How much did you save?

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mikejuss
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How much did you save?

Post by mikejuss »

A question for the Bogleheads here who have had the good luck of reaching the two-comma club: roughly how much did you save each year?

I assume you maxed out the tax-advantaged accounts to which you had access (eg, a 401(k), an IRA, etc.), and selected index funds for your stock and bond allocations, but how much extra money did you put into a brokerage account (or any other nonqualified account)? I understand that portfolio growth will vary greatly depending on risk tolerance, market returns over specific periods of time, and investing horizon, but I'm curious about what it took for you to win the game.
Last edited by mikejuss on Tue Aug 18, 2020 11:32 am, edited 3 times in total.
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arcticpineapplecorp.
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Re: How much did you save?

Post by arcticpineapplecorp. »

not there yet, but it doesn't take much if you earn 8% per year investing $300 a month from age 25-65 (40 years):

=FV(.08/12,480,-300)

gives you $1,047,302.35

source: https://www.kitces.com/blog/is-save-for ... nt-advice/

makes you wonder why more people don't:
1. start early
2. save
3. take risk
4. stay the course

perhaps they just don't know how much $300 a month invested in stocks for 40 years can be worth.

(yes, in inflation adjusted dollars a million will be worth much less than now, which only means people should be saving more. perhaps that's why they give up. spending is more fun than saving). not gonna be much fun without money later in life. but that's so later, people live for today. guess i answered my own question).
Last edited by arcticpineapplecorp. on Tue Aug 18, 2020 11:28 am, edited 1 time in total.
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MathWizard
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Re: How much did you save?

Post by MathWizard »

Unless just in the last year, I did not use a brokerage account for retirement.
There is plenty of room in tax advantaged if you have a 401k or 403b or equivalent.

For me, I saved 15% of my salary every year since 1989 plus maxing Roth IRAs
for my wife and I since 1999. (starting with a 32K salary in 1989 with mostly
inflationary raises until 2016).

I have been maxing my 403b since 2016, when I got a large bump in salary.

My wife did not put money into tax-deferred until 2016 when I ran out of room in
tax advantaged.

We are well into two comma territory after 31 years. Time in the market benefited me,
even during the lost decade of the 2000's. I was 100% stock for most of this time.
Last edited by MathWizard on Tue Aug 18, 2020 1:12 pm, edited 1 time in total.
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mhc
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Re: How much did you save?

Post by mhc »

The amount I have saved each year has varied quite a bit. I believe when I started work out of college I put 10-15% of my pay into my 401k. There was also profit sharing and matching going into the 401k.

I have always tried to have my standard of living grow more slowly than my pay. This has allowed me to save a larger percentage over time. This is a very key point. Live below your means.

There has also been some windfall years when I saved a lot. I have been through two acquisitions. This has produced some decent chunks of money that I could add to my retirement accounts.

Life is not smooth. Save when you can. Try to make wise decisions along the way, and learn from your mistakes. We all have made plenty of mistakes.
mak1277
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Re: How much did you save?

Post by mak1277 »

I did very little saving in my early career, and didn't have a penny in my 401k at the age of 30 (net worth at that point was < $100k). I didn't max out my 401k savings for another 5 or 6 years after that. We made hay as DINKS in our early- and mid-30s, both with 6 figure incomes (net worth at that point was ~$1 million). We *really* made hay when I started getting significant equity awards starting in my late 30s/early 40s. We've always lived below our means, but never consciously saved a certain amount. Always lived the life we desired...just so happens that has meant socking away a good deal of $$.
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marti038
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Re: How much did you save?

Post by marti038 »

We saved 15%+ of our income each year since 2006. DW worked part time or not at all for some of this, so some years were better than others. We have maxed out our Roth's every year and only contributed to 401k's up to the match. This is the first year we won't be eligible to contribute to the Roth IRA due to income. We are maxing out the HSA now.

We've been 100% stocks (mostly in mutual funds) just about the whole time. Got our 2nd comma just a couple of weeks ago.

FWIW, we've never felt the need to contribute more than 15% each year to reach our goals, but we will likely increase our 401k saving now to take advantage of the tax savings.
retired@50
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Re: How much did you save?

Post by retired@50 »

mikejuss wrote: Tue Aug 18, 2020 11:20 am A question for the Bogleheads here who have had the good luck of reaching the two-comma club: roughly how much did you save each year?
I wound up with my taxable account being my largest account. This happened because after putting the maximum into 401k and Roth IRA (whenever possible) I'd put all the "extra" into my taxable account. When I had a high-earning year, my taxable account would see large additions.

I guess the real trick, at least for me, was to keep living expenses under control. My income was somewhat erratic over the years, but my monthly spending barely moved. Some years I saved over 50% of my income, some years it might have been 10%.

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aristotelian
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Re: How much did you save?

Post by aristotelian »

My max employer match with my contribution amounts to 15% so I started with that (plus our mortgage principal payments, if you count those). As my career went on, I tried to apply raises to savings rather than lifestyle inflation. Right now our savings rate is in the 50%-60% range.
stoptothink
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Re: How much did you save?

