What percentage of your gross income do you save?

[bongo2]

Taxes: 26%
Spending: 31%
Savings: 43% (counting employer 401k contributions)

I live a modest suburban lifestyle with a family of 6, and I can't pull it off for only $50k.  The average income in my county is about $70k, and, considering that many people spend over their income, and what you think of as the typical suburban family (middle-age breadwinner or two with children) has a higher than average income, you have to get significantly over that amount make it easy to save money and still "fit in."  You can do it, it's just not as easy.

 

[SLC Tortfeasor]

SLC, what is up with the icon?  I think its hysterical, but appears to be meaningless.

Admittedly, the "meaning" is hard to recognize or interpret.  I could wax poetic for hours about the cosmic significance of Moofie and the "all your base are belong to us" phenomenon, but perhaps the best way for you to learn about them is for you to check out a little research on these subjects.  Then, and only then, will you truly understand.

If you're curious about the dogcow picture, these links will provide you with a decent primer: 

http://whatis.techtarget.com/definition/0,,sid9_gci211983,00.html

http://en.wikipedia.org/wiki/Dogcow

http://www.storybytes.com/moof.html

For info on the "all your base" phenomenon, check out:

http://en.wikipedia.org/wiki/All_your_base_are_belong_to_us

 

[Sheryl]

I saved 42% of my base salary this year. If we take bonuses similar to what the past few years have been, it will be more like 32% of my total gross. This doesn't include the whopping 3% company match. :

 

[TargaDave]

I think the better way to pose this poll is with after tax income since the tax rates can vary significantly as evidenced by some of the posters. Not much we can do about those taxes; definitely envious of those 8% rates.

 

[MasterBlaster]

Perhaps the best question is:

Relative to your expenses (burn rate) what percentage are you saving ?

 

[Sheryl]

As a single person, I spend $38k - $42 per year, after taxes. This has been consistent for the last 5 years. My housing cost is very low, relatively, but my travel/fun budget is pretty high.

In addition I'm putting $14k in 401(k) + $4,000 in Roth + +/-$10k stock fund = $28k.

That's about 75% of what I spend. If the balance in the checkbook gets too high I put more into the stock fund, so the $10 is just a guestimate might be more this year.

 

[bow-tie]

Perhaps the best question is:

Relative to your expenses (burn rate) what percentage are you saving ?

That's how I look at it for the DW and I.  So far this year, we're running our savings at 105% of what we spend (not incl. 401k match).  It helps me keep in perspective the spending vs saving trade-off.

 

[eridanus]

Perhaps the best question is:

Relative to your expenses (burn rate) what percentage are you saving ?

I spend X each month and I save the same amount: 100%.

Martha: I think $50k is a good number for a family if you're not on the coasts.

 

[uncledrz]

Since I've gone to part time, I'm saving somewhere around 10%, when I was working full time, varied from 10% to 75% (depending on actual income). In reality, have to LBYM to even hope to qualify to be a member of the FIRE community.

Uncledrz

 

[uncledrz]

I see some people actually save more than 60% of their gross incomes.  I find that amazing.  How do you do it?  Do you have extremely high incomes?  Live like paupers?  Already have the house paid off?

SLC
I always understood that with no pension I would have to cover all retirement expenses and therefore in good years, always put the majority of income into retirement allocated assets (deferred compenstion vehicles such as IRA, 401K--depending on where I was working at the time, or real estate/stocks for the balance).
We never lived like paupers, but were also not extragavent in our lifestyle, even when our income/net worth would allow it.
Put kids through school (made them pay part), always traveled, ate at good restaurants, drank some very good whiskey, but we (DW and I) knew that we had to prepare for the future.
I suspect, after being on this board for a while, that just about everybody else here prepared in some way.
Uncledrz

 

[Honkie]

Perhaps the best question is:

Relative to your expenses (burn rate) what percentage are you saving ?

OK - Approximately,we save 64% of our total gross income and spend 28%, so relative to expenses our savinng rates is (64/28)*100= 229%.

Not much we can do about those taxes; definitely envious of those 8% rates.   

I should expand to say that the 8% I paid last year was only on "earned" income only i.e. salary.

Our income from dividends, capital gains on sale of property(provided owned for 2 years),  interest  etc is not taxed at all.   

Cheers,

Honkie

 

[azanon]

I'm really inspired by you guys and these massive savings rates.  I have a feeling some of you are adding up just total savings which isnt all necessarily earmarked specifically for retirement, but thats besides the point, you guys are still doing outstanding.

Its clear how some of you reallly are going to pull off a late 30s or 40s escape from the workforce.

I'm probably going to end up sticking with just my very modest 15-20% of gross (for retirement), which is nothing close to most of you, but most likely blows most everyone away where I work.   Seems like i heard the national savings rate just fell below 0%. 

Unfortunately, i have stuff that breaks or gets damaged, liked appliances or roofs that needs new shingles, or machines that wear out like cars, so i have to "save" large sums of money for other stuff too. I have a little 2 year old i'm presuming doesnt want to borrow everything for college someday too, so there's some more non-retirement savings there.

 

[Mr._johngalt]

Pre retirement, -0-
Post retirement, -0-

Never had a structured savings plan in my lifetime, unless you count the brief period when I was in a 401K.

JG

 

[Sheryl]

I have a feeling some of you are adding up just total savings which isnt all necessarily earmarked specifically for retirement, but thats besides the point, you guys are still doing outstanding.

I've had a hard time making this differentiation. My way of looking at it is that I save everything I don't need/want to spend.  It's all for retirement, unless I have to spend it before I retire, then it's not. For example I will need want a new car before I retire.  So that money won't be for retirement. If I go on a trip I'll spend a few $K that is currently in my cash fund.  But it's not  considered as separate savings.    But I don't have kids, potentially dependent parents or any other things that I can see needed to save for.    I do plan to do a major bathroom remodel.  I just look at that as a decision to spend a years worth of retirment living costs on living now, and recognize it reduces the overall long term pot.  KWIM?

 

[Andre1969]

I guess I could break down my total savings into separate categories. Of the roughly $33,600 I'm putting away this year, $4000 is going into a Roth IRA, $14,000 into my 401k, and $15,600 into automatic mutual fund investments. So of my income that should come out to around $52,000 this year, roughly 35% (the Roth + the 401k) is dedicated to retirement.

However, the $15,600 that's going into mutual funds is money that I have no intention of touching unless I really had to, so I consider it to be part of my retirement. Besides, I can't touch the 401k and Roth until I'm like 59.5 years old, I'm kinda counting on my non-retirement investments to help me to ER, since 59.5 is hardly ER

 

[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. 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).

 

[Nords]

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.

 

[SLC Tortfeasor]

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.

 

[saluki9]

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

 

[Texas Proud]

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...

 

[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.

 

[eridanus]

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

 

[deserat]

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

Deserat

 

[Mr._johngalt]

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.

JG

 

[Mr._johngalt]

  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