What percentage of your gross salary goes into tax deferred retirement accounts?

[nun]

Most financial advisers suggest that we put 10% or 15% towards retirement. So how much do you contribute? and where does it go.

I'm lucky to be employed by a state university so I have access to a 457, 403b and 401a plans and as I'm over 50 I can contribute $22.5k a year to the last two.

 

[Fermion]

$17,500 + $5000 backdoor roth is the best you can do in the private sector working for an employer. This kind of makes the poll very spikey at a certain number since you said only tax deferred.

Edit: ok, and I guess HSA if you have that available.

 

[JoeWras]

15%. But next year I'll be bumping it up since I can participate in "catch-up".

I don't have anything except 401k and HSA, being in MegaCorp.

The funny thing is I see many w*rk friends think 401k is enough, like somehow the government determined that $17000 is perfect for everyone and you can easily retire with it. Strange thinking, especially when MegaCorp has no DB plan, as most don't these days.

So, of course, I save another 15% or so in taxable accounts of various types. I'm at that period in life and near ER that I can do that. I know everyone can't. At the end of the year, any extra also gets saved, so the % ultimately goes up every year depending on the year's expenses.

Oh yeah, I also participate to the max in an HSA, but that's not much you can defer, although every bit counts.

I tell the fresh kids out of college who totally eschew the 401k to start with *something*, what ever they can. If they are at zero (most are), I encourage they start with 2% at least, better if they can reach the company max. Then put in a plan to increase every year. That's what I did, and I'm glad for it. Our plan has an "auto increase" option which I encourage for the youngsters.

I think the 10-15% comes from the average of knowing so many are at 0%, they keep the goal realistic. In my opinion, you have to strive for more. I didn't go beyond 15% until my 30s, although effectively I may have reached it earlier if I include the extra principal I threw into the mortgage back then.

 

[timeasterday]

23% with most going into a 401k and the rest into a Roth IRA.

 

[scrabbler1]

In my 23 working years, it varied a lot. It started at 3%, rose to 6%, rose to 16%, went back to 6%, rose to 10%, and went down to 0%. It is 0% now because I am ERed.

 

[Koogie]

5% or so.. we're hoping to retire "capital E" R so our "room" to put money into tax deferred accounts is very low compared to our overall savings/retained earnings rate.
Mind you, if you listen to the ever increasing chorus of nutjobs (i mean commentators) out there, there are conspiracy theories saying that eventually Western governments will have to start fooling around with these tax deferred accounts anyway as the sums being sheltered will start to look really enticing to them once tax revenues have to be increased to pay for all the bad decisions being made currently.

 

[MichaelB]

The few opportunities I had at US type tax deferred savings I always maxed at whatever the limit was, but that was always less than 10%. Because it was in soft currency we lost badly as the currency lost value. Almost of our saving was in taxable (and US$), something that bothered me at the time but is not so bad now that we are in withdrawal mode.

 

[ChrisC]

From our current annual gross income, 16% is the maximum amount that we in fact contribute into deferred tax accounts , maxing out on all traditional retirement accounts (401Ks, 457, 401a) and HSAs. We also contribute 7-8 percent into defined benefit plans (also known as pensions).

 

[nun]

I max out all of my tax deferred saving opportunities and I'm at 42% of gross salary. It's probably excessive, but it really reduces my taxable income and my plan it to do ROTH rollovers to keep my taxable income in the 15% bracket and limit RMD from IRAs. I manage to save 18% after tax so I'll have enough to fund my ER to 59.5 spending and be able to fill the 15% bracket with those rollovers.

 

[Brett_Cameron]

During my 24 year contributions to my mega-corp 401k plan, my contributions as a percentage of total pre-tax salary (base plus bonuses) , not counting company match were:

Maximum 21.79%
Arithmetic Mean 7.16%
Median 5.61%
Minimum 0.14% (initial year 1988)

Company match varied from maximums of 3% to 4% of pretax base salary income over the years at fractions of 50% to 70% of my contributions depending on whether I was buying company stock or not. I divested the company stocks in stages over the years depending on the company stock performance and retired with 0% in company stock. As a percentage of base salary, my contribution rate was at least the percentage eligible for maximum company match (6% of base salary) for 18 of the 24 years. I followed the plan of start with something and ramp up contributions each year until I reached the maximum amount eligible for company match. Variations in contribution rates varied with current cash flow needs, primarily extensive out of pocket medical costs for DW. Total balance dropped by 40% in one year after divorce from Ex-DW about halfway through.

Edit: I only maxed out pre-tax contributions for a few years.
Edit 2:
1988 0.14%
1989 2.85%
1990 4.87%
1991 8.50%
1992 7.13%
1993 5.79%
1994 5.36%
1995 5.37%
1996 5.87%
1997 4.70%
1998 5.44%
1999 4.61%
2000 6.93%
2001 8.16%
2002 4.63%
2003 7.22%
2004 21.79%
2005 12.83%
2006 14.59%
2007 10.18%
2008 10.53%
2009 5.06%
2010 4.73%
2011 4.53%

 

[nun]

This being an ER site I'm glad to see that the "0%, nothing, nada" option is still at 0%

 

[2035]

23-24% in 401(k) + max limit in Roth

So far, so good. I started the year with $98,000, now I have $132,000.