Post by stoptothink »

mak1277 wrote: Tue Aug 18, 2020 12:12 pm I did very little saving in my early career, and didn't have a penny in my 401k at the age of 30 (net worth at that point was < $100k).
Due to "life", when we met (I was 31, she was 26) our combined net worth was ~$150k (wife's contribution was negative). I had actually saved a significant percentage of my income since I was 15, but not in retirement funds, so after cash-flowing ex's undergrad, dental school, speculative real estate investing prior to the crash, and then the divorce I had little to show for it. We've saved >45%+ of gross income each of the last 7yrs, which was as little as $35k/yr when we first met and is now >$100k/yr. We should hit the two-comma club in investments in the next 12 months (already over with home equity) and the savings rate is just going up because in the last few months we've gotten rid of our 3 largest reoccurring expenses (mortgage, wife's college tuition, and childcare).
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HomerJ
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Re: How much did you save?

Post by HomerJ »

Here's what I suggest... Save half your raises. It won't take long to be saving a ton.

If you're making $50,000 a year and saving $5000 a year (10%), then you get a big promotion or change jobs and start making $60,000, save half of that raise.

Now you're saving $10,000 a year on $60,000 (16%), but your spending still went up $5000 a year too... so your lifestyle is increasing too.

Too many people get a raise from $50,000 to $60,000 and keep their savings rate the same (10%). That's measly $1000 a year more in savings ($5000 to $6000), and then they spend the extra $9000.

Hard to build wealth that way.

At some point, if you're really lucky, you'll realize that you don't need to increase your lifestyle any more, and most of the raises after that can go into savings. For us, when we hit $100,000 or so, we realized we didn't need a bigger house or better cars. We spent a bit more on vacations as our salaries went up, but after $100,000, almost all raises went into savings or paying off the house.

If you have two people working in a family, this is not that hard. Two people making over $50,000 a year each through their 30s and 40s, isn't uncommon. It's not the majority of households, but it's still a solid percentage. And $100,000 was just MY cut-off. Obviously one can have a good lifestyle much lower, and save all raises beyond THAT personal cut-off point.

With 401k matches, and stock market increases, a couple like I described above can save a million in 15-20 years fairly painlessly.
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GMT-8
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Re: How much did you save?

Post by GMT-8 »

I had no rational plan - just saved as much as I could and kept my spending to a minimum. I started an IRA from the git-go in 1974 and had put in about $10k from miscellaneous non-benefit jobs before taking my first real position in 1979. It came with a pension so I couldn't contribute to the IRA anymore. After I left in 1996 they eased me out of the corporate pension scheme and I rolled the money over to my IRA. For the last 25 years that money has been in VG low-cost funds.

I was a consultant for about 8 years with erratic earnings, so put in my SEP-IRA whatever my tax man told me I could. Then I got another full-time job with a moderate salary, a 401(k) and some profit-sharing. In all my career I never grossed much more than $100k a year but we didn't spend a great deal. We did travel a lot in the summer, when my wife was off from teaching. We hit almost 50 countries overall.

Along the way we paid off our house as quickly as we could ~ 20 years. Market value has tripled from the original purchase price but that just matches the sum of the payments (original loan was 9%). Our investments have done better. As HomerJ said, a couple working hard can achieve two commas fairly painlessly.

Here's my Vanguard balance over the last 10 years. The big bump near the front is my 401(k) rolling in when I retired for good at 60.

Image

As far as taxable savings, I aimed for $500k by about age 50 so I could have a cushion before hitting the retirement accounts. I got it there but haven't spent it. Half was in stock funds and half in tax-exempt bonds. Each year I give a chunk of the appreciated stock to a Donor Advised Fund so I don't have to pay taxes on it.

Now I wish I had created a Roth but hey, things could be much worse than having too much in retirement accounts. I recommend staying married to a wife with inexpensive tastes, and not buying too many houses or a boat. 8-)
Last edited by GMT-8 on Tue Aug 18, 2020 5:06 pm, edited 5 times in total.
britcoal
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Re: How much did you save?

Post by britcoal »

I started in 2001 out of college with the Roth IRA ($2000 limit in 2001) and ~$5500 in my 401k and ~$1200 profit sharing on a ~$37k salary (so ~23%).

I have always maxed out the Roth IRA. I don't remember when I was able to max out the 401k but at the very latest it was in 2008 when I changed jobs and got a very decent bump in salary.

At this point I am maxing the Roth IRA, 401k, family HSA, and probably $16k~$22k in taxable. Just above 40% of gross (including small rental income and small side hustle).
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mikejuss
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Re: How much did you save?

Post by mikejuss »

A parenthetical: how are you calculating the percentage of your salary saved each year? For example, if one makes $100,000 a year, one might save 19.5% (or $19,500) of one's gross income in a 401(k). If one's aim is a savings rate of 50%, is the other 30.5% calculated based on your gross income (ie, 30.5% of $100,000, or $30,500) or net income (ie, 30.5% of $100,000 minus taxes)?

It seems like it would be difficult to save fully $50,000 of $100,000, and to also pay taxes on that $100,000. But I may not be thinking about this correctly.
mak1277
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Re: How much did you save?

Post by mak1277 »

mikejuss wrote: Tue Aug 18, 2020 2:01 pm A parenthetical: how are you calculating the percentage of your salary saved each year? For example, if one makes $100,000 a year, one might save 19.5% (or $19,500) of one's gross income in a 401(k). If one's aim is a savings rate of 50%, is the other 30.5% calculated based on your gross income (ie, 30.5% of $100,000, or $30,500) or net income (ie, 30.5% of $100,000 minus taxes)?

It seems like it would be difficult to save fully $50,000 of $100,000, and to also pay taxes on that $100,000. But I may not be thinking about this correctly.
I've never thought to actually calculate it because, honestly, it's not an important number to me. I live the way I want to live, then save what's leftover. Saving first is, to me, backwards.
britcoal
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Re: How much did you save?

