Does $250K per year make you rich?

[Maismom]

I don't think earning 250k a year is not necessarily rich. It all depends...

I think the person is rich when he/she owns houses more than he/she can remember LOL I wish I had that problem.

[LivingAlmostLarge]

Not really. It's a good income.

[MonkeyMama]

Hardly.

In an area like California you would get to keep $125k (half) for yourself, after taxes. Then you have to figure out how to afford a $600k starter home.

But yeah, I had to absolutely bring up the tax angle.

[ummabdullah]

Oh right is it taxed by 50% monkey mama.

Thats interesting. And everyone says europe has high taxes. Sounds like the US is just as bad with fewer shows of how they spend our money.

[LivingAlmostLarge]

The more you make in the US the less you keep. LOL. It's because a lot of the tax breaks get phased out. Also let's not forget AMT.

Of course the really rich like Warren Buffet, etc only pay 15% because they can live off of dividends.

[Tree0164]

I do think $250k is rich-not ultra rich like you don't need to think about paying for retirement etc.

I live in one of those high cost of living spots and we only make 100k. However we are frugal too.....

[PrincessPerky]

MM, is that a straight 50% off the top? When I think of 50% to taxes I generally have to figure in sales tax and property tax and such (remember when we went to war over being double taxed? ah the days of Americans fighting for themselves)

[Broken Arrow]

Now see, I agree with Tree here. 250k per year isn't super rich, but one can certainly live comfortably enough.

250k effectively means about 60k to 70k or so in federal taxes, depending on filing. I'm going to pretend 70k.

I realize state tax varies, but in my state, that would be around 29k to 34k. I'm going to pretend 35k.

Property tax varies even more, but assuming a 500k house here (which is more house than most families will ever need in my area), property tax in my state would be about $3250. Let's just pretend it's 5k.

I realize this is a very basic view of things, but if you add it all up, you still have 140k per year to live on. If the standard of living is reasonable, surely one can manage. (edit: Ok, not sure about AMT though.)

But I also agree you wouldn't want to pop champaigns on your mega-yacht just yet with that income. That's why I originally recommended that Obama should tackle the highest tax bracket first.

[LivingAlmostLarge]

People who make $250k/year pay more than people who make $5m/year. Why? People who are in the top 1% can live off investments, ask Warren Buffet. A $250k is still paying income taxes. That means you are paying the 35% bracket. Live on your investments? Pull out $250k in dividents or interest or long term capital gains? Hmmm..only 15%.

I've said for a long time, Bush's tax cuts are for the rich. Most people don't make enough to live on dividends, interest, or capital gains to even make it worth paying 15%. Plus how many people have homes appreciate $250k? The average home is barely about $250k. Geez. Sure great tax cuts.

PP I think it depends on where you live. In CA the top earners pay a lot of state income taxes. Then combine that with federal tax bracket, it's closing in on 50% fast.

[My English Castle]

If not Rich with a capital R, certainly pretty darn well-off.
That's not to say they could afford everything etc, but with even hafway decent mgmt, they should be doing pretty well.

[kork13]

I'd have to agree. Even in a high COL area, a quarter million per year is a pretty healty sum. While I won't by any means say that it's a sure thing, I would venture a fair number of those who make that kind of money are probably pretty well off.

Yes, this makes the "radical" assumption that the person isn't desperately in debt, but I'm also willing to venture that one can't be completely irresponsible and still manage to hold a job with that kind of salary.

[disneysteve]

I don't know if it is rich or not but I'd be quite satisfied to be making 250K.