What % of your income are you saving for retirement?

[scrabbler1]

Before I paid off my mortgage in 1998, I was saving in the 30%-40% range most of the time. After I paid off my mortgage, I was saving in the 40%-60% range. I am excluding major outlay years such as buying a new car or paying down the mortgage. I retired in 2008 at age 45.

[crowd79]

Taxes: 7.65% Federal payroll taxes + 4.25% State = 11.90% of income
Health & dental: 5%
Retirement savings: 30.10%
Budgeted: 40%
Discretionary/travel (vacations): 13%

Zero Fed income tax liability due to excessive retirement contributions & maxing out all deductions and max Savers Credit.

[Cellardoor621]

Looks like about 35% of my gross, but that includes matching contributions from work, so that's artificially a bit high. Counting only extra student loan payments and savings into tax advantaged accounts. I don't make enough to max out my 401k, so no non-tax sheltered investments to speak of.

[stingray5688]

Wow. I think some of yall just get paid too much.

[papito23]

0% (in grad school)

I don't expect to get within spitting range of all these folks for a long while. I'd like to (and will have to) spend on things that make the most of the years with a young kid(s). Don't ever get those years back - daughter is already 18 mos old.

[Grt2bOutdoors]

Wow. I think some of yall just get paid too much.

I think we work hard for it or did you skip the part where I wrote it takes sacrifice.

[serbeer]

34% of gross, 45% of net income

[Sunflower]

Wow. I think some of yall just get paid too much.

Trust me, I don't -- I'm below median for my town. I knew I would never be able to afford a home in the SF Bay Area so I have no mortgage and no money to buy one outright but have healthy retirement accounts. But while I may have a nice amount in a 401(k)/Roth IRA I may be backing myself into a corner if I want to buy elsewhere. I believe I will ultimately move to a lower cost area in retirement where homes are affordable. But all my money will be tied up in those retirement accounts, so I'm not sure how to go about buying. This has me wondering and questioning.

[awval999]

15% 403b (maxes out)
3% 403b match
~4% Roth IRA
2.5% 401a contribution
-------------------------
~24.5% total (self + workplace; a mix of pre and post tax)
----------------------------------
+ 12% student loan payments
+ 28% net effective total taxes
-------------------------------------
I spend the rest

[Meg77]

I've been maxing out my 401k for a few years now, but since my income varies the percentage of savings toward retirement has varied as well. At it's most simplistic my base salary is $101K and so I save 17.3% of my income toward retirement. Of course that doesn't include employer matcing, rental property amortization (properties are held for retirement income), or any other savings/investments/business interests.

[zaboomafoozarg]

Wow. I think some of yall just get paid too much.

Maybe by Arkansas standards

[ryuns]

Never done the math. Let's see.

~24% 401k/403b (I get both, for some reason, so no worries about contribution limits)
~8% for pension (roughly matched, in theory)
~15% of net for Roth

8% of gross for taxable savings (new car, vacations, etc).

[JuanZ]

Was 40% of gross. Dear wife, not that much. I'll get laid off in June, so most is going to emergency fund now.

[radchad3]

Not sure how everyone calculates their percentages but I take the total amount saved (pre and post tax) and divide it by our W-2's. Calculating it this way gave us about 42% savings rate for 2012.

[rr2]

Not sure how everyone calculates their percentages but I take the total amount saved (pre and post tax) and divide it by our W-2's. Calculating it this way gave us about 42% savings rate for 2012.

Which Box of the W2 do you use? Box 1 usually excludes pre tax 401k contributions and health insurance premiums and other pre tax deductions. If so you are calculating as fraction of net income. If you use Box 3 that is likely to be closer to your gross income.

I calculate everything as a fraction of gross income. To the gross income I add any employer 401k contributions.

[radchad3]

I have been using box 1. I see what you are saying about using box 3 though. That is the only thing about these types of threads. The percentages can vary wildly depending on the numbers used. I wish there was a standard so we could truly compare apples to apples.