Post by britcoal »

I'm quoting gross percentages as it just seems easier that way.. I don't know off-hand what I paid in taxes, fica, etc, etc. I could figure it out but why bother? Plus, if I quoted net take-home percentages after taxes I'd be making my savings look far better than they are possibly allowing me to justify more spending and less savings!!
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marti038
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Re: How much did you save?

Post by marti038 »

mikejuss wrote: Tue Aug 18, 2020 2:01 pm A parenthetical: how are you calculating the percentage of your salary saved each year? For example, if one makes $100,000 a year, one might save 19.5% (or $19,500) of one's gross income in a 401(k). If one's aim is a savings rate of 50%, is the other 30.5% calculated based on your gross income (ie, 30.5% of $100,000, or $30,500) or net income (ie, 30.5% of $100,000 minus taxes)?

It seems like it would be difficult to save fully $50,000 of $100,000, and to also pay taxes on that $100,000. But I may not be thinking about this correctly.
Mine is based on gross.
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mikejuss
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Re: How much did you save?

Post by mikejuss »

marti038 wrote: Tue Aug 18, 2020 2:11 pm
mikejuss wrote: Tue Aug 18, 2020 2:01 pm A parenthetical: how are you calculating the percentage of your salary saved each year? For example, if one makes $100,000 a year, one might save 19.5% (or $19,500) of one's gross income in a 401(k). If one's aim is a savings rate of 50%, is the other 30.5% calculated based on your gross income (ie, 30.5% of $100,000, or $30,500) or net income (ie, 30.5% of $100,000 minus taxes)?

It seems like it would be difficult to save fully $50,000 of $100,000, and to also pay taxes on that $100,000. But I may not be thinking about this correctly.
Mine is based on gross.
So to be very clear: if you made $100,000 gross and wanted to save 50%, you saved $50,000, not 50% of what you made after taxes (eg, 50% of $75,000)?
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meowcat
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Re: How much did you save?

Post by meowcat »

We haven't reached that number but I think it helps tremendously to hear others' savings strategy. I'm 57 years old, my Wife, 55. I've been saving in a 401(k) since I was 23, although, I never really saved enough. I started at 3%. I think the highest I went when I was younger was 6%, but I never stopped saving. When I met my now, Wife, 25 years ago, she also contributed about 5%. We did that until we bought too much house and had to drop our contributions to just 3% to survive. 4 years ago, we sold said house and have been contributing 20% of our gross income. In that 4 years our net worth has literally skyrocketed. It's important to note that we never stopped saving because as of today, we have about $715k in investable assets. I know this is cutting it close at our age but we're tracking just fine.
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deikel
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Re: How much did you save?

Post by deikel »

mikejuss wrote: Tue Aug 18, 2020 11:20 am A question for the Bogleheads here who have had the good luck of reaching the two-comma club: roughly how much did you save each year?

I assume you maxed out the tax-advantaged accounts to which you had access (eg, a 401(k), an IRA, etc.), and selected index funds for your stock and bond allocations, but how much extra money did you put into a brokerage account (or any other nonqualified account)? I understand that portfolio growth will vary greatly depending on risk tolerance, market returns over specific periods of time, and investing horizon, but I'm curious about what it took for you to win the game.
With that type of assumptions you actually don't really need to calculate a 'savings rate'. If you assume married status and your above, then you add about 50k a year to your accounts (2x 19k plus matches and 2x 5.5k. After 10 years your portfolio has 500k in it (broad brush here) and market return gives you roughly also 50k a year going forward. So the next doubling only takes you 5 years. You should have 1 million after 15 years if you are able to max out your tax advantaged spaces - probably a bit earlier, no extra money needed.

Now, ignore that most people do not do that because they can not, but that was not your question.
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Streptococcus
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Re: How much did you save?

Post by Streptococcus »

I saved 40-60% for 7 years, hit 2 commas after 5 years.
I calculate it based on gross. Made it simple.
Getting into the math details was not worth my time.

If I made 100K a year, I set my goal to save 45-60K a year and stay within that range,
When I was closer to 60 I was really happy. 45, was satisfactory. Less than that was not an option. I was ready to make all the cuts necessary to stay within 45-60, even sell cars, for instance.

We moved from a MCOLA to a HCOLA and to meet our yearly number, we had to sell our 2 cars and downgrade. We needed to drive more, so we needed cars with better mileage. We sold our newer cars, both used ones, Ended up with 15K that went into the yearly saving target. DW is even more frugal than me so it worked out.

In brief, no need to make it complicated. Set a yearly saving target range. Also, there are many ways to cut your expenses and stay within your saving range, if you are creative. But the most Important part is having a partner on board.

Finally, I never counted the employer match which after several years exceeded 6 figures.
Last edited by Streptococcus on Tue Aug 18, 2020 2:58 pm, edited 2 times in total.
tesuzuki2002
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Re: How much did you save?

Post by tesuzuki2002 »

Is hitting the 2 comma club considered winning? I'm honestly not sure.

My investing career began in 2006 when I graduated college... I followed the norms at the time save up to the Match or 10% and you will be good to go... Fast forward to the 2008 crash... I saw a lot of things go down on paper.. but just keep with it... In 2010 I became more serious about protecting my own finances... and started investing more. It's hard to say exactly how much... By 2014 I was Maxing out out tax advantaged accounts.. and doing what I could extra in a brokerage account.

