Remember, that's per spouse. So it's effectively (if all the
financial advertising has actually educated me any) $1.3M now, going
up to $2M early next century.
Do you have data for average house and retirement fund in CA? Best
I could come up with this evening was a June 1999 census report at
<http://www.census.gov/const/c25_curr.txt>, which gives a median
price of $157K for a single-family house, showing that one can't
extrapolate from OC or the Bay Area very well to the rest of the
country. No data on retirement funds; the wealth data from 1993
suggests that under 4% of households had a net worth in excess of
half a million. Pointers to more recent and more specific data
appreciated.
OK, here's a figure for CA. According to the news from April at
<http://realtimes.com/rtnews/rtcpages/19990428_cahomesales.htm>,
median SFR is $213K. Even after doubling that for non-primary
residence assets, you're a far cry from $1.3M.
Consumer Finances", Federal Reserve Bulletin, vol 83 (Jan 97)
pp. 1-24: <http://www.bog.frb.fed.us/pubs/bulletin/1997/0197lead.pdf>
Median Family Net Worth: 1995 ($, thousands)
---------------------------------------
all families . . . . . . 56.4
income >$100,000 . . . .485.9
age of head 65+. . . . ~100
Median Value of Retirement Accounts: 1995 ($, thousands) (% holding)
---------------------------------------------------------------
all families . . . . . . 15.6 . . . . . 43.0
income >$100,000 . . . . 85.0 . . . . . 84.6
age of head 65+. . . . . 30-
Median Value of Primary Residence: 1995 ($, thousands) (% owning)
--------------------------------------------------------------
all families . . . . . . 86.8 . . . . . 63.9
income >$100,000 . . . 217.0 . . . . . 90.5
age of head 65+. . . . .~70 . . . . .~78
> making every generation start from a fixed amount? Heck, the 16th
> amendment was a mistake that should be repealed. [1]
Can we please be clearer what we're discussing? There's already been
plenty of confusion of payroll taxes with income taxes, and now
you're dragging income taxation into the estate tax arena.
(Note that if you're in the position of being worried about estate
taxes, income taxes work to your benefit, as they shift any given
tax burden away from large concentrations of property, and towards a
motley collection of wage earners.)
In terms of providing opportunities for children: in my area of CA
(where one is unlikely to find condo conversions for under $200K),
$18K/yr after taxes could reasonably support the life of a surf bum;
maybe even a well-heeled surf bum. A capitalization of $300-450K
ought to suffice to throw that off, and I dare say that money could
go much further in Baja. How much does tuition run these days?
Surely $240K should suffice to get more (than enough?) education than
the average rabbit?
Then again, all it takes is a good round of inflation to wipe out
savings. At least with taxation, you're not only told the rules
beforehand but also stand a chance of benefit.
-Dave
I might argue that, in terms of utility to your offspring, the
legacies of genes, education, and a civil society go much further
to their benefit than that of property.