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View Poll Results: What percentage of your gross yearly income do you save for retirement? "Income" = payche
0% - 2% 3 2.46%
3% - 5% 1 0.82%
6% - 8% 1 0.82%
9% - 11% 8 6.56%
12% - 14% 5 4.10%
15% - 17% 7 5.74%
18% - 20% 5 4.10%
21% - 23% 10 8.20%
24% - 26% 7 5.74%
27% - 29% 4 3.28%
30% - 32% 13 10.66%
33% - 35% 8 6.56%
36% - 38% 6 4.92%
39% - 41% 5 4.10%
42% - 44% 11 9.02%
45% - 47% 1 0.82%
48% - 50% 7 5.74%
51% - 53% 3 2.46%
54% - 56% 3 2.46%
57% - 60% 2 1.64%
More than 60% 12 9.84%
Voters: 122. You may not vote on this poll

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Re: What percentage of your gross income do you save?
Old 10-27-2005, 11:30 AM   #41
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Re: What percentage of your gross income do you save?

I see people with bad math (or should I say modern math)....

They say I spend $X a year and also save $X per year so my savings is 100%... well, that is just wrong.

Your gross is 2X plus taxes (which I will say is 1/2X) or 2.5X. Therefore your saving rate is 1 / 2.5 X or 40%.

I think the survey results are skewed because of this. I can not see all these people saving at a 60% plus rate no matter what their income (not saying there are not people doing this, but I doubt it is many).
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Re: What percentage of your gross income do you save?
Old 10-27-2005, 11:52 AM   #42
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Re: What percentage of your gross income do you save?

Quote:
Originally Posted by Texas Proud
I see people with bad math (or should I say modern math)....
You just haven't seen enough of these threads yet, TP. Wait until someone brings up the issue of whether rising home equity counts as savings.

Ooops, too late.
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Re: What percentage of your gross income do you save?
Old 10-27-2005, 11:53 AM   #43
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Re: What percentage of your gross income do you save?

Quote:
Originally Posted by Texas Proud
I see people with bad math (or should I say modern math)....

They say I spend $X a year and also save $X per year so my savings is 100%...* well, that is just wrong.
Well, I think the people you're thinking of are doing a comparison of savings rate versus "burn rate," as someone suggested in a previous post.* But I think (and hope) that when answering the poll, people were doing the calculation this way:

If your gross salary is $100,000, and you put $50,000 a year into retirement savings, you saved 50% of your gross salary toward retirement.

I admit though, that I am shocked that so many people claim to save more than 60% of their gross salaries. *There's no way I'll ever be able to approach that.
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Re: What percentage of your gross income do you save?
Old 10-27-2005, 12:15 PM   #44
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Re: What percentage of your gross income do you save?

My wife and I were in the 60% club last year and we're going to be arounf 40% this year. There is no way we could ever maintain that 60% from last year for several reasons.

1. We live in a condo for now and have not jumped in to buy the house yet. The way prices are around here north of Chicago that will kill our savings %

2. We don't have any kids yet which will change in a year or 2.

3. My company happened to have a great year in 2004 which may never be repeated again. That's why we were able to save so much last year.

I'm able to save about 20 - 25% of my salary, the rest comes from my bonus so my rate may be 20% to 60+ depending on the year
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Re: What percentage of your gross income do you save?
Old 10-27-2005, 03:48 PM   #45
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Re: What percentage of your gross income do you save?

Here is where I have a problem with the people who say they save over 60% (again, some might, but 10% of the people... BS!!)

Let's say you do have a good wage in the family. You and your wife make about $140,000. What do you pay in taxes? I will make it easy and say you have taxable income of $117,250... your FEDERAL INCOME TAX is $22,788. This does not inclued payroll taxes of about $7,500. Now, I live in a state that does not have state income taxes, but you have to factor this in for a number of people...

Now, since you say you save 60plus%, that means you put $84,000 in savings. You are down to $56,000 before taxes... subtract out the taxes and you are down to about $26,000. I do not know many people who make $140,000 gross per year that wants to live on $26,000....

So, I still take the results with a big grain of salt...
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Re: What percentage of your gross income do you save?
Old 10-27-2005, 04:05 PM   #46
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Re: What percentage of your gross income do you save?

A debt-free family in a low cost of living area living the simple life can easily live on $26,000 after tax a year and have plenty.
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Re: What percentage of your gross income do you save?
Old 10-27-2005, 04:51 PM   #47
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Re: What percentage of your gross income do you save?

Quote:
Originally Posted by Texas Proud
I see people with bad math (or should I say modern math)....

