what % of salary do you live on

[cute fuzzy bunny]

Sounds about right. The 80% number simply says you take your costs and sub off the stuff that you spent while working, as mentioned above.

Some people might become heavy travellers and jump to 150-200% while doing that.

Some might start doing their own housekeeping and lawn work, maybe even home and car repairs, and drop to 50%.

Some might start doing their own cooking at home, dump some of the expensive tastes, find inexpensive hobbies, and drop even more.

An interesting tidbit I read recently is that a lot of potential ER's make up a dream list of what their retired life will be like; all the stuff they imagine they'll be doing instead of work. Unfortunately most people are undisciplined and when work structures are removed, they become even more so. A good way to resolve this is to prepare short, intermediate and long term goals and "things to do".

Unfortunately that will end up increasing your spending a little bit, but if you do a lot of the stuff with your own time, you get good bang for your buck.

 

[Helen]

We are saving 42% of our gross. I can't remember what percentage we are living on. I have a spreadsheet that I use as a roadmap to our retirement. I follow that so I don't really pay attention to what I spend. If the savings or checking account gets low I cut back my spending.

We will live on more in retirement than we are currently living on.

-helen

 

[Retire Soon]

We're currently living on about 52% of our gross salaries. Our total expenses will decrease a lot when we retire.

 

[kat]

Hmm.... I'm living on nearly all of it, as I work very part time hours and hopefully watch the port do a wee more growing , or at least not draw from it if it doesn't grow.

 

[yakers]

This is a pretty terrific self selecting group of responsible, thoughtful people

Only one person said they want 100% income replacement when they retire! My Dad was only a truck driver on a modest income who is dead now but when he retired 20 years ago he had 100% income replacement from SS, union retirement, company retirement, profit sharing, and IRAs. I don't think a lot of working folks will have that kind of deal in the future.

Also I wonder if statistics for the average US household will indicate most people will need/expect 100%+ when they retire to keep up their unsustainable life styles and provide the "extras" they anticipated they would do/ have when they retire.

 

[Sheryl]

We are saving 42% of our gross.  I can't remember what percentage we are living on.  I have a spreadsheet that I use as a roadmap to our retirement.  I follow that so I don't really pay attention to what I spend.  If the savings or checking account gets low I cut back my spending.

We will live on more in retirement than we are currently living on.

-helen

OK, Helen, I may be and idiot, but if we're talking gross income, and you're saving 42%, are you not living on 58%?  Or is there some place in between that is neither saving or spending? 

Seriously I'm not trying to be a smarta$$.  Just wondered what I was missing.   

I do the same thing as far as, if the checkbook gets low I stop spending.  But usually it gets high ( :) so I move some to an investment account. 

I passed 43% of my gross thru the checkbook last year (not including investments), and gave 25% of it to IRS, SS and Medicare, so I must have saved 32%.

 

[tryan]

We lived on 42% of our gross where the rest went to : feds (28%); state taxes (5%) and savings (25%).

 

[PJ03]

Excluding taxes I live on about 35% of gross. my thinking is that I can reduce that even more by moving once I retire.

 

[accountingsucks]

Pre or after tax?


If we are taking pre tax income then it is about 35%
After tax it is 46%

 

[Helen]

OK, Helen, I may be and idiot, but if we're talking gross income, and you're saving 42%, are you not living on 58%?  Or is there some place in between that is neither saving or spending? 

You are right. When I was running my numbers I excluded things like taxes and mortgage payments to see how much I was living on. My logic was the mortgage would be gone in retirement and my tax rate would be lower.

So, I basically broke it down to savings, taxes, mortgage and living expenses. But, that wasn't what the OP was asking.

-helen

 

[Sheryl]

So, I basically broke it down to savings, taxes, mortgage and living expenses.  But, that wasn't what the OP was asking.

-helen

Ah. That makes sense. The taxes thing always causes an uproar between the people who say, "How can you not include taxes when you are spending that money," and the people who really just want to know living expenses, and know that taxes will change when retired.... But I understand what you are saying. Didn't mean to be obnoxious.

 

[Rustic23]

After reading these post one might conclud that what percentage of your income you live on may depend on how much you make. Bill Gates may live on less than 10% of his income, while the guy that mows lawns lives on 100%. I wonder where it begins to break?