All in; my gut feel would be 20-25% on average. I started making out and making deliberate actions to invest extra cash I had sitting in the bank that I wasn't spending... My spending slowed as I saw real investing progress... I could see most dual income couples who can max out 401K and IRA should get there in a average of 14 years? If you can do additional savings in brokerage you will get there sooner.

My 2 comma club initiation came in Jan 2018.

My investments have seems to not gain much ground over the last 2 years... I'm around $1.2M currently.. I'm hoping for more traction on dividends and so forth to see some exponential growth...
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PaddyMac
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Re: How much did you save?

Post by PaddyMac »

Being self-employed, we had good years and not so good years, but we always were encouraged by our CPA to max out our SEP-IRAs when April rolled around. So that would have been 20% of our net profit, each. It didn't seem that much at the time.

We didn't seriously start saving until our late forties, but were lucky that it was 2009 and stocks were cheap for a bit. I figured out how to start a 401k for us, and we managed to save half our income for a few years and could basically retire early. Much of that was good timing and a combo of hard luck & good luck. We still made lots of mistakes (not using a Roth IRA when we could, and missing out on a 401k for a couple of years and paying gobs of taxes).

We are still working at our encore careers now. We're no longer saving anything except for our HSA (although we may need to save into our 401k this year to keep under the ACA subsidy cliff). We could be living the good life if we decided to forego the subsidy, but then there is nowhere to go...!
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HomerJ
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Re: How much did you save?

Post by HomerJ »

mikejuss wrote: Tue Aug 18, 2020 2:01 pm A parenthetical: how are you calculating the percentage of your salary saved each year? For example, if one makes $100,000 a year, one might save 19.5% (or $19,500) of one's gross income in a 401(k). If one's aim is a savings rate of 50%, is the other 30.5% calculated based on your gross income (ie, 30.5% of $100,000, or $30,500) or net income (ie, 30.5% of $100,000 minus taxes)?

It seems like it would be difficult to save fully $50,000 of $100,000, and to also pay taxes on that $100,000. But I may not be thinking about this correctly.
No one is that exact.

When someone says they save 50%, it's probably calculated on 50% of take-home pay (but 401k money is gross, and people may or may not count the 401k match)

The answer you want is save a good chunk (you can start at 5% or 10%, but slowly increase it to 15% or 20% or 30% or more as you get older).

Live below your means.

We all save at different rates at different times in our lives. I save more now that my house is paid off. There's no one easy life-long percentage or amount to answer your question easily.
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JoeRetire
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Re: How much did you save?

Post by JoeRetire »

mikejuss wrote: Tue Aug 18, 2020 11:20 am A question for the Bogleheads here who have had the good luck of reaching the two-comma club: roughly how much did you save each year?
We saved as much as we could.

The specific number is unimportant, and would be different for everyone.
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marti038
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Re: How much did you save?

Post by marti038 »

mikejuss wrote: Tue Aug 18, 2020 2:17 pm
marti038 wrote: Tue Aug 18, 2020 2:11 pm
mikejuss wrote: Tue Aug 18, 2020 2:01 pm A parenthetical: how are you calculating the percentage of your salary saved each year? For example, if one makes $100,000 a year, one might save 19.5% (or $19,500) of one's gross income in a 401(k). If one's aim is a savings rate of 50%, is the other 30.5% calculated based on your gross income (ie, 30.5% of $100,000, or $30,500) or net income (ie, 30.5% of $100,000 minus taxes)?

It seems like it would be difficult to save fully $50,000 of $100,000, and to also pay taxes on that $100,000. But I may not be thinking about this correctly.
Mine is based on gross.
So to be very clear: if you made $100,000 gross and wanted to save 50%, you saved $50,000, not 50% of what you made after taxes (eg, 50% of $75,000)?
Yup.
delamer
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Re: How much did you save?

Post by delamer »

You assume wrong, at least in our case. :D We never maxed out our contributions.

I calculated that we averaged savings 9% of gross for retirement, including matches, over the course of our worklives.

A couple that made half of what we did would need to save 18% of gross to reach the same amount. A couple that made twice as much would only need to save 4.5%. (Assuming the same rate of return and time horizon.)

And if you want to reach the 7-figure club at age 45 instead of in your late 50’s, then that requires a whole different savings rate.

My point being that if you have a goal of savings $1 million by age X, then assume a rate of return, plug it all into a formula and you’ll have the answer as to how much YOU need to save.
Last edited by delamer on Tue Aug 18, 2020 3:28 pm, edited 1 time in total.
loukycpa
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Re: How much did you save?

Post by loukycpa »

In my 20s and 30s we generally only one of us was working full time. I was not yet a partner in my firm. Generally 20% to 30% savings rate on average. We paid off home mortgage during this period.

My earnings have increased significantly during my 40s and my wife went back to full time work also. Savings rate has climbed to more than 50% as income has increased more than lifestyle. Two commas happened sometime in 2017 (44 yo). Goal is FI before 50.
jarjarM
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Re: How much did you save?

Post by jarjarM »

Dual income in VHCOL, 30-50+% gross saving rate. But I think it's very much so dependent on individual circumstance. A dual income techies looking to retire ASAP will need a very gross saving rate than a single income teacher planning on working to retirement and has an expected pension.
JeepDaze
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Re: How much did you save?

Post by JeepDaze »

For the past several years, 30% of gross salary into taxable after maxing out 401k and Roth IRA.
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Re: How much did you save?

Post by flaccidsteele »

mikejuss wrote: Tue Aug 18, 2020 11:20 am A question for the Bogleheads here who have had the good luck of reaching the two-comma club: roughly how much did you save each year?