[555]

"Not sure how everyone calculates their percentages but I take the total amount saved (pre and post tax) and divide it by our W-2's. Calculating it this way gave us about 42% savings rate for 2012."

"Which Box of the W2 do you use? Box 1 usually excludes pre tax 401k contributions and health insurance premiums and other pre tax deductions. If so you are calculating as fraction of net income. If you use Box 3 that is likely to be closer to your gross income.
I calculate everything as a fraction of gross income. To the gross income I add any employer 401k contributions."

"I have been using box 1. I see what you are saying about using box 3 though. That is the only thing about these types of threads. The percentages can vary wildly depending on the numbers used. I wish there was a standard so we could truly compare apples to apples."

My W2 represents essentially all my income, but if I used Box 1, I'd get about 165%

[rr2]

I have been using box 1. I see what you are saying about using box 3 though. That is the only thing about these types of threads. The percentages can vary wildly depending on the numbers used. I wish there was a standard so we could truly compare apples to apples.

Economists use Disposable Personal Income (DPI) which is defined as Personal Income minus Personal Taxes. The Savings rate is then determined as a fraction of DPI.

See: http://www.bea.gov/about/pdf/Alternativ ... 121404.pdf

[ragabnh]

Age 56 save around 67% of Gross, will retire in 1.5 years at almost 58.

[KWu]

In most years, I save between 20 and 25% of gross income. In the years that I'm deployed, closer to 80% of gross income. Got to have a little left over to play with when I get back home.

[Wooderson]

~36% in 2012. Anticipating 45% in 2013 due to less income.

[Garco]

This isn't straightfoward to answer. My "saving" is divisible into two main components.

(1) I've invested about 15% of my gross, pre-tax income for 35 years, in my workplace 401K's. In addition, in the last 10 years, I've invested an additional approximately 5% of my gross income in other tax advantaged vehicles (about 10% the last two years -- so total invested is about 25% of my gross now). Combined, despite several rough episodes in the market, my 401K's have me set for retirement in a few years.

(2) In addition to this I saved about 5% of my gross income to pay for my kids' college educations -- but this money was spent out, and after the kids finished college I diverted the savings into tax advantaged investments (mentioned above).

I could add to this that I've paid off my home mortgage, and so I could count my house as another significant investment. And if you want to get even fancier in the calculation, you could say that the money that I paid into Social Security has been a pretty darn good investment in a lifetime COLA annuity that I will soon activate. Not everybody automatically contributes to SS, btw. My brother, who had a great job for many years working at a special federal facility, has a very fine COLA defined benefit plan, but he did not pay into SS.

[stoptothink]

Wow. I think some of yall just get paid too much.

Trust me, I don't -- I'm below median for my town. I knew I would never be able to afford a home in the SF Bay Area so I have no mortgage and no money to buy one outright but have healthy retirement accounts. But while I may have a nice amount in a 401(k)/Roth IRA I may be backing myself into a corner if I want to buy elsewhere. I believe I will ultimately move to a lower cost area in retirement where homes are affordable. But all my money will be tied up in those retirement accounts, so I'm not sure how to go about buying. This has me wondering and questioning.

In the same boat. I took a significant pay cut to move to move the end of last year, had to do it because of a life changing event. Now maxing out my 401k, Roth, and HSA (I include this considering I haven't spent a penny on healthcare outside of premiums in about 8yrs) is nearly 40% of my net income; you can do the math. Last year I was able to put around 60% towards retirement. Until I start a family a home isn't even a remote possibility, but I have become very accustomed to living with several roommates and it helps me keep up the savings.

[Sbashore]

I'm retired now but my last year of work I saved 39% of gross household income. That was 2005.

[260chrisb]

For me it's not about the percentage as I'm furtunate to be able to save the maximum available in a 401K and a Roth.

[Toons]

When I was aggressively pursuing saving and investing for retirement I set a goal of 35-40%.

[kamo]

Wow. I think some of yall just get paid too much.

