What percentage of your salary are you saving towards retirement?

[tmm99]

Calculated this year by year for the last 22 years of w*rk, which is all the years I had a PC. Funded the IRA and 401k to the limits, put the excess into a taxable account. Retired in late '08.

YEAR % Gross % Net
2008 33 44
2007 33 44
2006 30 40
2005 20 27
2004 29 40
2003 22 34
2002 Lived off savings while unemployed for 8 months
2001 22 32
2000 22 33
1999 32 48

DontMeanAThing,

How did you calculate the saving% of Net with 401K contribution?

Thanks.

 

[tmm99]

Including 401K contribution, 32% of gross the last few years. Aiming for only 30% of gross this year (I got the bugs to spend! I might indulge even more, but I will see...)

 

[Webzter]

Last year, -3% of net.

This year, 0% to-date but we'll see what the second half of the year looks like!

Previous years, 40% of gross (no rental income, not including employer matches)

 

[sailor]

We crossed the negative line last month when we bought the new home.
Right now I'm bleeding at about 4% annual gross income.
It's an interesting exercise to see our saving rate dropping from roughly 45% to the negative territory (DINK->DI1K->SI2K->SI3K-> new house)
I hope to be back in black after the old house sells (hopefully soon) and 3 kids start transitioning from private to public schools.

 

[W2R]

Now that I am retired, I am saving 51% of my income. I am trying to spend more and save less so this will decline. You can't take it with you, as the saying goes.

When I was working, I saved more than that, because I was in an unusual situation (recovering from starting over with negative net worth at age 50).

I would suggest contributing the maximum to one's 401K and then also saving 1/3 of take-home pay. I think this is probably plenty for most people to save and still manage to retire early.

 

[studbucket]

Right now we're in paying-off-debt mode, so the number's ~10%. In 8 months, after the pay raise and the debt payoff, the number will jump up to 30-40% of gross income. That's what I'm really excited for

 

[Calgary_Girl]

Even though I've become a SAHM and we are living off of one income, we are still socking away approx. 36% of DH's gross salary. If I was still working, it would be closer to 50%. C'est la vie.....

 

[tmm99]

Now that I am retired, I am saving 51% of my income.

Wow. So your income consists of pension, SS, dividends and such?

 

[Webzter]

Wow. So your income consists of pension, SS, dividends and such?

Moderators and administrators of the ER forum also get a very generous per diem allowance of all the spam they can read! It can be lucrative to resell if you can find a willing buyer on ebay.

 

[REWahoo]

Moderators and administrators of the ER forum also get a very generous per diem allowance of all the spam they can read! It can be lucrative to resell if you can find a willing buyer on ebay.

Yep. The mods run a lot of online ads to try to move product. We're all very familiar with their [-]pitchpig[/-] spokesperson:

 

[FinanceDude]

45% of gross. Basically living off one income...........

 

[Raymond]

Annual salary 90K gross, Annual locked in saving amount 42K. Another 5-10K depending on vacations and travel. Single of course, no bills at all. 52 and counting the days to ER. Actually it will be exactly 1376 days.

 

[DFA]

About 33% of after tax monies.

 

[Lisa99]

About 65% of gross. Live off one income but both work and we save the higher income.

 

[Khan]

Last ~4 years of employment: greater than 50%

First ~5 years of retirement: ~10%

Recently: negative; what should I be saving it for?

 

[W2R]

Wow. So your income consists of pension, SS, dividends and such?

Yes, regular retirement stuff although I haven't claimed SS yet. I am not w*rking either for myself or for anybody else.

 

[Beryl]

Only about 20% when working but I bought/sold a few homes which resulted in a nice boost when I sold my last one. I'm saving zero now. That many change once SS kicks in.

 

[mb]

Our entertainment expenses consisted mostly of going to the park or the beach.

Yes, but most of the rest of us think that going to the beach in your neighborhood is a pretty nice vacation!

 

[Sam]

Yes, but most of the rest of us think that going to the beach in your neighborhood is a pretty nice vacation!

I can vouch for that. Oahu's beaches are the best! And the water is crystal clear, the water temperature is perfect. So is the air temperature. The air humidity level is ideal. And there are so many beaches. And don't forget the surfs!

If I can find a desperate home seller, I would not mind learning home improvement the hard way at all.