I assume you maxed out the tax-advantaged accounts to which you had access (eg, a 401(k), an IRA, etc.), and selected index funds for your stock and bond allocations, but how much extra money did you put into a brokerage account (or any other nonqualified account)?
This is an interesting question

I’m not sure how much I stored above and beyond tax advantaged accounts...

Each year I probably had as much stored outside of those accounts as I had contributed into them
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celia
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Re: How much did you save?

Post by celia »

mikejuss wrote: Tue Aug 18, 2020 11:20 am A question for the Bogleheads here who have had the good luck of reaching the two-comma club: roughly how much did you save each year?

I assume you maxed out the tax-advantaged accounts to which you had access (eg, a 401(k), an IRA, etc.), and selected index funds for your stock and bond allocations, ....
We didn't do much of this. Bogleheads was not around when we started investing 40+ years ago. We just saved sporadically when we could, some years spending down some savings (out of work, new baby, kids in college). We're retired now and the way we made it is by just letting things grow.

And you don't need a million $$$ to retire. We retired when our expenses dropped and we no longer had a mortgage, kids in college, and retirement accounts had "enough". Those were the 3 largest expenses while working and maybe 2/3 of our budget when working. Now, our biggest expense is taxes.
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Re: How much did you save?

Post by jbmitt »

stoptothink wrote: Tue Aug 18, 2020 1:07 pm
mak1277 wrote: Tue Aug 18, 2020 12:12 pm I did very little saving in my early career, and didn't have a penny in my 401k at the age of 30 (net worth at that point was < $100k).
Due to "life", when we met (I was 31, she was 26) our combined net worth was ~$150k (wife's contribution was negative). I had actually saved a significant percentage of my income since I was 15, but not in retirement funds, so after cash-flowing ex's undergrad, dental school, speculative real estate investing prior to the crash, and then the divorce I had little to show for it. We've saved >45%+ of gross income each of the last 7yrs, which was as little as $35k/yr when we first met and is now >$100k/yr. We should hit the two-comma club in investments in the next 12 months (already over with home equity) and the savings rate is just going up because in the last few months we've gotten rid of our 3 largest reoccurring expenses (mortgage, wife's college tuition, and childcare).
Glad you've recovered financially. Did you know you've talked about paying for your ex's dental school 147 times in your posting history? A lot of us have student loan debt/medical school debt and it's no fun. I'd rather be happy and behind in my investment goals than to be miserable everyday and have met my investment goals.

We started with around $250k in student loans in 2015, added another $25k in 2018/2019 and have it down to $75k at a low interest rate. We've kept it because of a student loan reimbursement from an employer. I anticipate we will hit our first 7 figures within the next year and a half. That's with one of us staying home with a baby.
GlacierRunner
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Re: How much did you save?

Post by GlacierRunner »

Between 40 and 50% gross. We are dual income and banked one of the incomes.
PerfecTiming
Posts: 12
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Re: How much did you save?

Post by PerfecTiming »

jbmitt wrote: Tue Aug 18, 2020 4:10 pm
stoptothink wrote: Tue Aug 18, 2020 1:07 pm
mak1277 wrote: Tue Aug 18, 2020 12:12 pm I did very little saving in my early career, and didn't have a penny in my 401k at the age of 30 (net worth at that point was < $100k).
Due to "life", when we met (I was 31, she was 26) our combined net worth was ~$150k (wife's contribution was negative). I had actually saved a significant percentage of my income since I was 15, but not in retirement funds, so after cash-flowing ex's undergrad, dental school, speculative real estate investing prior to the crash, and then the divorce I had little to show for it. We've saved >45%+ of gross income each of the last 7yrs, which was as little as $35k/yr when we first met and is now >$100k/yr. We should hit the two-comma club in investments in the next 12 months (already over with home equity) and the savings rate is just going up because in the last few months we've gotten rid of our 3 largest reoccurring expenses (mortgage, wife's college tuition, and childcare).
Glad you've recovered financially. Did you know you've talked about paying for your ex's dental school 147 times in your posting history? A lot of us have student loan debt/medical school debt and it's no fun. I'd rather be happy and behind in my investment goals than to be miserable everyday and have met my investment goals.

We started with around $250k in student loans in 2015, added another $25k in 2018/2019 and have it down to $75k at a low interest rate. We've kept it because of a student loan reimbursement from an employer. I anticipate we will hit our first 7 figures within the next year and a half. That's with one of us staying home with a baby.
Lol.
PerfecTiming
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Re: How much did you save?

Post by PerfecTiming »

I am saving ~40% of gross income as of today, not yet at two commas.
Jags4186
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Re: How much did you save?

Post by Jags4186 »

mikejuss wrote: Tue Aug 18, 2020 2:17 pm
marti038 wrote: Tue Aug 18, 2020 2:11 pm
mikejuss wrote: Tue Aug 18, 2020 2:01 pm A parenthetical: how are you calculating the percentage of your salary saved each year? For example, if one makes $100,000 a year, one might save 19.5% (or $19,500) of one's gross income in a 401(k). If one's aim is a savings rate of 50%, is the other 30.5% calculated based on your gross income (ie, 30.5% of $100,000, or $30,500) or net income (ie, 30.5% of $100,000 minus taxes)?

