?

"This gives you a monthly income of $6,497.16 after deducting for taxes and 401(k) contributions."

styr · Post by **styr** » Sun Sep 28, 2014 4:42 pm

Anonymous User wrote:I think it includes 401k contributions and withholding =/= final total tax liability for the year?

Right. If you have other income, deductions, credits, or if you're married, your total tax liability could be considerably different, resulting in you getting a big fat tax refund / bill due in April. See also my next post.

styr · Post by **styr** » Sun Sep 28, 2014 4:42 pm

Sorry for the rant, but I couldn't pass this up. TL;DR: minimize rent, live close to work, and don't get married before you retire!

AReasonableMan wrote:I think for most of us, an hour more a day is worth a few hundred dollars a month, particularly if we make what like eighty-five per hour?

I agree that living close to work can be good, but I'm not sure about the calculus. Do first-year associates really make $85/hr? Figure if your salary is $160K/yr, and you need to bill at least 2000 hours a year, you're spending a lot more than 2000 hours in the office. Planning conservatively, $60/hr may be a better estimate of pre-tax hourly pay as a first-year. That said, even if the difference in rent is a few hundred bucks, it's best not to look at it in dollars per unit of commuting time. The amount you make per hour of non-personal time (lumping office time and commute time together) goes down considerably when you have to sit on a train for 90 minutes each way every day. You can't bill that time, and there may just not be enough hours in the day some days. Also, for what little time you might get to spend away from the office, it's also pain in the ass if you're at home and there's nothing nearby (restaurants, groceries, entertainment), because that means you have to spend more time commuting to other places as well.

You also can't put a price on sanity (maybe why so many quit biglaw early, in the end). Also, live close to work, but don't live too close to work, or else you may end up having undesirable contact with coworkers when you least want to see them. Something involving 10-20 minutes of walking may be good to separate your mind from work and home, provide some reason to get daily exercise, and avoid people you don't want to see all the time.

AReasonableMan wrote:How much does being married save? Per kid? Curious as to what point misery becomes worthwhile.

Chances are, if your spouse works at all, being married won't save you anything over shacking up. It could actually be a stiff penalty in the way of taxes (federal, state, and local - state and local tax marriage penalties can be quite steep). In my cursory calculations, marriage doesn't make sense to me unless I were retiring and looking to claim Social Security benefits. That said, if your spouse does not have any income, that may put you in a lower tax bracket and save you a chunk of change every year, maybe a few hundred or maybe even a few thousand. Chances are, though, if your spouse sits at home and does nothing while you slave away at the firm for 90 hours a week, a part of your salary is paying for your spouse's frivolous entertainment and extramarital affair(s). Add to that the legal liabilities of marriage - even if you have an "ironclad" pre-nup (no such thing) and non-commingled funds - I'm no family law expert, but it seems there are some money moves you can't do without spousal consent, even in non-community-property states.

If your spouse is also working in biglaw, you most likely will trigger the Medicare surtax (0.9% on earned income and 3.8% on net investment income) as well as phaseouts of itemized deductions and personal exemptions, at which point it won't matter how many kids you have (welcome to the 1%, you filthy rich heartless bastards!). Even if you can deduct $4000 per kid per year (of which you actually save your marginal tax rate), that's a drop in the bucket compared to what it actually costs to raise a child in an expensive place, typically well upwards of $400K per kid.

While I get the societal value of progressive tax systems, I'm almost a little surprised that there has never been any adjustment of tax brackets and deduction cut-offs/phaseouts for people who live in expensive cities, sort of like locality pay for federal government workers. Even if you and your spouse make a combined $320K per year, plus bonuses and raises after that, you sure don't feel rich after you lose half of that in taxes, half of the rest in rent, and another $1K-$2K a month in student loan payments. In the end, your take-home pay (after taxes and living expenses) at least for the first several years is on par with what you might make in a smaller town with a mediocre job only requiring a bachelor's degree.

AReasonableMan wrote:Rent money is all money down the drain, essentially. It's not an investment. You'll never see it again.

