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Old 05-12-2013, 08:42 AM   #21
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Originally Posted by halv45 View Post
I hear people say you should ave 10% or 15% or whatever.

Do you consider your company match as a % of how much you save?

Say you put away 5% and you company matches 5%. Do you consider that "saving" 10%?

Nope, the company match is gravy. I like gravy.

And definitely if you do count it - then make sure you are fully vested and beyond. I had one company that changed their fully vested time line and grand fathered every one over the last five years - I was within that five years and missed being fully vested by 3 months... They changed it from five to ten years - I did not make it to ten years...
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Old 05-12-2013, 08:50 AM   #22
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Had a 6% company match. Never really considered percentage of salary that I saved to be important. Saving as much as possible regardless of the percentage was paramount. I did count the match as part of my yearly gain once it vested.
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Old 05-12-2013, 10:36 AM   #23
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I never counted it because at my company it's too variable. Originally it was 6%, then it dropped to 4%, then no match for a few years, then it came back at 2%, and now the match is quarterly based on the company's quarterly financial results (which was 0% last quarter ).

I just made sure I was contributing the full pre-tax amount, which ensured I would also get any match. As a proponent of LBYM I saved as much as possible. I never calculated my exact savings rate, but it's been somewhere in the 30% to 40% range for a very long time (no kids).
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Old 05-12-2013, 10:46 AM   #24
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if your getting 5 percent free money it sure is part of your savings. it does not mean you should not be putting in the max
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Old 05-12-2013, 10:58 AM   #25
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Similar to Cranberryjoe, I never counted it in my percent saved because it was too variable, too muddy to figure into the calculation. I also wanted to review my percent saved as that of my salary+investment income outside of my retirement accounts.

For my first few years of working, the company matched at 50% of the first 6% of pay into the 401k. But just around the time I became vested, they raised it to 75% of the first 6% of pay.

A few years later, my company began its ESOP plan which was a blob of company stock based on a percent of your pay. That percent varied a lot from year to year and was held in a separate account from the 401k. The vesting rules were slightly different, too.

A few years later, the company merged its ESOP and 401k plans (and streamlined the vesting rules) and allowed us to divest a portion of the ESOP and put its proceeds into the 401k.

So, if I included the match and the ESOP, both "free" money, it would make my savings rate pretty complicated. Therefore, I never included either one in my personal savings rate. As for calculating a rate of return in my 401k and ESOP, I usually looked at only the one excluding the company match. However, I also kept track of the 401k with the company match to get an overall rate of return. I also looked at an overall rate of return without the company match but with the ESOP to see how each investment was doing.
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Old 05-12-2013, 11:12 AM   #26
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If your goal is to track your savings rate and improve on it from year to year, I would just totally ignore the company match. It's not something that you have control over nor is it money that you could potentially spend -- it will just throw noise into your year to year comparisons.
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Old 05-12-2013, 11:27 AM   #27
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I didn't consider the match as part of my savings rate. Like semiretired2008, I considered it to be gravy (and part of my overall comp).
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Old 05-12-2013, 12:02 PM   #28
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Good question, I get a 5% TSP match, but I haven't been including it in the % of gross saved, it is later included as part of my spreadsheet for determining "the number." It wouldn't make much of a difference, in my case it would bump up my gross saved by about 3%, from 63% to 66%.
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Old 05-12-2013, 12:14 PM   #29
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I would not factor in the company match to my long term retirement savings plans.

I know of one megacorp that persuaded employees to move from DB to DC by offering a 12 percent DC contribution match.

That match was then reduced over time to 7 percent, then to 5 percent.

It then went to 5 percent annualized rate, paid quarterly ONLY if the company met quarterly targets. That was the situation when I left just over 2 years ago. I opted to remain in the DB plan.
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Old 05-12-2013, 02:52 PM   #30
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When I worked at mega, I had a match and a DC plan that put in 6% or 8% (can't remember now)....


I did not count any of mega's money as part of my savings percentage.... yes, I did put it in my calculations of how much I had and my projections...

Now, mega spit me out... work for a small firm that does a smaller match... also got married.... my projections have taken a big hit with both...
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Old 05-12-2013, 03:43 PM   #31
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I never paid much attention to the TSP match, except to spread out my own contributions so that I wouldn't lose any matching contributions.

To be honest, I always contributed the absolute maximum to the TSP (including over-50 catchup when applicable) and not one penny less. So, it wasn't a matter of "counting" anything.

I am so glad that I contributed up to the legal limit, and just wish I could have contributed more. Oh well!