Trust me, I don't -- I'm below median for my town. I knew I would never be able to afford a home in the SF Bay Area so I have no mortgage and no money to buy one outright but have healthy retirement accounts. But while I may have a nice amount in a 401(k)/Roth IRA I may be backing myself into a corner if I want to buy elsewhere. I believe I will ultimately move to a lower cost area in retirement where homes are affordable. But all my money will be tied up in those retirement accounts, so I'm not sure how to go about buying. This has me wondering and questioning.

Keep renting. Unless there are non-financial reasons you wish to own a home.

[jon-nyc]

Haven't computed it exactly yet but I tend to split 3 ways: 1/3 for the tax man, 1/3 for saving, 1/3 for expenses.

[crowd79]

Wow. I think some of yall just get paid too much.

Trust me, I don't -- I'm below median for my town. I knew I would never be able to afford a home in the SF Bay Area so I have no mortgage and no money to buy one outright but have healthy retirement accounts. But while I may have a nice amount in a 401(k)/Roth IRA I may be backing myself into a corner if I want to buy elsewhere. I believe I will ultimately move to a lower cost area in retirement where homes are affordable. But all my money will be tied up in those retirement accounts, so I'm not sure how to go about buying. This has me wondering and questioning.

Keep renting. Unless there are non-financial reasons you wish to own a home.

By the looks of it, I know I'll keep renting since after doing various home vs rent calculators, I very well could do better renting long term if I invest the extra costs, mortgage interest, insurance, and upkeep of a home into my retirement accounts instead, and free from the stress and responsibilities of ever owning and being tied down to a house.

[CJOttawa]

Mid-late 30's here, started late. Finally nixed the student loan a bit over a year ago.

As percentages of gross income:
~13% forced savings via employer pension plan contributions.
~25% personal self-managed savings.

That's a little over 50% of my after tax income saved.

No kids, no mortgage, spouse also works and manages her own savings.

[Random Musings]

28% of gross income and about 42% of after-tax income.

To get to these levels (for a lot of people on this board), it typically means you are not keeping up with the Jones's in everything.

RM

[kamo]

21% in 2012. 20-25% is our happy zone where we feel we're saving enough for retirement and spending enough today.

[skylar]

By the looks of it, I know I'll keep renting since after doing various home vs rent calculators, I very well could do better renting long term if I invest the extra costs, mortgage interest, insurance, and upkeep of a home into my retirement accounts instead, and free from the stress and responsibilities of ever owning and being tied down to a house.

I'm in the same boat. The way I look at it is that even if owning house makes financial sense, it's still a lot of work and a general pain in the butt. If owning doesn't even make financial sense, what exactly is the point of owning?

That reminds me - the dryer is acting up again. Better call the landlady.

[yeledbed]

Around 40-50%, age 33. I max my 401(k) and back door Roth and throw another $30-40k in taxable. My goal is to at least semi-retire by 45. Having no kids and relatively cheap rent (in a high cost area with high salaries) makes this easier for me than others. The key is I've always saved my raises instead of increasing my standard of living.

[mcblum]

This is strange, I am retired and also have a full time job. I am investing about 100% of my salary take home and living off my pension.
Marty

[peppers]

About 40% The wife and government take the rest.
@ hoppy08520 Re: coffee grounds, That's not sacrifice, that's efficiency.

[StillTired]

Depending on if you consider employer matching (and the subsequent increase in salary) we save from 20-24% for retirement.

We're in our mid 30s and fully paid off our home this year. The "extra" percentages had been going towards that (paid off in 11 years). Now, for the next few years we're saving for some home remodelling (around 9% of income). In 3.5 years our first child will enter college and that 9% of income will be redirected towards college expenses for her. Four years after that our second child will be ready for college and that money will then go to him (hopefully she'll be done). THEN we'll have several years to beef up retirement savings until it's time for number 3 (not yet born) to go to college!

We've been saving a minimum of 15% since our mid-20s. The "extra" at that time was saving for our home downpayment. We upped the percent when we hit 30 by adding Roths into the mix. As a single income family, I *wish* we had extra space for tax advantages retirement savings!