It seems like it would be difficult to save fully $50,000 of $100,000, and to also pay taxes on that $100,000. But I may not be thinking about this correctly.
Mine is based on gross.
So to be very clear: if you made $100,000 gross and wanted to save 50%, you saved $50,000, not 50% of what you made after taxes (eg, 50% of $75,000)?
Depending on your tax situation and state that isn’t that crazy to think about:

Married couple each making $50k, maxing 401k ($39,000) contributing $11k to IRAs, would leave them with roughly $36k-$40k take home pay. If they put $7200 into an HSA instead of $7200 into a 401k or IRA they’d avoid FICA taxes as well. Until my wife and I bought a home, we rented a small 1 bedroom apartment and our monthly expenses were about $3300.
stoptothink
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Re: How much did you save?

Post by stoptothink »

jbmitt wrote: Tue Aug 18, 2020 4:10 pm
stoptothink wrote: Tue Aug 18, 2020 1:07 pm
mak1277 wrote: Tue Aug 18, 2020 12:12 pm I did very little saving in my early career, and didn't have a penny in my 401k at the age of 30 (net worth at that point was < $100k).
Due to "life", when we met (I was 31, she was 26) our combined net worth was ~$150k (wife's contribution was negative). I had actually saved a significant percentage of my income since I was 15, but not in retirement funds, so after cash-flowing ex's undergrad, dental school, speculative real estate investing prior to the crash, and then the divorce I had little to show for it. We've saved >45%+ of gross income each of the last 7yrs, which was as little as $35k/yr when we first met and is now >$100k/yr. We should hit the two-comma club in investments in the next 12 months (already over with home equity) and the savings rate is just going up because in the last few months we've gotten rid of our 3 largest reoccurring expenses (mortgage, wife's college tuition, and childcare).
Glad you've recovered financially. Did you know you've talked about paying for your ex's dental school 147 times in your posting history? A lot of us have student loan debt/medical school debt and it's no fun. I'd rather be happy and behind in my investment goals than to be miserable everyday and have met my investment goals.
I also put myself through 11yrs of school - and the "forever wife" through undergrad - with absolutely zero help (which, looking at such threads as "did you get help from inheritance", seems to be a total anomaly here). "Investing" most of your life's savings in someone else's education, who never earns a penny while you are together, and then giving them half of the retirement you earned during that period was a hard pill to swallow for someone just beginning adulthood. Mentioning it isn't saying that I am miserable or even that I ever think of it, it is a reminder that I should be proud that I pulled myself up (in less than a decade) from something that destroys others permanently. But I appreciate the snarky judgement.
Last edited by stoptothink on Tue Aug 18, 2020 6:02 pm, edited 1 time in total.
jbmitt
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Re: How much did you save?

Post by jbmitt »

stoptothink wrote: Tue Aug 18, 2020 5:43 pm
jbmitt wrote: Tue Aug 18, 2020 4:10 pm
stoptothink wrote: Tue Aug 18, 2020 1:07 pm
mak1277 wrote: Tue Aug 18, 2020 12:12 pm I did very little saving in my early career, and didn't have a penny in my 401k at the age of 30 (net worth at that point was < $100k).
Due to "life", when we met (I was 31, she was 26) our combined net worth was ~$150k (wife's contribution was negative). I had actually saved a significant percentage of my income since I was 15, but not in retirement funds, so after cash-flowing ex's undergrad, dental school, speculative real estate investing prior to the crash, and then the divorce I had little to show for it. We've saved >45%+ of gross income each of the last 7yrs, which was as little as $35k/yr when we first met and is now >$100k/yr. We should hit the two-comma club in investments in the next 12 months (already over with home equity) and the savings rate is just going up because in the last few months we've gotten rid of our 3 largest reoccurring expenses (mortgage, wife's college tuition, and childcare).
Glad you've recovered financially. Did you know you've talked about paying for your ex's dental school 147 times in your posting history? A lot of us have student loan debt/medical school debt and it's no fun. I'd rather be happy and behind in my investment goals than to be miserable everyday and have met my investment goals.
I also put myself through 11yrs of school with absolutely zero help (which, looking at such threads as "did you get help from inheritance", seems to be a total anomaly here). "Investing" most of your life's savings in someone else's education, who never earns a penny while you are together, and then giving them half of the retirement you earned during that period was a hard pill to swallow for someone just beginning adulthood. Mentioning it isn't saying that I am miserable or even that I ever think of it (because it is literally never discussed except on this personal finance board, and I am happier than I ever thought possible now), it is a reminder that I should be proud that I pulled myself up (in less than a decade) from something that destroys others permanently. But thanks anyways for the snarky judgement.
The situation sucks, I get it. It put you in a hole and it drained your savings, I get it. We’re both just anonymous people on the internet, but I know that I’ve read that line multiple times. It’s a good lesson for others to consider when marrying and combining finances.
stoptothink
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Re: How much did you save?