After doing that I would save as much taxable money as possible. This went to paying off my house early, and then to Vanguard. My goal was always to see by how far I could exceed my prior savings. So, it was a moving target.
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Old 05-12-2013, 07:50 PM   #32
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I do not include it in our calculation.
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Old 05-13-2013, 08:39 AM   #33
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In my case, my private employer matches 100% of the first 6% I save (vested immediately). DW's public school system doesn't match. So combined with my 10% annual contribution, I do consider that "I'm" saving 16%/yr. Combined with DW's 10%, "we're" saving about 13.5%/yr.

We've never contributed the max amounts though, as each family's situations and priorities can be different. In our case, with both of us having [non-COLA'ed] pensions available in our mid-late 50s, and the combined amounts (~$100k) will likely cover our retirement living expenses (along with continued employer access to health benefits), we opted to pay off our mortgage before we turned 50, as well as fully fund both of our children's college educations (including living at college). We managed to do this while also saving 10% of our combined salaries over nearly the past 25 years (currently ~$650k). So while we don't save nearly the large amounts I read so much about, within the context of our other financial goals and means, we've balanced things out in a way that we're comfortable and confident in our ability to ER, while still providing a nice debt-free headstart and LBYM example to our children.
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Old 05-13-2013, 11:54 AM   #34
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Company match (fully vested, a little over 10% of my income) is a big portion of my retirement savings. If I leave it out of calculations based on savings rate, those calculations significantly overestimate how long it is until I reach FI.

I'm in the camp that doesn't focus on savings rate. Instead I focus on what my retirement spending might be like, and try to project (FireCALC/et al) how long I'll have to work/save to accumulate more than enough nest egg to last my lifetime.

I recall a related question that came up a while ago: do I count income I use to pay down my mortgage as part of my savings rate? I'm not sure if there's a right answer to that, but when I include my own savings + company match + mortgage paydown, my savings rate looks pretty impressive (to me, anyway).
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Old 05-13-2013, 01:26 PM   #35
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Yes I include it in my calculations, I don't see how one could acurately come up with a long term savings budget if that amount wasn't both in the salary and the savings percentage. It is just money coming to me from my employer. I certainly do not want to miss any of that!
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Old 05-13-2013, 02:23 PM   #36
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Yes I include it in my calculations, I don't see how one could acurately come up with a long term savings budget if that amount wasn't both in the salary and the savings percentage. It is just money coming to me from my employer. I certainly do not want to miss any of that!

I think some people are getting some of this confused.... which is easy to do...

I think the OP question was if you include it in your savings rate... ie, when someone asks you 'what % of your salary do you save?'.... I really don't care what my % is.... so I do not include it... (and now it is not that much anyhow)....


But, the other question that some seem to be answering is 'how much do you need in order to retire? Do you include company match in this number?'..... I think it is not smart to NOT include all investments in your calculation... but does it really matter where it comes from This also includes all forms of investments when you calculate a future balance... again, not smart to exclude company matching or a DC plan in your balance... as mentioned, it can grow to a big number over the years...


My answer to the first one is 'no', which is what I think the OP asked... my answer to the second is 'yes'.... or course I include it.... doesn't everybody
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Old 05-13-2013, 02:34 PM   #37
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Like several others here - I don't include it in my savings rate because it's not ME that has control over it. I do consider contributions already in my account (we vest immediately) in my net worth/nest egg considerations.

And like a Bird in Hand - I consider my extra principal payments on my mortgage as savings as well. That's money that is going directly to increasing my net worth.

The combination of maxed out savings, maxed out debt reduction means we live on a lot less than most of my peers... And it's the spending/expenses that really determine the amount you need to retire early. If close to 50% of our income is going to 401k and extra principal payments... that means I only need 50% of our income in retirement. (with adjustments for tax changes and medical insurance pre-65). So saving/debt reducing works wonders towards getting me to the ER goal.
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Old 05-13-2013, 02:39 PM   #38
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Now that I think about it some more, I think I focused more on savings rate when I was younger since the balances themselves weren't that impressive. The rate of savings was an affirmation that I was pointed in the right direction.

Since then I have gotten married and started a family. The savings rate has dropped quite a bit (the savings amounts have risen), so now I look more at the overall picture. Especially since in good years market returns compete with savings for the glory to the cause.

I see what I want to see. . . .
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Old 05-13-2013, 07:55 PM   #39
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Yes, I include it.
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Old 05-14-2013, 08:46 AM   #40
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Well, it is my money after they give it to me...

I never used it the way the OP suggested. Only thought about it in the context of at least saving enough to get the full match. Otherwise, I saved as much as I could, which changed occasionally based on other circumstances.
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