Join Early Retirement Today
Reply
 
Thread Tools Display Modes
How Much Do YOU Save?
Old 01-04-2006, 07:38 PM   #1
Recycles dryer sheets
 
Join Date: Dec 2005
Posts: 209
How Much Do YOU Save?

I just finished compling my end-of-year financial number. I found that in 2005, I saved 42% of my pre-tax income and 52% of my post-tax earned income. Add in unearned income (dividends, interest and capital gains), and I find that the numbers are 70% and 61%. The post-tax numbers are an estimate as I have not finalized my taxes for 2005.

I have the advantage of having a tight-wad working wife in a professional position and only one child, and live in one of the cheapest major metropolitian areas in the country.

Interestingly, this makes me want to spend a little more money, as I think that perhaps I am not spending enought of my income, given that we most likely will not retire until my childs enter college in 6.5 years.

So, for those of you in the accumulation phase, what do you save? Do you find your savings rate to be constant, declining or increasing with time? Mine has definitely increased with time, though I must admit solely as a result of an increasing income, not a decrease in spending.
bbuzzard is offline   Reply With Quote
Join the #1 Early Retirement and Financial Independence Forum Today - It's Totally Free!

Are you planning to be financially independent as early as possible so you can live life on your own terms? Discuss successful investing strategies, asset allocation models, tax strategies and other related topics in our online forum community. Our members range from young folks just starting their journey to financial independence, military retirees and even multimillionaires. No matter where you fit in you'll find that Early-Retirement.org is a great community to join. Best of all it's totally FREE!

You are currently viewing our boards as a guest so you have limited access to our community. Please take the time to register and you will gain a lot of great new features including; the ability to participate in discussions, network with our members, see fewer ads, upload photographs, create a retirement blog, send private messages and so much, much more!

Re: How Much Do YOU Save?
Old 01-04-2006, 08:06 PM   #2
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
 
Join Date: Jun 2005
Posts: 10,252
Re: How Much Do YOU Save?

We're in the accumulation phase. We saved 30% of pre-tax W2 income, paid 22% in income, FICA and medicare taxes and spent 48%. So we save 38% of post-tax W2 income. If we add in unearned income, then we saved 153% of our income.

Our savings rate is about the same over the last few years. Our absolute spending has gone up every year for awhile. I have a professional wife as well and 2 kids.
LOL! is offline   Reply With Quote
Re: How Much Do YOU Save?
Old 01-04-2006, 09:21 PM   #3
Thinks s/he gets paid by the post
thefed's Avatar
 
Join Date: Oct 2005
Posts: 2,203
Re: How Much Do YOU Save?

All I could afford to save was 10% in a combo of pre and after tax dollars. I'm 22, starting a new business, so $$ is tight.

But this year's budget allows for about 18%.
thefed is offline   Reply With Quote
Re: How Much Do YOU Save?
Old 01-04-2006, 09:52 PM   #4
Recycles dryer sheets
 
Join Date: Mar 2005
Posts: 75
Re: How Much Do YOU Save?

I'm in the " it's not what you save, .. it's what you don't spend " phase. FIREing in a few months . Before that savings were equal to about 30% of earnings.

Christopher
Chris24 is offline   Reply With Quote
Re: How Much Do YOU Save?
Old 01-05-2006, 06:59 AM   #5
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
 
Join Date: Jun 2005
Posts: 10,252
Re: How Much Do YOU Save?

Here's a comment on saving, SWR and unearned income. If your investments return 8% to 12% a year and the SWR is about 4%, then your "saving" from unearned income should be at least 2 to 3 times your annual expenses when you are getting close to early retirement.
LOL! is offline   Reply With Quote
Re: How Much Do YOU Save?
Old 01-05-2006, 08:36 AM   #6
Thinks s/he gets paid by the post
Jay_Gatsby's Avatar
 
Join Date: Oct 2004
Posts: 1,719
Re: How Much Do YOU Save?

Around 40% pre-tax and 60% post-tax + another 5-10% here or there in dividends, distribution, interest, etc...
__________________
He had one of those rare smiles with a quality of eternal reassurance in it . . . It faced, or seemed to face, the whole external world for an instant and then concentrated on you with an irresistible prejudice in your favor. -- The Great Gatsby, F. Scott Fitzgerald
Jay_Gatsby is offline   Reply With Quote
Re: How Much Do YOU Save?
Old 01-05-2006, 09:58 AM   #7
Moderator Emeritus
SteveR's Avatar
 
Join Date: Jul 2005
Posts: 2,811
Re: How Much Do YOU Save?