They say I spend $X a year and also save $X per year so my savings is 100%... well, that is just wrong.

Your gross is 2X plus taxes (which I will say is 1/2X) or 2.5X. Therefore your saving rate is 1 / 2.5 X or 40%.

I think the survey results are skewed because of this.
My "modern" math was correct given the constraints in the post I quoted. "Relative to your expenses (burn rate) what percentage are you saving ?"

So, yeah, if I spend $3000 a month, I save $3000 a month.

In any case, I haven't voted, so you can rest assured that I didn't skew the precious poll results.


Justin: Impossible! No one can live on less then $50k a year!

Edit: removed a line
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Re: What percentage of your gross income do you save?
Old 10-27-2005, 05:12 PM   #48
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Re: What percentage of your gross income do you save?

From 42-44% - that does count the employer matching on the 403B of 7%.

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Re: What percentage of your gross income do you save?
Old 10-27-2005, 07:21 PM   #49
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Re: What percentage of your gross income do you save?

Quote:
Originally Posted by justin
A debt-free family in a low cost of living area living the simple life can easily live on $26,000 after tax a year and have plenty.* *
Yep, and we are living proof.

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Re: What percentage of your gross income do you save?
Old 10-27-2005, 07:26 PM   #50
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Re: What percentage of your gross income do you save?

Quote:
Originally Posted by Texas Proud
* I do not know many people who make $140,000 gross per year that wants to live on $26,000....

So, I still take the results with a big grain of salt...
I am not disputing your post, but I was close to 140K per year
(counting bennies) for several years, and I am more than content
at 26K gross (for 2). In fact, it was easy.

JG
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Re: What percentage of your gross income do you save?
Old 10-28-2005, 01:08 AM   #51
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Re: What percentage of your gross income do you save?

No fancy math for me. According to the spreadsheets we have 16.7% of gross going straight to retirement accounts this year.

That's with no matching, no mortgage (we rent), one income, no kids, ages in early 30's, low taxes, and living in a high cost of area. Our savings rate will go up when I start working fulltime again soon, but no biggie if it doesn't - we're still on track to reach our goal. We save beyond the 16.7% for things other than retirement - cars, trips, emergencies, etc. and don't feel deprived. However, more than 20% for retirement would probably be a stretch right now.
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Re: What percentage of your gross income do you save?
Old 10-28-2005, 08:32 AM   #52
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Re: What percentage of your gross income do you save?

The main reason that my savings rate comes up at over 60% is because of the criterion in the poll that said to ONLY count your wages. However, I have roommates, who chip in for food, utilities, etc. One of them also borrowed money from me and is paying me back at the rate of $500 per month. He's mostly caught up though, so that cash flow will dry up soon. Plus, my checking account has slowly been drawing downward, and I might have to cut back next year. But for this year, I'm on track to put away around $34,000, or 65% of that $52K I'll be earning. But next year, it'll be somewhere less than 65% guaranteed, but more than 35%, which is about what the max 401k and Roth IRA contributions come out to.

Also, keep in mind that some savings, like the 401k, reduces my taxable income. So while my gross is $52K, just the 401k knocks that down to $38K. Then there's that personal exemption of $3100 or whatever, which brings me down to $34,900. Throw in the state/local tax write off, mortgage interest deduction, and so on, and I'm probably down to the 15% bracket or, at the worst, marginally into the 25%.
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Re: What percentage of your gross income do you save?
Old 10-28-2005, 08:48 AM   #53
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Re: What percentage of your gross income do you save?

Quote:
Originally Posted by FlowGirl
No fancy math for me.* According to the spreadsheets we have 16.7% of gross going straight to retirement accounts this year.*
"16.7% of gross" looks like "fancy math" to those of us who don't even
have a spreadsheet, or a budget for that matter.

JG
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Re: What percentage of your gross income do you save?
Old 10-28-2005, 08:51 AM   #54
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Re: What percentage of your gross income do you save?

Pretty impressive Andre. I guess you are evidence that a 50K salary can lead to nice savings but I bet you are an exception.
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Re: What percentage of your gross income do you save?
Old 10-28-2005, 09:14 AM   #55
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Re: What percentage of your gross income do you save?

In my first mariage, my wife spent 50% more than we made.

After the divorce, I was living on less than $25k; most of which went to pay off debt and support payments. I also had a house and car payments in there and was raising my kids along with paying off previous debt of BIG $$. I do not want to go back to that level of net income again.