That's true, so you may as well minimize it any way you reasonably can. That said, owning real estate in Manhattan isn't much better, because the property taxes are so obscene - substitute one landlord for another. It's bad enough if you can pony up the millions in cash, but if you take out a mortgage, then on top of property taxes, you're also pissing away mortgage interest, which you probably can't deduct if you're in a biglaw marriage or are an unmarried senior associate.

Anyway, enjoy New York and live it up while you're still young!

911 crisis actor · Post by **911 crisis actor** » Sun Sep 28, 2014 4:57 pm

Broker once showed me $2k studio in an elevator doorman building that was right next door to my firm

Like literally right next door

I ran away screaming

20141023 · Post by **20141023** » Mon Sep 29, 2014 12:50 am

sinfiery · Post by **sinfiery** » Mon Sep 29, 2014 5:10 am

Awesome, Regulus!

I would be really interested in what the amount of the takehome pay would be if you put $0 into your 401k but still had itemized deductions. Without firms matching your contribution, I am seriously considering not bothering.

Also, it seems the IRS lets you pick your tax income year. (Does biglaw let you do this?)

So, if you went from February - February after graduation (Assuming you start working in October), you would be right around the 63k mark for taxable income and could claim the Lifelong Education tax credit (-$2000 credit) both your 2L summer and stub year.

Frayed Knot · Post by **Frayed Knot** » Mon Sep 29, 2014 8:29 am

Regulus wrote:Edit: I find it kind of lulzy that the assumption ITT is that one's spouse is also going to be a biglaw lawyer making $160,000+. There are plenty of us with spouses who don't work or who work in fields unrelated to the law.

But, for those who are curious, here are the numbers for double-biglaw:

Without 401k Contributions
Gross: $320,000
Payroll Tax: $20,228 (SS, Medicare w/ .9% on income over $200,000)
NY State: $20,342
NYC: $11,461
Federal: $68,435

Annual Net: $199,533.47
Monthly Net: $16,627.79
Average Tax Rate: 37.65% (gross pay/total tax)

With Maximum 401k Contributions
Gross: $285,000
Payroll Tax: $19,405.50 (SS, Medicare w/ .9% on income over $200,000)
NY State: $17,992
NYC: $10,184.6
Federal: $58,082.15

Annual Net: $179,335.53
Monthly Net: $14,944.63
Average Tax Rate: 37.08% (gross pay/total tax)

Anonymous User · Post by **Anonymous User** » Mon Sep 29, 2014 9:04 am

Frayed Knot wrote:
Regulus wrote:Edit: I find it kind of lulzy that the assumption ITT is that one's spouse is also going to be a biglaw lawyer making $160,000+. There are plenty of us with spouses who don't work or who work in fields unrelated to the law.
But, for those who are curious, here are the numbers for double-biglaw:

Without 401k Contributions
Gross: $320,000
Payroll Tax: $20,228 (SS, Medicare w/ .9% on income over $200,000)
NY State: $20,342
NYC: $11,461
Federal: $68,435

Annual Net: $199,533.47
Monthly Net: $16,627.79
Average Tax Rate: 37.65% (gross pay/total tax)

With Maximum 401k Contributions
Gross: $285,000
Payroll Tax: $19,405.50 (SS, Medicare w/ .9% on income over $200,000)
NY State: $17,992
NYC: $10,184.6
Federal: $58,082.15

Annual Net: $179,335.53
Monthly Net: $14,944.63
Average Tax Rate: 37.08% (gross pay/total tax)

Thanks for this.

When I think if the effective tax rate on people w mainly passive income this makes me want to puke. it wouldnt if our system allowed the majority of hard working pple to have disposable income

UnfrozenCaveman · Post by **UnfrozenCaveman** » Tue Sep 30, 2014 9:59 am

I know it differs, but does anyone have numbers for deducted insurance costs? For married? For married w/family? This would affect your monthly take home, and IIRC it is a pre-tax deduction so it would also affect your taxable income.

