What was your Savings Rate in 2011?

Have a question about your personal investments? No matter how simple or complex, you can ask it here.

What was your savings rate in 2011?

%0 - %10
19
7%
%10 - %20
47
17%
%20 - %30
76
28%
%30 - %40
41
15%
%40 - %50
40
15%
%50 - %60
30
11%
%60+
19
7%
 
Total votes: 272

Topic Author
FinanceFun
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What was your Savings Rate in 2011?

Post by FinanceFun » Fri Mar 23, 2012 9:29 am

2011: I hit %53 of gross income! This year striving for %60. Then will likely fall off a cliff, as I start a family next year... :? How about you?

mac808
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Re: What was your Savings Rate in 2011?

Post by mac808 » Fri Mar 23, 2012 9:34 am

About 55% of gross income. Taxes > personal expenses.

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mhc
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Re: What was your Savings Rate in 2011?

Post by mhc » Fri Mar 23, 2012 9:38 am

Last year was a really good year due to unusual circumstances (67%). I am shooting for 40-50% for the next five years. If the market has avg returns, my retirement funding will pretty much be done. I would probably back off to 25% then.

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rob
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Re: What was your Savings Rate in 2011?

Post by rob » Fri Mar 23, 2012 10:00 am

Wow... I sometime forget what this group is like compared to most people... Not until I see some of these poll responses that I remember :-). My hats off to some of the responses further down the list. I struggle to get 15% (to be fair, with a non working spouse and kids it's not easy and I was saving far more when both of us were working with no kids - so it's also about the various stages we are all in).
| Rob | Its a dangerous business going out your front door. - J.R.R.Tolkien

stoptothink
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Re: What was your Savings Rate in 2011?

Post by stoptothink » Fri Mar 23, 2012 10:01 am

Somehow it was 55%-ish. I still don't know how I did it, hoping I can replicate it this year. Having $26.5k of tax advantaged space(403b+Roth+TRS) along with being a full-time student and living in a state with no income taxes sure helped; my marginal tax rate was ZERO(yes, I was one of those).

sscritic
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Re: What was your Savings Rate in 2011?

Post by sscritic » Fri Mar 23, 2012 10:12 am

Retired: it took awhile to figure out my income: AGI adjusted to include all pensions and SS, not just the taxable parts, and tax-exempt income, but not my carryover capital losses.* Spending came from Quicken. I saved 45% in 2011. I guess I should cut back on my spending this year (no cruises) and shoot for 50%. This all goes out the window if I buy a house (all cash). My savings rate for 2012 would then be roughly -300%.

Also, once I hit RMD, my savings rate will go up. I will have more income, but no more spending (except for the additional tax). Hmm, maybe not. If I lose 25% to taxes and spend none of the rest, my savings go from

CS/CI (current savings divided by current income) to (CS + 0.75RMD)/(CI + RMD)

Is this always bigger than CS/CI? I could do the algebra, but I leave it as a exercise to the reader. I bet the answer depends on whether my current savings rate is over 25%, but that's just a quick lazy guess.

* I know this is disputed. To me, I had the $3000 of income last year from other sources; I didn't pay tax on it, but it was still income in my mind.

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cheese_breath
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Re: What was your Savings Rate in 2011?

Post by cheese_breath » Fri Mar 23, 2012 10:14 am

Zero. Retired and live off pensions, Social Security and investments. Overall wealth increased though thanks to stock market recovery.
The surest way to know the future is when it becomes the past.

jonballs
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Re: What was your Savings Rate in 2011?

Post by jonballs » Fri Mar 23, 2012 10:25 am

Only saved about 19% this year, but we did pay down student loans and paid off a 2nd mtg, which accounted for about 30% of our income for 2011. Just paid off all the student loans last month and will rid ourselves of our final car payment (ever) in the coming month, so I'm looking forward to answering the 2012 poll!

lexie2000
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Re: What was your Savings Rate in 2011?

Post by lexie2000 » Fri Mar 23, 2012 10:39 am

45% for us.

2012 will be the last year that we have a high savings rate.

DVMResident
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Re: What was your Savings Rate in 2011?

Post by DVMResident » Fri Mar 23, 2012 10:46 am

jonballs wrote:Only saved about 19% this year, but we did pay down student loans and paid off a 2nd mtg, which accounted for about 30% of our income for 2011. Just paid off all the student loans last month and will rid ourselves of our final car payment (ever) in the coming month, so I'm looking forward to answering the 2012 poll!
I would count paying debt in the "savings" column :beer Congrats on the student loans!

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kenyan
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Re: What was your Savings Rate in 2011?

Post by kenyan » Fri Mar 23, 2012 11:01 am

Around 40%...but now that I see the last post, if you add in our debt repayment (paid off one of my wife's student loans), we're easily above 40%. Pretty happy with that, given that we had a child in late 2010.
Retirement investing is a marathon.

Sam I Am
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Re: What was your Savings Rate in 2011?

Post by Sam I Am » Fri Mar 23, 2012 11:08 am

Message deleted.
Last edited by Sam I Am on Tue Oct 08, 2013 3:44 pm, edited 1 time in total.

sscritic
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Re: What was your Savings Rate in 2011?

Post by sscritic » Fri Mar 23, 2012 11:26 am

DVMResident wrote: I would count paying debt in the "savings" column
And what about your mortgage payments (paying mortgage debt)? That's housing consumption, not savings, in my mind.

Topic Author
FinanceFun
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Re: What was your Savings Rate in 2011?