Here we go again.

The anal-retentive faction here should set some basic rules on what should be considered in Savings.

Since this board likes a lot of ground rules to these kinds of discussions...maybe we need some here too.

Savings=?

Are dividends and interest savings; or are they passive income?

Are gains on funds or equities income or savings?

It the dollar equivalent of a pension savings if you can't get to the whole amount to cash it in?

It the equity in your home savings if you still own the home or is it an unrealized gain?

Is an FSA account savings since you lose what you don't spend?

Are Social Security contributions savings?

Are life insurance proceeds savings?

Are other insurance payouts for loss savings?

Are any other items typically considered as passive income or capital gains savings?

My favorite...if you buy an item for less than the regular price, is the money you did not spend on the item due to the reduced price savings?

It is that any income or gain not spent would be considered savings?


Just felt like being a bit of a PITA this morning. I am sure it will pass. 8)
__________________
Work? I don't have time to work....I'm retired.
SteveR is offline   Reply With Quote
Re: How Much Do YOU Save?
Old 01-05-2006, 10:05 AM   #8
Thinks s/he gets paid by the post
retire@40's Avatar
 
Join Date: Feb 2004
Posts: 2,670
Re: How Much Do YOU Save?

Quote:
Originally Posted by SteveR

Are Social Security contributions savings?*
Payments you make to Social Security are a tax and therefore an expense, not savings.

I'm too lazy to get into each one, so I'll just pick this one. I guess if each person pick one item, they will all get answered eventually.
__________________
No man is free who is not master of himself. --- Epictetus
Enjoy Yourself (It's Later Than You Think). --- Guy Lombardo
retire@40 is offline   Reply With Quote
Re: How Much Do YOU Save?
Old 01-05-2006, 10:11 AM   #9
Moderator Emeritus
SteveR's Avatar
 
Join Date: Jul 2005
Posts: 2,811
Re: How Much Do YOU Save?

Quote:
Originally Posted by retire@40
Payments you make to Social Security are a tax and therefore an expense, not savings.

I'm too lazy to get into each one, so I'll just pick this one.* I guess if each person pick one item, they will all get answered eventually.
If you live to collect on SS does it then become savings instead of a tax?
__________________
Work? I don't have time to work....I'm retired.
SteveR is offline   Reply With Quote
Re: How Much Do YOU Save?
Old 01-05-2006, 10:13 AM   #10
Give me a museum and I'll fill it. (Picasso) Give me a forum ...
REWahoo's Avatar
 
Join Date: Jun 2002
Location: Texas: No Country for Old Men
Posts: 50,000
Re: How Much Do YOU Save?

Quote:
Originally Posted by SteveR
If you live to collect on SS does it then become savings instead of a tax?
I think it will just be income unless you save some of it.

__________________
Numbers is hard
REWahoo is offline   Reply With Quote
Re: How Much Do YOU Save?
Old 01-05-2006, 11:12 AM   #11
Thinks s/he gets paid by the post
retire@40's Avatar
 
Join Date: Feb 2004
Posts: 2,670
Re: How Much Do YOU Save?

Quote:
Originally Posted by REWahoo!
I think it will just be income unless you save some of it.
You took the words right out of my mouth.
__________________
No man is free who is not master of himself. --- Epictetus
Enjoy Yourself (It's Later Than You Think). --- Guy Lombardo
retire@40 is offline   Reply With Quote
Re: How Much Do YOU Save?
Old 01-05-2006, 03:56 PM   #12
Thinks s/he gets paid by the post
MooreBonds's Avatar
 
Join Date: Aug 2004
Location: St. Louis
Posts: 2,179
Re: How Much Do YOU Save?