 

[ItDontMeanAThing]

DontMeanAThing,

How did you calculate the saving% of Net with 401K contribution?

Thanks.

Net = Gross (containing Salary + Misc) - Taxes (containing Fed withhold, FICA, State withhold, State disability)

IRA and 401 were part of my Fixed Expenses, the category that also contained designated savings, e.g. Car Fund.

Undesignated Savings = Net - Fixed Expenses - Variable Expenses. This went to my taxable investment account.

Pct Gross saved = undesignated savings / gross
Pct Net saved = undesignated savings / net

My total savings was the designated plus undesignated savings, but I never looked at it that way. Designated savings was an expense because I thought of it as paying now for an almost certain future bill. The undesignated savings was my LBYM result.

I hope that answered your question.

 

[ChadR]

Some funny math going on in this thread lol

Seems the most useful way to compare savings rates is take total inflows less total outflows and that is what you are saving. Of course that is total saving and not just retirement saving.

In the interest of not manipulating the numbers to feel good I would argue that any employer contributions are inflows, not just savings. So you need to add them to your numerator and denominator when calculating a saving percentage.

Ok here comes lots of data points. Sorry I've been a quicken user since I was 18 y/o. (34 now)

For me. My current calculated "retirement" savings are about 17% of my gross income. I just changed jobs and if I somehow managed to vest in the separate DC plan my employer has (6 year vesting and I want to relocate before then :/) then my retirement savings rate would be currently 26%. These percentages are me calculating things out back of the napkin type of thing (haven't updated all of my quicken accounts since 12/31/10).

I also try to save quite a bit of non "retirement" savings in an effort to live below my means.

Ok time for some fun Quicken stats. I have a customized report to compare my savings per year against my TRUE gross income. Income includes gross salary, bonuses, employer contributions, dividend income, interest income, gift income, etc. it's all in there.

2010 was a funky year with a job change combined with a self chosen sabbatical. My overall savings rate was 38% of gross income with an effective tax rate of 19%

2009 my most recent full year of employment my savings rate was 34% with an effective tax rate of 28%.

6 year period of 2005-2010 my savings rate was 41% and an effective tax rate of 26%.

Sadly, 2005 was the first full year I figured out that I should start recording everything gross in quicken. For the 10 years or so before that I recorded everything net.

However, running my report for the period of time from 18 years old until 33 years old my savings rate comes out as 39%. It would obviously be quite a bit lower if I recorded my pay checks gross from 1996-2004, though the paychecks before 2001 were not all that significant

Anyhow its fun to analyze this stuff.

 

[Nords]

Yes, but most of the rest of us think that going to the beach in your neighborhood is a pretty nice vacation!

And yet people think Hawaii has a high cost of living... it depends on the lifestyle.

 

[knucklehead 61]

i'll be adding approx. $47k into my 401k & another $50k to $60k into my taxable funds this year.
i want to sell our house & move into one of our rentals, if that happens then the taxable account will get an extra 300k to 400k boost! we will be damn close to fire then!

 

[chinaco]

45% of gross. Basically living off one income...........

I think one of the big economic changes in America has been the dual income phenomenon. It has increased productivity, GDP, and family wealth (or at least income). ... more people earn, produce... increases consumption... and for some of us savings!


It could be that we are enjoying a period where that excess earning power (excess money for discretionary spending and wasteful spending) may be over. I could be that more and more that extra money will have to be spent on real necessities instead of contrived necessities.

One area that seems to be completely out of control is funding college. It seems every kid goes to an out of state school or private school, lives in the dorm then and apt, high tuition, funded by mom and dad with entertainment funding accrued in student loans.

We may see a resurgence of living at home and attending the local college.

 

[lhamo]

If you count the employer contributions to our retirement plans, we are coming in at around 42% of gross going toward overall savings. That includes the following:

1) Maximum personal contribution to employer sponsored retirement plans (403b for DH (including catchup contribution), Roth 403b for me)

2) Employer contribution to retirement plans -- 2% of salary for DH, 7.5% for me

3) Maximum allowable contribution to ROTH IRAs for each of us -- less than typical because we can only count income earned in the US for this purpose

4) $500/month to kids college funds

5) Roughly $1200/month in cash savings -- that was last year's end of year monthly average. This year I think it should go up

Per the comment above, these calculations include the employer retirement contributions as an "input" to gross.

lhamo