Monday, October 21, 2013

Is 94K A Lot?

I was talking to my brother today and we happened to talk about Obamacare. He and his wife are self-employed and he mentioned that he was hoping it would help drive down his health insurance premium. They now pay around $700 monthly with a $4000 family deductible. This is for coverage for a family of 4 (likely without maternity coverage but I didn't ask to make sure).

I also brought up that the tax subsidies go away at $94,000 and how that's not that much money. For a family of 4, that amount of money goes very quickly. My brother agreed with me. I don't know how much they make but its likely quite a bit more.

My brother drives truck but doesn't own the truck. He works in Western ND in the oil fields. He didn't graduate high school but works very hard and likes to make money. He will easily work 100 hours a week if given the chance. He is easily making 6 figures after accounting for the added expense of having a separate apartment out there. My sister-in-law owns her own daycare but doesn't work out of her own home. She works from 6:45 to 5:30 M-F. She works long hours but their two kids are with her after school. She has a high school diploma. She wasn't that ambitious when they got married but my brother definitely had a hand in her buying a separate house to do daycare in. Her daycare has been open for over 10 years and has a waiting list.

I use my brother and SIL as examples of what hard work can lead to. They don't have high education levels but are smart about making money and making it work for them. Where they live, they could probably live comfortably but modestly on 94k.

Tell me what you think. Is 94k a lot of money? To support a family? Is that a low amount to have the tax subsidy phased out for Obamacare? 

20 comments:

  1. That is way more money than I have ever made. I could live very well on that. We have never made more than 56,000 and have put kids through school but we do have a lot of debt. I love to hear about people who have good jobs and lives who do not have high educations. hard work pays off every time. You must come from a very hard working family. Baby?

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    1. I'm not due for 3.5 weeks and I expect to go up to my due date so no baby yet. My brother does tend to be a bit of a workaholic. There's no way I could work those hours and he has done it for years. I think if you added in your DH's benefit package, it would really increase your income. I don't think you need to have an education to make good money.

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  2. We make about that between 3 jobs, and at least in CT....no, it isn't alot. Not when add in the high cost of living. Our state collects state, local, and fire taxes, along with personal property taxes. Add in the price of gas, groceries.....and it widdles away.

    I don't necessarily think that people making over 94k should be eligible for subsidies....but 94k doesn't go as far as people think.

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    1. I don't disagree with you about tax subsidies for over 94k. I used to think that one would be rich making that much money bit it doesn't seem like that anymore. I used to think that making 36k a year would make me rich. That is $3000 per month!

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  3. Where we live that is a lot of money. We make less and live very comfortably for a family of 4. But I could see how that wouldn't be a lot where cost of living is higher.

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    1. I think a large part is the cost of living. My sister lives in Manhattan and everything is so expensive. Groceries are easily twice as expensive.

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  4. Where I live, $94,000 could support a family of four. Everything they need, most of what they want. BUT, they would still have to live somewhat frugally to save for retirement.

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    1. It is interesting how retirement cuts into cash flow so much.

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  5. I'd say that 94K is alot generally. It's ALOT more than we make (for the 3 of us). But cost of living is HUGE. Like in California, Chicago, New York, ect; 94K is certainly not a lot of money. It's funny how that is. We compare tend to compare incomes without ever factoring in stuff like state and city taxes; cost of living. These things make a huge difference in how much money you have left at the end of the day.

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    1. Housing plays a huge overall role in the cost of living and how far money goes.

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  6. I think it depends on location, tax efficiency, lifestyle, and workplace benefits (if any,) but generally speaking $94K is sufficient for a family of 4. According to the US Census Bureau the median household income in the US is about $53K, and there are 2.6 persons per household. If we cross multiply the data, then the typical family of 4 should be able to live a median lifestyle with $82K. So with $94K they can even save at least a thousand dollars a month for the future :D But stats are stats. The real answer is much more complicated and personal to each family.

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    1. I think workplace benefits are huge in regard to how far your paycheck goes.

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  7. I am always amazed at what people feel is middle or upper class according to income. I would have said that is definitely upper class but according to others that is middle class needing subsidies. DH and I make maybe $50,000 in a good year and feel we are definitely middle class but have never ever taken gov't subsidies. We raised 3 children who all went to college, (engineer, RN and a doctor). We never felt like we were poor and always lived well below our income and never expected others to help us out.

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    1. I certainly don't expect subsidies on any level. We've always had health insurance even when it put a crimp in what we could spend on other things. My brother has always had health insurance for his family without any subsidies. Our incentive to have health insurance is to protect against medical catastrophes. The reason this came up is that it has been all over the news that those who make under 94k will have tax subsidies.

      I would be willing to bet that if you have three kids, you took the most common tax subsidy, the dependent subsidy. The government pays us to have kids. I think this subsidy will be about the same.

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  8. That is a good question. Where I live that is not a lot of money. With my job, my bonus and my side job, I make close to that. But apparently, we also have to add in DD's part time income for the subsidy calculation. When I plugged in the numbers to see if we qualified for any subsidy, based on a family of 4, it said we did for about 70/mo. But when I put in that only 3 of the family members need coverage through the exchange (I have coverage thru my job), it then showed no subsidy - even though I had said 4 were in the family. I'm curious - what has your brother found out about his rates? Did his current $700 a month increase? (since he's 6 figures, he probably doesn't qualify for a subsidy). I am hearing that most who don't qualify for the subsidy are finding increased rates from what they have been paying. The rate I was paying for my 3 family members increased 224%!!! Incredible and so maddening. While I don't expect to get a subsidy at my income level, I would at least expect to have my rates remain in a level price. Obamacare just infuriates me.

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    1. He's actually been working too much to check it out. He knew he wouldn't get a subsidy and wasn't expecting it. I'm kind of surprised that you need to add in your daughter's income.

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    2. apparently, from the way I was reading it (I haven't actually applied for new insurance yet) you had to included all household income. Everyone in the household who files a tax return

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  9. To me, $94K is 2 yrs of my husbands salary to support a family of 6, so yes, a LOT of money. lol! But they work hard for it, so that's wonderful! My husbands busts his @ss for the $$ he makes as well, just doesn't earn nearly that much. But I budget carefully and am grateful that he has a steady job that provides for our needs.

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  10. Very interesting post. I make exactly that amount of money as a teacher but live on only half of it, saving the rest for retirement. But I didn't always live on this amount of money, only the past couple of years. Teachers move up a grid - I started out earning less than a third of this amount. So as a single parent I had to live VERY frugally and didn't save anything for retirement for quite a few years.
    here in Canada I pay very little for health care but our taxes are among the highest in the world!

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  11. I just heard on the news that it's 94,000 for an UNMARRIED couple living together. If you're married the subsidies stop at $62,000. This is like the 700th time that I have to say that it would be so much better if my husband and I got a divorce and just lived together. Guess what, if we did that (like a A TON of people I know) then we could get free child care, free food, free health care for me and my son, and for crying out loud free college. This country is SO screwed up! News flash kids: just don't ever get married, stay under a certain income and live off the government. No wonder we're living with an entitlement mentality in this country. GAH!

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