100.0% Gross Wage Income (ignoring investment income)
33.9% Medicare/SS/Federal/State Taxes
8.5% Expenditures
57.6% Net Additions to investments

Disclaimer: Still making use of my parents house as my living quarters, since they're away 8 months/year (and I'd have to look after the place/pick them up anyway). The good news is that I'm getting ever-so-closer to FIRE status, and I'm working on a relationship with a special someone that seems to have almost the same fiscal habits that I do (along with all of those other oh-so-important non-financial qualities ).
__________________
Dryer sheets Schmyer sheets
MooreBonds is offline   Reply With Quote
Re: How Much Do YOU Save?
Old 01-05-2006, 04:13 PM   #13
Thinks s/he gets paid by the post
tryan's Avatar
 
Join Date: Mar 2005
Posts: 2,592
Re: How Much Do YOU Save?

Pre-FIRE savings was maxing out the 401k (13%) and and additional 10% in an employee stock plan. 23% total.

Not counting real estate investments/donations to keep the business running. What's noteworthy is that the real estate appreciation exceeded my annual pre-tax working income for the last 5 working years. Could not have FIRE'd without that bump.
__________________
FIRE'd since 2005
tryan is offline   Reply With Quote
Re: How Much Do YOU Save?
Old 01-05-2006, 04:19 PM   #14
Moderator Emeritus
laurence's Avatar
 
Join Date: Feb 2005
Location: San Diego
Posts: 5,267
Re: How Much Do YOU Save?

About 25% last year, about 10% projected this year - life happens . But I did pay down home debt by about 10% over the last 12 months.
laurence is offline   Reply With Quote
Re: How Much Do YOU Save?
Old 01-05-2006, 05:40 PM   #15
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
Gone4Good's Avatar
 
Join Date: Sep 2005
Posts: 5,381
Re: How Much Do YOU Save?

45% of gross income (excluding investment gains) 70% of after tax income (excluding investment gains). Incidentally, if I paid no taxes my savings would be 80% higher.
__________________
Retired early, traveling perpetually.
Gone4Good is offline   Reply With Quote
Re: How Much Do YOU Save?
Old 01-06-2006, 12:53 PM   #16
Recycles dryer sheets
 
Join Date: Dec 2005
Posts: 209
Re: How Much Do YOU Save?

^&%*, I am not doing as good as I thought. I guess I am going to have to go back and tighten the budget. Maybe I am too competitive !

I liked my wife's observation after I presented my analysis results: "I am happy with how much we are saving, but it scares me how much we are spending!" I have to agree. Where the heck does the money go? We drive old cars, live in a cheap house, don't eat out much, and the money still flies away.
bbuzzard is offline   Reply With Quote
Re: How Much Do YOU Save?
Old 01-06-2006, 04:15 PM   #17
Recycles dryer sheets
 
Join Date: Dec 2005
Posts: 186
Re: How Much Do YOU Save?

guessing about 40%!

__________________
We should all feel blessed!
wstu32 is offline   Reply With Quote
Re: How Much Do YOU Save?
Old 01-06-2006, 04:18 PM   #18
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
 
Join Date: May 2005
Location: Lawn chair in Texas
Posts: 14,183
Re: How Much Do YOU Save?

~20%
__________________
Have Funds, Will Retire

...not doing anything of true substance...
HFWR is offline   Reply With Quote
Reply


Currently Active Users Viewing This Thread: 1 (0 members and 1 guests)
 
Thread Tools
Display Modes

Posting Rules
You may not post new threads
You may not post replies
You may not post attachments
You may not edit your posts

BB code is On
Smilies are On
[IMG] code is On
HTML code is Off
Trackbacks are Off
Pingbacks are Off
Refbacks are Off


Similar Threads
Thread Thread Starter Forum Replies Last Post
Did you continue to save in retirement? JustCurious FIRE and Money 17 04-17-2007 08:18 AM
I hate to say this but most will not save enough. dumpster56 FIRE and Money 113 01-06-2007 07:44 AM
$300/mo car loan to save $100/mo gas? green1 Young Dreamers 16 06-20-2006 10:48 AM
How much do you save??? MedicalDoc FIRE and Money 13 03-20-2006 12:40 PM
Another article on our inability to save REWahoo Other topics 49 03-10-2006 09:59 AM

» Quick Links

 
All times are GMT -6. The time now is 08:15 PM.
 
Powered by vBulletin® Version 3.8.8 Beta 1
Copyright ©2000 - 2024, vBulletin Solutions, Inc.