How much do you put away?

[azanon]

I don't really think it's unbelievable that a family of 4 making over six figures can save around half of what they make (when, in my case, I pay very little income tax).

Its not a matter of being believeable or not. Its a matter of being rational or not.

In the small town i grew up in, you can live like more than half of the residents there on 15K a year. Question is, does it make sense for a 6 figure income person to live that way? Restated, why work so hard to get to such an important, high paying position in life just to hoarde money in the bank? Perhaps just as illogical, why work so hard to get in a powerful position of authority just to see how fast you can quit it? I don't get it.

I"m all for FIRE and saving way above the american norm, but one can overdo it, i think.

Also, there's just not a lot of feasible stuff that I want right now.

come stop by my house and see my 40" Sony HDTV in action, and i can fix that real quick.

If I had more time to play or enjoy "things", then I could spend some money on a few things! But who has tons of free time with kids, a job, and a working spouse, familial and social obligations, etc?

Me? Maybe a change in jobs is in order?

If I had an extra 45-50 hrs/wk for "me" time, I could probably fill it up with something fun.

Sounds like a plan! If you want some help on job ideas, just pm me.

 

[azanon]

Edit to add: I'm almost positive that this has been discussed before more than once:

You only found one? I didn't pick on the OP on that, but i'd almost guess its the most asked question at this forum in various forms, such as polls too.

 

[saluki9]

My base is in the low 6 figures and my bonus is usually about 30-75% of my base. This year I vowed to save 40% of my gross, and it looks like we're going to miss that by a few% which puts us at saving 37-39% of my gross. My wife doesn't work.

We took a couple last minute trips, I spent a stupid amount of $$$ on electronics this year, and I bought a new car.

We're trying to sell our condo and buy a house at which point I know our savings % will go down.

 

[maddythebeagle]

Past polls have put a lot of folks in the over 40% crowd, which I dont have any problem believing.....I havent been finding it too difficult....we dont eat out a lot and not crazy about expensive vacations, went to good state school with engineering degree so have nice income and little debt coming out...lower cost housing since not on either coast, too

 

[HFWR]

Ballpark this year is 20%, plus some matching, plus some extra on the mort...

 

[ADJ]

me & SO... our combined after tax take home is ~ 100k...
4k + 4k = 8k into roth IRAs
15k + 15k = 30k into roth option 403b and 401k
~ 2k a month into after tax stock fund = 24k

so we put away about 62k a year. it may actually be closer to 70k. we are pretty cheap (but just as happy as can be).

Just curious Macdaddy, how is it possible for you to live on $30,000/year? Is your house paid off? Do you not have a family? We are a family of four with two little children and after paying for all the extracurricular activities, taking a vacation annually, etc., it would be impossible to live on that. I wonder where in the US, a family of 4 can live comfortably on $30K a year. I am one of the most frugal person but I would find life very difficult if I had to live on such little money. One of the most important things I do is to provide my children with enrichment experiences (e.g. skating, swimming, music, etc.). Don't most middle class parents do that? Again, just curious. Please tell me your secret.

 

[dmpi]

Gross salary?
Yearly savings?
Yearly living expenses?
Projected/hoped for age at ER/FI?
What dollar amount are you shooting for?

OK. Since you asked, here is mine:

Salary: DW & I make a combined 200K.
Yearly savings (from salary): 120K
Yearly living expenses: 28K (for last year).
Projected/hoped for age at ER/FI: 55-57 (7-10 more years)
What dollar amount are you shooting for: 5M

 

[Spanky]

OK. Since you asked, here is mine:

Salary: DW & I make a combined 200K.
Yearly savings (from salary): 120K
Yearly living expenses: 28K (for last year).
Projected/hoped for age at ER/FI: 55-57 (7-10 more years)
What dollar amount are you shooting for: 5M

Based on your projected target and annual savings, the current portfolio is over 1M assuming a return rate of 10% and an annual 5% increase in savings. You have sufficient funding to retire now since your living expense is only $28K while a 4% SWR would provide more than $40K. Why shoot for $5M? Are you expecting your expenses will increase to warrant an income of $200K?

 

[dmpi]

Based on your projected target and annual savings, the current portfolio is over 1M assuming a return rate of 10% and an annual 5% increase in savings. You have sufficient funding to retire now since your living expense is only $28K while a 4% SWR would provide more than $40K. Why shoot for $5M? Are you expecting your expenses will increase to warrant an income of $200K?

My DW & I are quite happy and content with our current standard of living. So we plan on living our retirement pretty much the same way we live now. Right now our jobs are fairly interesting. We don't mind working until we reach 55. Also our workplace covers our medical, so that works out well.