My second wife and I saved about 40% of gross for several years; but lost a big chunk to company problems and market "correction" in '99-'00. (Long story)

Current wife and I both work and save about 35% of gross. That does not include debt reduction payments (other than mortgages) so if we saved those extra payments it would be closer to 40-45%. Now, if I can just get her to stop buying shoes...... 8)

I cannot imagine living on $26k again.

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Re: What percentage of your gross income do you save?
Old 10-28-2005, 09:39 AM   #56
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Re: What percentage of your gross income do you save?

Quote:
Originally Posted by wildcat
Pretty impressive Andre. I guess you are evidence that a 50K salary can lead to nice savings but I bet you are an exception.
I'm on the cusp of contributing 60%. Wife and kid. Right around $50k income. Not paying federal income tax helps. We live a comfortable middle class lifestyle. Wife is a stay at home mom. It does take discipline though. I think we're both too busy to spend money!

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Re: What percentage of your gross income do you save?
Old 10-28-2005, 09:59 AM   #57
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Re: What percentage of your gross income do you save?

First, I am not saying it is IMPOSSIBLE to do... just that it is unlikely. Again, here is the question:

Question: What percentage of your gross yearly income do you save for retirement? "Income" = paychecks from your employer, not dividends or interest on appreciating assets. "Savings" = money specifically earmarked for your retirement.

So, putting payments you get from a loan you gave to whomever does not count as savings in the poll. Reinvested interest and dividends do not count as savings as they do not count as income.... I would also say that paying living expenses from your loan repayments and interest etc. is not correct...

Again, it is not out of the realm that people are saving in the 40% to 50% range, but 60% and over?

But, it seems like there are many people who still say they do... so I will just
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Re: What percentage of your gross income do you save?
Old 10-28-2005, 10:21 AM   #58
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Re: What percentage of your gross income do you save?

I didn't vote in the poll because my situation is changing rapidly and the "earmarked for retirement" comment. Debt reduction could be considered "saving", too, and debt reduction was a large portion of my salary from mid-2001 through 2004.

For much of the time from 1991 through 1999 I was saving 15% of gross into my 401(k). Right now I'm saving about 2% in my 401(k)...just enough to get full company match, but my total savings rate is somewhere between 15% and 25%, but again most of that is buffer money for some drastic changes.
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Re: What percentage of your gross income do you save?
Old 10-28-2005, 10:49 AM   #59
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Re: What percentage of your gross income do you save?

Quote:
Originally Posted by Texas Proud

Question: What percentage of your gross yearly income do you save for retirement?* "Income" = paychecks from your employer, not dividends or interest on appreciating assets.* "Savings" = money specifically earmarked for your retirement.*
I would say that you need another way to look at this. If you are including ONLY what you can put in your retirement plans offered by your employer or personal IRAs and other specific Fed. recognized retirement plans, then you are not counting other areas that lead to FIRE.

In my case, these "savings" are from only wages:
DW 401k=20%
My 401k=12%

Total "retirement" savings=32%

But, other savings that will be used to generate income during retirement but are not part of any "plan" include the following:
After tax portfolio=3%
Pre-tax company stock purchase plan=10%
After tax CD, MM and general savings accounts=10%

Total other savings=23%

Total "savings" of all types=55%


There is another 15% or so that goes for investment loan payments, extra mortgage payments and general savings accounts that will all be used to fund my income stream once I do ER.

The way I look at it, all of these help me get to FIRE much sooner. Saving is spending on me and my future.
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Re: What percentage of your gross income do you save?
Old 10-28-2005, 12:52 PM   #60
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Re: What percentage of your gross income do you save?

Quote:
Originally Posted by SteveR
In my case, these "savings" are from only wages:
DW 401k=20%
My 401k=12%

Total "retirement" savings=32%
So are you having 12% of your pay withheld and your wife is having 20% of her pay withheld? If so, you're total retirement savings rate isn't 32%, but something less. For example, if your income plus your wife's income is $112,500 and you put 32% of that into 401k's, you've maxed your 401k's for the year (assuming 18,000 per person with the over 50 catch up provisions). If your incomes are higher than $112,500, then you couldn't have put in 32%, you'd exceed the max. What you're saying is the two of you don't make more than $112,500? I thought you had alluded to making much more than that? Or are you really not contributing 32%? Maybe Texas Proud has you figured out??

I think like you do about debt repayment - repaying investment loans in my mind counts as "savings". I didn't include it in my percentage I used to vote here, but in my mind I don't distinguish between debt reduction and savings - both have equal effects on the bottom line - net worth (assets minus liabilities).
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