Post by stoptothink »

jbmitt wrote: Tue Aug 18, 2020 6:00 pm
stoptothink wrote: Tue Aug 18, 2020 5:43 pm
jbmitt wrote: Tue Aug 18, 2020 4:10 pm
stoptothink wrote: Tue Aug 18, 2020 1:07 pm
mak1277 wrote: Tue Aug 18, 2020 12:12 pm I did very little saving in my early career, and didn't have a penny in my 401k at the age of 30 (net worth at that point was < $100k).
Due to "life", when we met (I was 31, she was 26) our combined net worth was ~$150k (wife's contribution was negative). I had actually saved a significant percentage of my income since I was 15, but not in retirement funds, so after cash-flowing ex's undergrad, dental school, speculative real estate investing prior to the crash, and then the divorce I had little to show for it. We've saved >45%+ of gross income each of the last 7yrs, which was as little as $35k/yr when we first met and is now >$100k/yr. We should hit the two-comma club in investments in the next 12 months (already over with home equity) and the savings rate is just going up because in the last few months we've gotten rid of our 3 largest reoccurring expenses (mortgage, wife's college tuition, and childcare).
Glad you've recovered financially. Did you know you've talked about paying for your ex's dental school 147 times in your posting history? A lot of us have student loan debt/medical school debt and it's no fun. I'd rather be happy and behind in my investment goals than to be miserable everyday and have met my investment goals.
I also put myself through 11yrs of school with absolutely zero help (which, looking at such threads as "did you get help from inheritance", seems to be a total anomaly here). "Investing" most of your life's savings in someone else's education, who never earns a penny while you are together, and then giving them half of the retirement you earned during that period was a hard pill to swallow for someone just beginning adulthood. Mentioning it isn't saying that I am miserable or even that I ever think of it (because it is literally never discussed except on this personal finance board, and I am happier than I ever thought possible now), it is a reminder that I should be proud that I pulled myself up (in less than a decade) from something that destroys others permanently. But thanks anyways for the snarky judgement.
The situation sucks, I get it. It put you in a hole and it drained your savings, I get it. We’re both just anonymous people on the internet, but I know that I’ve read that line multiple times. It’s a good lesson for others to consider when marrying and combining finances.
If it bugs you, there is a really simple solution: consider scrolling right past my posts. Would seem easier than being self-righteous to an anonymous stranger on the internet.
jsapiandante
Posts: 150
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Re: How much did you save?

Post by jsapiandante »

mikejuss wrote: Tue Aug 18, 2020 11:20 am A question for the Bogleheads here who have had the good luck of reaching the two-comma club: roughly how much did you save each year?

I assume you maxed out the tax-advantaged accounts to which you had access (eg, a 401(k), an IRA, etc.), and selected index funds for your stock and bond allocations, but how much extra money did you put into a brokerage account (or any other nonqualified account)? I understand that portfolio growth will vary greatly depending on risk tolerance, market returns over specific periods of time, and investing horizon, but I'm curious about what it took for you to win the game.
We aren't there yet, but hope to be there in the next 2-3 years. We started investing in 2013 after I paid off my student loans so most of our net worth is due to one of the longest bull market. At the time we had no more than $5k in our retirement vehicles. Since then, we've maxed out 401k (wife's employer including 5% match), Roth, and Simple IRA through my practice. We opened a taxable brokerage account in 2015 when we got married and we'd put anywhere from $24-60k per year depending on our spending for the year. Average annual savings rate is ~45-50% of gross pay which was about $90-100k per year after all things considered .Our AA is 75/25 currently. We hit $500k in investments/cash May 2019 and currently we are at $750k. When we started, I set an unattainable goal of achieving 1 mil when my wife turns 40 to push us into aggressive saving. It's looking like we'll hit that mark a year early.
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Ice-9
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Re: How much did you save?

Post by Ice-9 »

The OP's post is timely for me. I started saving when single and, although married now, have kept track of my personal contributions and net worth just to see how my personal savings effort has been going. My net worth according to Personal Capital just put me in the Two-Comma-Club last week. I'm 47, so a bit later in life than many forum regulars, but I do just barely qualify to answer the OP's question!

Relevant for the OP's question, I saved very little until age 33. (Embarrassingly, I actually kept a lot sitting in cash in those days, didn't know much about investing.) In 2005 I learned about passive investing and saved as much as I could the next seven years, between 28% and 41% of pre-tax income each year. Then I got married and significantly decreased my contributions for a while. The last few years, I've now settled on contributing somewhere just below 25% of pre-tax income each year.
Last edited by Ice-9 on Tue Aug 18, 2020 10:11 pm, edited 1 time in total.
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cashboy
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Re: How much did you save?

Post by cashboy »

it changed over time. from what i can remember:

in my 20s, enough to get the company 401k match (4%). so that got me 8% total.

in my 30s, maybe 1.5 times the match (6%) as i concentrated on paying down debt. so that got me 10% total.

in my 40s, twice the match (8%) while i continued paying down debt. so that got me 12% total.

for the above, the actual $ amounts went up over time as i got better pay due to raises and promotions.

in my 50s, the 401k contribution $$$ limit and the 401k catch up $$$ limit (check the limits it every year). i also saved some outside of my 401k and IRAs, but not as much as in there.
Last edited by cashboy on Tue Aug 18, 2020 7:34 pm, edited 1 time in total.
Three-Fund Portfolio: FSPSX - FXAIX - FXNAX (with slight tilt of CDs - CASH - Canned Beans - Rice - Bottled Water)
justsomeguy2018
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Re: How much did you save?

Post by justsomeguy2018 »

I don't know if I would have been able to afford doing so, but I recently did some back of the envelope math on what my 401k would be worth right now (I'm age 39) if I had maxed out the 401k ever since age 28 when I started earning a real salary - I would have had an additional ~$280,000 in the 401k by now. :oops:
2tall4economy
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Re: How much did you save?

Post by 2tall4economy »

Tax deferred accounts only (easiest to measure because I only put money into the market this way for years and after tax investing I did via rental property), it took me and my wife 14 years to hit $1M.

And it looks like my actual contributions in total were $445k to hit that $1M. The simple average is $32k/year, but the last 4 years of that 14 years dumped in fully half of the total $445k.