We are strong believer in environmental causes. We have plans for the extra money. The plans are a bit fuzzy right now, but they involve buying up land to protect small animal habitat. My DW & I are both long distance runners, and we are blessed to be able to run on urban trails that actually contain wildlife. As the years go by we have seen the animal habitat slowly being destroyed by construction. We want to do our little part to help.
I'm sure some of you guys think this is silly.

 

[macdaddy]

Just curious Macdaddy, how is it possible for you to live on $30,000/year? Is your house paid off? Do you not have a family? We are a family of four with two little children and after paying for all the extracurricular activities, taking a vacation annually, etc., it would be impossible to live on that. I wonder where in the US, a family of 4 can live comfortably on $30K a year. I am one of the most frugal person but I would find life very difficult if I had to live on such little money. One of the most important things I do is to provide my children with enrichment experiences (e.g. skating, swimming, music, etc.). Don't most middle class parents do that? Again, just curious. Please tell me your secret.

ADJ, we don't have any children, and I certainly think this is the #1 reason why our expenses are so low. Once we do have kids, expenses should shoot up a lot. I would not keep those kinds of experiences from my kids just to try to save a higher %.

 

[BigMoneyJim]

As a single guy I think $30k a year budget is doable. Worked for me for about 5 years. I'd rather have more, but it was good while I was paying off debt. I'll probably spend more next year. $30k included apartment rent.

I started saving 15% of my income to my 401(k) when I was 21. I backed off when I was 29 or 30 to start paying off debt aggressively. Over the next 6 years my contributions bounced up and down a lot from 2% to 25% (briefly after debt paid off). At the moment I'm pretending to be ER but need to get a job real soon. I want to enjoy myself more so who knows what I'll be saving in the next 5 years.

I don't feel like giving hard numbers, but I noticed that every time I got a raise I started getting tighter and tighter on money at the end of the month because I would upgrade my apartment, my car, etc., etc.. So I had to find a balance between living well enough and living below my means. Now that things are under control I'll probably play around with the balance for the next year or two. I figure about the time I have it figured out somebody will want to marry me and screw it all up.

 

[LOL!]

Gross salary?
Yearly savings?
Yearly living expenses?
Projected/hoped for age at ER/FI?

Gross salary: Reasonable for two working professionals.
Yearly savings: One of our salaries.
Yearly living expenses: Counting payroll taxes? It makes a big difference cuz they are something like $50K a year.
Age of ER/FI: ER whenever we feel like it. FI was a few years ago.
Amount invested: A couple of big ones.

Oh, and yes, we have young children.

 

[macdaddy]

I figure about the time I have it figured out somebody will want to marry me and screw it all up.

If you find the right person you can get there twice as fast!

 

[Spanky]

We are strong believer in environmental causes. We have plans for the extra money. The plans are a bit fuzzy right now, but they involve buying up land to protect small animal habitat. My DW & I are both long distance runners, and we are blessed to be able to run on urban trails that actually contain wildlife. As the years go by we have seen the animal habitat slowly being destroyed by construction. We want to do our little part to help.
I'm sure some of you guys think this is silly.

Thanks. I do not think it's silly -- it's noble. Continue the good work caring for the small animals.

 

[justin]

Its not a matter of being believeable or not. Its a matter of being rational or not.

In the small town i grew up in, you can live like more than half of the residents there on 15K a year. Question is, does it make sense for a 6 figure income person to live that way? Restated, why work so hard to get to such an important, high paying position in life just to hoarde money in the bank? Perhaps just as illogical, why work so hard to get in a powerful position of authority just to see how fast you can quit it? I don't get it.

I"m all for FIRE and saving way above the american norm, but one can overdo it, i think.

come stop by my house and see my 40" Sony HDTV in action, and i can fix that real quick.

Me? Maybe a change in jobs is in order?

Sounds like a plan! If you want some help on job ideas, just pm me.

It sounds like you have made your choices in life. And that is ok. Other people live differently and value different things in different ways. And that is ok too.

I'll just say that neither DW nor I are in "positions of power" so to speak. We are both at the "entry level" in our respective professions (analyst at investment bank and engineer). When you find someone to pay me for traveling the globe, drinking beer on the beach while perfecting my tan, killing space aliens in the latest first person shooter video game, reading books while hanging out lakeside in my backyard, or wrasslin with my kids, please give me a call. I'll even give you 20% of my gross salary as a headhunters fee.