20141023 · Post by **20141023** » Tue Sep 30, 2014 11:08 am

styr · Post by **styr** » Tue Sep 30, 2014 2:02 pm

Regulus wrote:
UnfrozenCaveman wrote:I know it differs, but does anyone have numbers for deducted insurance costs? For married? For married w/family? This would affect your monthly take home, and IIRC it is a pre-tax deduction so it would also affect your taxable income.
Are there any NYC biglaw lawyers here who know what the actually monthly insurance payments are for single (I know we've been saying "around $300) / married / per additional child? And just to confirm, health insurance is actually a pre-tax deduction, right?

Yes, employee-sponsored health insurance is not taxed. It even lowers your tax base for Medicare and SS, although the SS part makes no difference if you gross well over $120K, because you max it out anyway.

People are probably just throwing out average figures for insurance rates because they vary wildly depending on what the employer offers and which plan the employee selects. For single people, I've heard things ranging from bare-bones plans at $150/mo. to "Cadillac" plans approaching $600/mo. Double that if you extend coverage to spouse/family. Some plans differentiate for "couples" versus "families" whereas others do not. If your spouse has coverage already, you may not need to get a couple/family plan, even if you are married.

Also, kudos for the biglaw couple tax simulations. I'm fortunate enough not to have dated other lawyers, but in a big city with a lot of law students, lawyers, and law firms, it's not unusual to find a lawyer at a big firm married to another lawyer at a big firm, even if that is a minority of lawyer marriages as a whole. I know a handful of such couples myself, and it's not all that surprising how they got together. I'd be surprised if there were an office of more than a hundred attorneys without at least a few married to other biglaw attorneys. Also, if your spouse rakes in big bucks on Wall Street or is a successful business owner, you may still have tax pitfalls to worry about.

For those who work all day and have spouses who stay at home with nothing keeping them busy, all I can say is watch out!

Anonymous User wrote:When I think [o]f the effective tax rate on people w[ith] mainly passive income this makes me want to puke. t wouldn[']t if our system allowed the majority of hard working p[eo]ple to have disposable income[.]

Ditto - those tax laws are bought and paid for by passive income. I'll bet that part of the tax code was originally passed under the pretense of old people who have saved up and can't work any more, but those people clearly are not the main beneficiaries if you look at the dollar amounts.

We could have a big debate about tax policy here, but that means nothing if politicians don't address it, and they probably won't bother if their biggest donors are mostly trust fund babies.

Just minimize what expenses you can while raking in the big bucks, then retire in some place cheap. Good luck!

Anonymous User · Post by **Anonymous User** » Tue Sep 30, 2014 2:34 pm

Would spending 5.5K a month be ridiculous for a couple (unmarried) of big law 1st years with no debt?

Frayed Knot · Post by **Frayed Knot** » Tue Sep 30, 2014 2:47 pm

Anonymous User wrote:Would spending 5.5K a month be ridiculous for a couple (unmarried) of big law 1st years with no debt?

I guess that depends on what you mean by "ridiculous" and what your medium-term plans are. It's definitely something you could afford on that salary if you're not trying to maximize savings or planning to have kids soon.

On the other hand, I'm not sure what that last $1–2k is getting you, since $3.5-4.5k would already get you a 2 bedroom in a good location. And given that you don't know where you'll be in 5 years, I'd say there's real value in an extra cash cushion. (Odds are really good that at least one of y'all will be in a lower paying job within 5 years.)

Finally—even aside from the value of that cash cushion—I'd be a bit afraid of the Golden Handcuffs issue. It's amazing how easily people get used to something and then "can't" drop down to a lower standard of living. It'd be a shame to feel stuck in your job if some dream position opened up paying "only" 100k, for example. (Or to feel that you can't afford kids, etc.)

Mal Reynolds · Post by **Mal Reynolds** » Tue Sep 30, 2014 2:48 pm

Why not 7k?

20141023 · Post by **20141023** » Tue Sep 30, 2014 3:17 pm

Frayed Knot · Post by **Frayed Knot** » Tue Sep 30, 2014 3:24 pm

Regulus wrote: I have mostly given up on kids because it will drain not only on my usable income but also on my ability to bill more hours.

See, that's when I think K-JDs have it figured out. They can graduate by 25, and then have flamed out of BigLaw by early 30's with time to have kids. (Or in theory I suppose they could make partner and have enough money to pay someone else to raise kids they see once a month.)

They win either way!

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