No. of Recommendations: 2
It's easy to fund retirement and healthcare on a six-figure engineering salary. It's just about impossible with a $10/hr job.

Ok, just for kicks, lets do some back of envelope calculations.

$10/hr is about $1700/month.

If this person were given back their FICA taxes (both sides), it would amount to $210/month.

Disability insurance* around $20/month.
HSA high deductible insurance* around $500/month.

Federal taxes around $210/month

Studio flat near Dallas** $400/month.
Utilities $225/month (electricity, gas, water, cellphone)
Food $100 (rice and beans in bulk, 100 servings)
Bus pass $65/month
Clothing $100/month

Add it all up, this person has $290 left over each month. I'm sure I've left things out but play along. This is for academic discussion.

So $290/month over 50 years would yield $174,000. If over that time frame their money doubled, roughly $350,000 which with a 4% yield would generate about $1160/month for "retirement".

For them to replace their income, they'd need a portfolio of about $573,000. Or have their investments increase by about 3.2 times. Sounds within the realm of possibility.

So would it be possible to save for "retirement"***? Yes, but everything has to fall just right. Is it a Spartan existence that I would want to endure? No, but I have met people that have done so. And many of the assumptions come down to where you are trying to live. Doing this in rural Georgia is easier then NYC.

Now, increase the income to the US median of $28,000 and it becomes a little easier. Still not a great life but do able.


* extrapolating from my personal rates. No way am I going to fill out a bunch of info and get hounded by email/callers for an academic exercise.

** nearest large metro area to me where I can find data.

*** retirement is not some universal God given right. Not everyone will be able to quit working, just the facts. Retirement age is a relatively new social construct brought about by the very agency we are arguing about.
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