Until that time, I'll keep spending 40-42 hrs a week at work, and another 5 or so getting ready for work and commuting to work. And saying "yes sir" to my boss, and making the most of it while I am employed. I want the money. The job isn't so bad (as far as jobs go). The money is very nice. Good friendly folks at work (in general).

Az, I am sincere when I say I am glad for you if you have found a truly meaningful and rewarding job. Probably more accurate to call it your avocation. Maybe one day I'll find mine. In the meantime, I'll stick with the devil I do know versus the devil I don't.

 

[ylm23]

To respond to ADJ, remember that was $30k NET. We live on about that, would be less if student loans are paid off, but we won't b/c i-rate is too low.

We don't have kids, and I think that is a big factor, but we do own our home and have a mortgage. (The disclaimer is the $30k will be once we sell our house and only have the cabin - which is in process - but we only paid $6k less for it than we paid for the house so it is comparable). We live in Philly, which I would say has one of the most reasonable COL of any decent sized city, and we make careful choices on how we spend our money. We don't deprive ourselves of anything we really want, but we don't bother paying for things we don't really want.

We aren't saving that much for retirement right now b/c I just finished paying off expensive SL (I consider the thousands I've saved in interest as a sort of savings, but I can't pay my mortgage on it!), but DH maxes his 401(k) and I max my Roth. Also with his new gov't job he gets a pension, which will definitely help us FIRE.

 

[bow-tie]

...We are strong believer in environmental causes. We have plans for the extra money. The plans are a bit fuzzy right now, but they involve buying up land to protect small animal habitat...We want to do our little part to help. I'm sure some of you guys think this is silly.

Kudos to you. As long as your goals don't interfere with anyone else's happiness, then don't lose a minute of sleep wondering if anyone thinks it's silly.

 

[Andre1969]

As the years go by we have seen the animal habitat slowly being destroyed by construction. We want to do our little part to help.
I'm sure some of you guys think this is silly.

Heck, as someone who's come close to getting run over or causing accidents while plucking turtles out of the road, and would try to catch a spider and let it outside before killing it, I definitely don't think it's silly!

 

[bow-tie]

Heck, as someone who's come close to getting run over or causing accidents while plucking turtles out of the road...

I remember one summer I was crusing around town in my car and saw a huge turtle dawding along the side of the street. I went home, grabbed a cardboard box, went back, almost got bit, got it into the box, and then drove 20 minutes to the local lake, and dropped him/her off.......
And come to think of it, I probably robbed the little fella from its home and took it somewhere far off and unfamiliar. Dammit... and here all this time I thought I was generating some good karma!?!?!

 

[Patrick]

I remember one summer I was crusing around town in my car and saw a huge turtle dawding along the side of the street. I went home, grabbed a cardboard box, went back, almost got bit, got it into the box, and then drove 20 minutes to the local lake, and dropped him/her off.......
And come to think of it, I probably robbed the little fella from its home and took it somewhere far off and unfamiliar. Dammit... and here all this time I thought I was generating some good karma!?!?!

So far my wife has rescued three turtles from certain death in the road. One of them only had 3 legs - we assume the 4th leg was removed by a gator that wanted some lunch. We probably did not get them back to their homes either, but at least they weren't road kill.

 

[donheff]

When you find someone to pay me for traveling the globe, drinking beer on the beach while perfecting my tan, killing space aliens in the latest first person shooter video game, reading books while hanging out lakeside in my backyard, or wrasslin with my kids, please give me a call.

Thats called FIRE. It is what this board is about. Just keep savin and you'll get there.

 

[justin]

Thats called FIRE. It is what this board is about. Just keep savin and you'll get there.

Exactly. It is a goal that I spend my money on (in the form of investments).

 

[shiny]

We are strong believer in environmental causes. We have plans for the extra money. The plans are a bit fuzzy right now, but they involve buying up land to protect small animal habitat.
I'm sure some of you guys think this is silly.

You are not silly - you are great!

 

[Calgary_Girl]

Gross salary?
Yearly savings?
Yearly living expenses?
Projected/hoped for age at ER/FI?
What dollar amount are you shooting for?
I know this will be different for everyone, but it's still helpful to see the numbers.
Thanks

Gross salary - $197K between DH and myself
Yearly savings - 15% of our gross incomes go into our retirement plans and we also manage to save an additional $3,500/month in taxable accounts. We could probably save more than this but we both love to eat out and travel. Plus, we have a baby at home and are maxing out her RESP (Registered Educational Savings Plan).

Between our retirement and taxable accounts, we currently have about $650K saved.

 

[dmpi]

You are not silly - you are great!

Thanks everyone for the words of encouragement.