Year to year amounts were all over the place; this timeframe encompassed:
Just me: maxing pre-tax 401k contribs
Me + girlfriend / wife: maxing pre-tax 401k contribs
Wife retires and can't contrib
HSAs were introduced and allowed another road to deferred balances
Moved overseas and liquidated HSA since it was small and I couldn't contribute to it
Found out about backdoor roths for both of us and do that + max pre-tax 401k
Found out about backdoor 401k and do that
Finally decided to do a 529 when we moved to a state that allows a deduction for it.

Never earned enough to max everything -- about $100k in spare change -- until the last few years. Was hard to come up with in many years, especially with rental properties and capital repairs. I was religious about maxing the 401k pre-tax through and getting the match every year but the first.

As others have said, market during your time makes a big difference.
You can do anything you want in life. The rub is that there are consequences.
flaccidsteele
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Re: How much did you save?

Post by flaccidsteele »

mikejuss wrote: Tue Aug 18, 2020 11:20 am A question for the Bogleheads here who have had the good luck of reaching the two-comma club: roughly how much did you save each year?

I assume you maxed out the tax-advantaged accounts to which you had access (eg, a 401(k), an IRA, etc.), and selected index funds for your stock and bond allocations, but how much extra money did you put into a brokerage account (or any other nonqualified account)? I understand that portfolio growth will vary greatly depending on risk tolerance, market returns over specific periods of time, and investing horizon, but I'm curious about what it took for you to win the game.
Personally, in the beginning, a high savings rate funnelled into downturns drove growth

It’s amazing how much money can buy when asset prices are in the gutter

CDN RE crash and dot com crash took me to the 2 comma club in my early 30s

The credit crisis and US RE crash added a few million more

I retired in my 40s. No point trading my Life for money at a job when the money isn’t even being used
The US market always recovers. It’s never different this time. Retired in my 40s. Investing is a simple game of rinse and repeat
TimeTheMarket
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Re: How much did you save?

Post by TimeTheMarket »

justsomeguy2018 wrote: Tue Aug 18, 2020 7:33 pm I don't know if I would have been able to afford doing so, but I recently did some back of the envelope math on what my 401k would be worth right now (I'm age 39) if I had maxed out the 401k ever since age 28 when I started earning a real salary - I would have had an additional ~$280,000 in the 401k by now. :oops:
I do this sometimes and I did it even yesterday. But I also was able to remember that a decade ago when we were on one or maybe 1.5 incomes with two kids, mortgage, daycare, etc, and their 529s to contribute to I just didn't have much spare money. I could have found more for sure, but another thousand a month was completely impossible.
Username is not serious :)
Jack FFR1846
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Re: How much did you save?

Post by Jack FFR1846 »

DW and I contributed about 6% each to our 401k's. But from the start, we were avalanche paying off our debts (before that term even existed). When the debts except our mortgage was fully paid, I started buying US Savings bonds sparatically. We were serial refinancers on the mortgage, doing 3 no-cost refis. We paid down the mortgage with every refi and went from a 30 year ARM to fixed to 15, lowering the rate every time (80's and 90's when 10% was cheap). We always lived way below our means. Finally, when I was 45, stock options at my company hit big and I was able to pay off the mortgage. We never maxed the 401k until about 5 years ago for me. DW didn't have one. We also started our first Roths about 5 years ago. No taxable investing started until maybe 3 years ago. I'm now 63 and close to 3 mil in investments.
Bogle: Smart Beta is stupid
mak1277
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Re: How much did you save?

Post by mak1277 »

justsomeguy2018 wrote: Tue Aug 18, 2020 7:33 pm I don't know if I would have been able to afford doing so, but I recently did some back of the envelope math on what my 401k would be worth right now (I'm age 39) if I had maxed out the 401k ever since age 28 when I started earning a real salary - I would have had an additional ~$280,000 in the 401k by now. :oops:
I actually do the same exercise when I want to feel better about not contributing anything to retirement for the first 8 years of my working career. The impact to my net worth would be less than 2%.

Earning a lot beats saving a lot.
Dottie57
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Re: How much did you save?

Post by Dottie57 »

I started at 6% contribution to 401k at age 31. Within a couple of years I was at 15% but did not max out401k due to low income. At the Great recession I started maxing out 401k including the catchup amount. Employer added 3% as a match and Safe Harbor contributed another 4%. So contributions really added up at a time when equities were priced very low - enabled me to have a rapidly growing 401k balance. It made my retirement.
investnoob
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Re: How much did you save?

Post by investnoob »

I think I reached it a while ago, without really understanding that I did.
I have contributed to a defined benefit pension plan for the last 20 years.
If I leave now, I believe that it would cost me over $1M CAD to get a similar inflation indexed annuity for the same amount, at 60 years old.
I contributed about 8% to 10% of my salary to this pension, over the years.
This part is very easy for me to forget. I could technically "cash" this out, but would cost me almost $200k in taxes, and I think I would "only" get a lump sum of about $400k after tax.

Then I bought a house, and made mortgage payments. I will finish it this year, after 15 years. This is another way of "forced" savings.
I didn't really make much money after taxes, interest, and insurance payments. I believe that I have essentially paid around $500 a month in "rent" to keep this place going after the last 15 years. If I keep it another 30 to 50 years, then I will be further ahead, I guess.

Finally, at around 29 or 30 years old I got a significant raise in income and I managed to stash most of it away in tax deferred/advantaged investment accounts. It amounted to maybe another 8-10% of my gross salary for the last 10 to 12 years.
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