What is Your Savings Rate? - POLL

[daystar]

I took the poll and apparently I'm a little slacker. I put in about 25% or so.

TSP - 15% + 5% Match
Roth IRA - $4000 per year (8%)

I don't keep close track of my cash flow. Some of the Roth IRA contribution might come from gift money so I'll say I contribute 25% of my money towards retirement.

 

[REWahoo]

Save? Who needs to save? According to a Money article, the average US household net worth has grown to over $400,000 while consumers are spending every penny they make and the national savings rate is zero. How? Real estate. "Bubble, bubble, toil and trouble..." :

http://money.cnn.com/2005/08/02/news/economy/savings/index.htm?cnn=yes

REW

 

[piranha]

I think this has been an interesting discussion, and I'm not 100% sure how I would classify my "savings rate"

If I simply factor in retirement accounts, our family "saving rate" would be around 31% of our gross income

If I include accounts designed for our children's educatoin, the rate becomes around 34% of our gross income.

If I include extra house principal payments that we make every month, the rate becomes around 38% of our gross income.

If I include all principal that comes off my existing loan per year, the rate becomes around 41% of our gross income.


My wife is not satisfied with this and wants to "save" more. I think she's crazy and constantly tell her to let us (and me for that matter... hey... I like to golf) live a little.

She constantly complains and worries about situations like...

"Well, we're going to need a car in 3-4 years"

or... and this one cracked me up today....

"What happens if our kids need braces?" Where are we going to get the $?"

Our children are 4 and 3 years old respectively.


We have an existing rainy day fund of around $25,000 (CD's/Money Market) and around $10,000 to pay the bills.


Talk about ridiculous. I just shake my head at her and bite my lip since trying to explain to her that we save more $ than probably 95% of the people in this country doesn't mater to her.... cuz... according to her "we can always save more!!!!!"

 

[dm]

I guess last year my savings rate was not that great. I did pay off the last 100k on my mortgage, but I guess that may not count as savings. I'll do better this year though without that pesty mortgage payment. Now if I could just get those kids out of school Id be doing great.

We put 24% in retirement accounts.
We also put about 20% in after tax accounts.

As I am retiring early I look at both accounts as being retirement accounts. The only difference is the tax breaks with the retirement accounts and rules about withdraws. The total is what I am concerned with.

 

[maddythebeagle]

From the newly posted article from money mag.-----The Commerce Department calculates the savings rate by taking the difference between after-tax income and all expenditures, including housing, food and clothing.

I guess that I used "gross income" in my question. I actually think that is a better indication because if you use a lot of tax deferred investments or savings, I think it is skewed otherwise.

I think subtracting out each year's mortgage principle that is paid down with your monthly payment might be something to consider, but I thought most people wouldnt have a firm idea of that or wouldnt want to check. Also, if it is a 30 year mortgage and you are on the first few years, it isnt significant and some would argue that is part of your "housing expense".

My main purpose of this poll was for everyone to use the same "metrics" so that Wanabes will then know what it takes. There is millions of ways to measure something, but if you dont compare apples to apples......