Work a Job? This is how much time you lose from your life based on your salary
Written By: Nick Nguyen | Read full profile
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Okay, if you haven’t checked out my post on How having a 6-figure salary doesn’t stop you from being poor, take a step back and check it out here.
Now I chose the most basic 6-figure salary because let’s face it, making around 100-150k a year in your lifetime is definitely attainable for MOST people if you follow that straight path of go to school, get a job, and retire. You might have to go to school a few different times and get a masters or a PhD to get there, but it’s attainable for most people barring any undue hardships and circumstances out of their control.
(Sure, others will make the argument that not everyone will be able to get an education or even get to a bachelor’s degree, to which I completely agree and encourage you to comment either down below or via email through our Contact Us page for this post so that we can discuss ways to change that for everyone! For example, in recent years, there are plenty of trade school careers and bootcamps that have come to existence that will allow you to break into that 6-figure bracket.)
But please keep in mind that all the calculations up until this point have been very basic. They were done using very simplistic assumptions that (1) your income would not increase over time and (2) we are not factoring in opportunity costs from investing your money and making it work for you.
Maybe one day we’ll get into the nitty gritty calculations and some quick napkin math to take them into account, but for now, check out the following table to see how much of your time is given to the government through taxes, assuming you live in a state that has no state income tax like Texas, Washington, Florida, Alaska, Nevada, South Dakota, Wyoming, Tennessee, and New Hampshire (again things get more complicated even within each individual state, but with time we’ll get into it and find ways to make this seemingly mind-boggling financial junk palatable).
(You see that dip at around $150,000? When you live in a state that doesn’t have a state income tax this happens because of a change in the income tax brackets. So maybe aimimg for $150,000 and staying there is the way to go…? )
Now let’s say you live in one of the more popular states like Massachusetts, California, New York, or Oregon. Look at how many years you’re giving up to taxes now.
Isn’t this insane? You’re paying more than double in time once you hit age 65!
Again there are still a myriad of factors that come into play like adjusting your salary for cost of living, but let’s be real - that adjustment is never enough to keep up with forever increasing prices of essentials like toilet paper, dog food, and rice (if this is the future and you don’t get it, google ‘2020 toilet paper shortage’). Nevertheless with this in mind, it should get the point across that no matter how much your salary is, if you work any job, you’re giving up your time for money.
So how do you get around it?
Find *legal ways to make your money work for you so you can sit back and enjoy the ride!
One way is by opening up an IRA, which I talk more about in my 3-part blog series that dives into the differences between a Traditional IRA vs Roth IRA. So if you want to start shielding your hard earned cash from taxes, check out my other blog posts to get a better understanding to see which of the IRAs will best suit you and your needs.
*Nguyening Lifestyles is not a registered financial service provider and does not give financial advice. All information in these posts are for entertainment purposes only. Nguyening Lifestyles is not liable for any actions or outcomes that transpired after your reading of the following post.
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