[Hub]

Only the bogleheads could make me feel uneasy with my mere 24% of gross retirement savings rate! Early 30's.

I'm not yet maxing all available tax advantaged space, though once I do, I honestly think that will be plenty. Running the numbers I feel comfortable that 25 more years of my exact same savings amount will be sufficient for an early retirement.

[crowd79]

Only the bogleheads could make me feel uneasy with my mere 24% of gross retirement savings rate! Early 30's.

I'm not yet maxing all available tax advantaged space, though once I do, I honestly think that will be plenty. Running the numbers I feel comfortable that 25 more years of my exact same savings amount will be sufficient for an early retirement.

No worries, you're doing far better compared to the sad truth of the majority in this country:

http://www.dailyfinance.com/2012/10/15/17-frightening-facts-about-retirement-savings-in-/

Feel better?

[sls239]

Just over 20%. But we've done it since we got out of college.

[fkampere]

45% gross without including company match so another 7%

[Hub]

No worries, you're doing far better compared to the sad truth of the majority in this country:

http://www.dailyfinance.com/2012/10/15/17-frightening-facts-about-retirement-savings-in-/

Feel better?

No!

[555]

"No worries, you're doing far better compared to the sad truth of the majority in this country:

http://www.dailyfinance.com/2012/10/15/17-frightening-facts-about-retirement-savings-in-/

Feel better? "

I'm now less concerned about inflation.

[Norton750]

Over the past 25 years (raising two kids) we've averaged 22% of gross earned income and 31% of net earned income saved for retirement.

More recently (mortgage paid off, empty nest) we've averaged 46% of gross and 60% of net.

We live well within our means (obviously) but the saving has not been burdensome. We had a custom house built 30 years ago, we buy new cars (with cash, and drive them forever), we put one kid through private high school and both kids through private college, etc. But in many ways our tastes are fairly simple and we have never worried about keeping up with the Joneses.

FWIW: I add all of our earned income (including 401k contributions) to calculate our gross earned income. Then subtract Federal, State, FICA and Medicare taxes to get net earned income. Income taxes have averaged 30% over the 25 years. I don't include employer match in any calculations.

[mgcfo]

About 26% to retirement accounts
About 7% to after-tax accounts I'll never touch till after retirement

[SC Hoosier]

Wow. I am so impressed with all the saving going on here. And to know that it is being invested as Mr. Bogle would is great. I wish these numbers were more prevalent in society today.

I am at 44.44%. Exciting stuff.

SC Hoosier

[dad2000]

About 25% of net.

Still raising three grade school kids, but just finished paying off the house and funding the 529s.

Plan to save 60% of net going forward, and hopefully retire in 10 years.

[Paul78]

24 yo

6.2% ss
1.45% medicare
.8% pension plan
.003% life insurance
12.9% federal tax
4.5% state tax

15.6% rent
2.6% (cable/internet utilities)
3.3% food
2.8% gas/car insurance

14.35% miscellaneous (entertainment/vacation/car repairs ect)

19.4% tsp
6.1% ira
10% checking account

10k raise next year. Decent % will go towards health insurance (still under parents for the rest of the year) rest will go into checking account.

then I will get a 1k raise every other year. That will again go into the checking account.

If checking account ever gets too big I will increase my investments. But it is only 20k at the moment and it will be used for multiple things
- buying a car in the next year or two (15-20k)
- a second car (8-10 years away 20-25k)
-down payment for a house (100k will be 5-10 years away)
-emergency fund (50k)
-grad school (30k)

thus it is probably 13-15 years before I will start investing in retirement funds (besides the current 17.5k a year in tsp and 5.5k in ira).

[radchad3]

Thought I would repost with my more accurate figures:

% of full gross income including retirement funding and passive income: 33.94%
% of net (after taxes): about 46%

[floydtime]

51.4% last year with some capital improvement costs.
75.7% this year barring anything unexpected.