 

[travelover]

When I was working, I contributed about 40% to my 401(k), a portion of it after tax. Not all plans allow this. DW maxes out her 403(b) plus Roth allowances.

 

[nun]

The change in %age of salary going into retirement accounts over working life would be interesting to know as well. I started out at 6% to get the full company match and slowly increased over the years as my salary and opportunities to save tax deferred increased.

I'd like to see financial advisers encouraging people to increase the %age each year maybe 1% a year. Of course that is hard to do when salary increases often don't even keep up with inflation

 

[Alan]

$17,500 + $5000 backdoor roth is the best you can do in the private sector working for an employer. This kind of makes the poll very spikey at a certain number since you said only tax deferred.

Once you are over age 50, the 401k limits are increased by $5,500, plus you can make another $1,000 contribution to your IRA.

 

[timeasterday]

I'd like to see financial advisers encouraging people to increase the %age each year maybe 1% a year. Of course that is hard to do when salary increases often don't even keep up with inflation

That was my goal. But a few years of zero to 1.5% pay raises and many weeks of furloughs kept my saving % pretty flat. I'm hoping the worst is behind us and things will start looking up going forward.

 

[martyb]

I max my TSP + over 50 catch-up for a total of 22,500. Wife does 30% of her salary to her 401k. That totals 33.5% of our combined incomes. We also contribute to our Roth IRA's but it's hard to max them. Once I retire next year, wife will double her 401k contributions for her remaining 3 yrs of work.

 

[gauss]

Since 2010 (when the Roth IRA conversion rules were liberalized) , DW and I have both been doing ~ 50% to the 401(k).

The motivation for this was that both of us work for legacy MegaCorps which allow after tax contributions up to the IRS limit (about $50,000 per person).

We are then able to rollover the contributions each year to our Roth IRAs and only pay tax on the growth of the contributions prior to the rollover.

Full discussions available over at fairmark.com

-gauss

 

[MasterBlaster]

Most financial advisers suggest that we put 10% or 15% towards retirement. So how much do you contribute? and where does it go.

If you want to know how well others on this thread are funding their retirement, then this poll won't tell you what you want to know.

(Per the thread title) Why are we restricting "retirement" funding to only tax deferred accounts ?

The quoted 10-15 percent advice (per the advisor gurus) includes any employer match.

You'll find though that many on this forum, when you include all funding, save close to 50 percent towards retirement.

 

[nun]

$17,500 + $5000 backdoor roth is the best you can do in the private sector working for an employer. This kind of makes the poll very spikey at a certain number since you said only tax deferred.

Edit: ok, and I guess HSA if you have that available.

The question is as a %age of salary so that will reduce the "spikiness" and many people have more than company 401ks as tax deferred savings opportunities.

 

[nun]

If you want to know how well others on this thread are funding their retirement, then this poll won't tell you what you want to know.

(Per the thread title) Why are we restricting "retirement" funding to only tax deferred accounts ?

The quoted 10-15 percent advice (per the advisor gurus) includes any employer match.

You'll find though that many on this forum, when you include all funding, save close to 50 percent towards retirement.

I'm interested in the %age of salary going into tax deferred savings......I realize that that is not the only way people fund retirement.

 

[foxfirev5]

I've got mine down to 10% - just enough to get the company max match. After 30 years in the 401k with max contributions most years I don't need anymore tax deferred. At this point I need to emphasize taxable accounts to bridge ER and give some income tax flexibility in future years.

 

[Mulligan]

Knowing that my retirement pension income was in the same tax bracket that I worked in, I saw know benefit for pretax investing since no matches were given. I do fully fund my HSA now, but that is it unless next year, I need to defer income to capture a tax credit, then I will put some in it off my part time job earnings.

 

[Koolau]

Back before ER, I was contributing the max dollar amount which was on the order of 18% at the time IIRC.

Not to throw a wet blanket on the idea of deferred savings, but it's a good idea to know how current tax law will affect withdrawals and make a guess at how future tax laws might affect withdrawals. Due to good deferred savings, a half decent match and amazing results on company stock in the plan, I ended up with way more than half my stash in deferred accounts. My main "j*b" since ER has been figuring out how to get money out of this stash without giving most of it to the gummint. It ain't easy. My point is that deferring taxes is a strategy which can backfire if you don't manage it carefully. Only a word to the wise as YMMV.

 

[foxfirev5]

Back before ER, I was contributing the max dollar amount which was on the order of 18% at the time IIRC.

Not to throw a wet blanket on the idea of deferred savings, but it's a good idea to know how current tax law will affect withdrawals and make a guess at how future tax laws might affect withdrawals. Due to good deferred savings, a half decent match and amazing results on company stock in the plan, I ended up with way more than half my stash in deferred accounts. My main "j*b" since ER has been figuring out how to get money out of this stash without giving most of it to the gummint. It ain't easy. My point is that deferring taxes is a strategy which can backfire if you don't manage it carefully. Only a word to the wise as YMMV.

Exactly what I'm running into. I think that the issue of too much tax deferred would affect this group much more than the general population. The fact that the majority of people save too little is much publicized while chronic LBYM people are a minority that don't get the attention.