Post by FinanceFun » Fri Mar 23, 2012 11:41 am

sscritic wrote:
DVMResident wrote: I would count paying debt in the "savings" column
And what about your mortgage payments (paying mortgage debt)? That's housing consumption, not savings, in my mind.
Savings = excess above living expenses. So mortgage debt doesn't count (principle on mortgage included - in my mind), but extra principle payments do.

hlfo718
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Re: What was your Savings Rate in 2011?

Post by hlfo718 » Fri Mar 23, 2012 11:55 am

I thought we save a lot but not even close to some of you Bogleheads. We saved around 35% of gross. Looking to reduced our housing cost this year by moving so hopefully that will add another 5% to savings.

Userdc
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Re: What was your Savings Rate in 2011?

Post by Userdc » Fri Mar 23, 2012 12:53 pm

Round numbers, a third of income goes to taxes, a third to consumption and a third to savings.

Grasshopper
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Re: What was your Savings Rate in 2011?

Post by Grasshopper » Fri Mar 23, 2012 1:00 pm

I didn't save anything, just didn't spend as much as I could have. :greedy

Topic Author
FinanceFun
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Re: What was your Savings Rate in 2011?

Post by FinanceFun » Fri Mar 23, 2012 1:10 pm

Look at that bell curve! :)

livesoft
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Re: What was your Savings Rate in 2011?

Post by livesoft » Fri Mar 23, 2012 1:23 pm

Probably some negative value, so I could not vote.
Wiki This signature message sponsored by sscritic: Learn to fish.

sscritic
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Re: What was your Savings Rate in 2011?

Post by sscritic » Fri Mar 23, 2012 1:24 pm

FinanceFun wrote:Look at that bell curve! :)
What bell curve? Where are the negative values? What if I spent more than 100% of my income?

Truncated bell curve perhaps, but certainly not a bell curve. A "damaged bell" curve?'

[Added edit: Why does livesoft always beat me? Because I use more words to express the same idea.]

Topic Author
FinanceFun
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Re: What was your Savings Rate in 2011?

Post by FinanceFun » Fri Mar 23, 2012 1:41 pm

sscritic wrote:
FinanceFun wrote:Look at that bell curve! :)
What bell curve? Where are the negative values? What if I spent more than 100% of my income?

Truncated bell curve perhaps, but certainly not a bell curve. A "damaged bell" curve?'

[Added edit: Why does livesoft always beat me? Because I use more words to express the same idea.]
http://www.investopedia.com/terms/b/bel ... z1py0BKxKe

Talking about distribution of values. No idea what you are trying to say?

Topic Author
FinanceFun
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Re: What was your Savings Rate in 2011?

Post by FinanceFun » Fri Mar 23, 2012 1:44 pm

sscritic wrote:
FinanceFun wrote:Look at that bell curve! :)
What bell curve? Where are the negative values? What if I spent more than 100% of my income?

Truncated bell curve perhaps, but certainly not a bell curve. A "damaged bell" curve?'

[Added edit: Why does livesoft always beat me? Because I use more words to express the same idea.]
http://www.investopedia.com/terms/b/bel ... z1py0BKxKe

Talking about distribution of values. No idea what you are trying to say?

bell curve or bell-shaped curve (blshpt)
n.
The symmetrical curve of a normal distribution. Also called normal curve.

sscritic
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Re: What was your Savings Rate in 2011?

Post by sscritic » Fri Mar 23, 2012 1:52 pm

Let me help you with that. A bell curve goes from negative infinity to positive infinity. Your "bell curve" can't even get past zero to negative 1/10000. It ain't a bell curve. Try again.

It might help you to use a real reference instead of investopedia.

HornedToad
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Re: What was your Savings Rate in 2011?

Post by HornedToad » Fri Mar 23, 2012 1:54 pm

FinanceFun wrote:
sscritic wrote:
DVMResident wrote: I would count paying debt in the "savings" column
And what about your mortgage payments (paying mortgage debt)? That's housing consumption, not savings, in my mind.
Savings = excess above living expenses. So mortgage debt doesn't count (principle on mortgage included - in my mind), but extra principle payments do.
This is why I never know how to answer the question. There's so many ways to define savings.

I'll use the following:

(Retirement Savings+Match+Housing Principle+Paying down non-consumer Loans+Emergency Fund Savings or Stock investments)/(Gross Income + 401k Match)

So Student loan paydown would count as savings, Car payment does not since it's paying a deferred consumer expense
I'm including 401k loan paydown since it was for taken out for a house
Savings for emergency fund counts, but savings to take a future vacation do not.
Tax refund from 2011 that is saved would also count since it's from 2011 income.

Using the above definition i'm in the ~28-29% range. Maybe slightly higher.

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FinanceFun
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Re: What was your Savings Rate in 2011?

Post by FinanceFun » Fri Mar 23, 2012 2:06 pm

sscritic wrote:Let me help you with that. A bell curve goes from negative infinity to positive infinity. Your "bell curve" can't even get past zero to negative 1/10000. It ain't a bell curve. Try again.

It might help you to use a real reference instead of investopedia.

I would love to see a link to a credible source that talk about a statistical bell curve requiring negative data points.

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FinanceFun
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Re: What was your Savings Rate in 2011?

Post by FinanceFun » Fri Mar 23, 2012 2:08 pm

sscritic wrote:Let me help you with that. A bell curve goes from negative infinity to positive infinity. Your "bell curve" can't even get past zero to negative 1/10000. It ain't a bell curve. Try again.

It might help you to use a real reference instead of investopedia.

http://dictionary.reference.com/browse/bell+curve
http://www.thefreedictionary.com/bell+curve
http://www.investopedia.com/terms/b/bell-curve.asp
http://statistics.about.com/od/HelpandT ... -Curve.htm

Disagree with your definition.

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kenyan
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Re: What was your Savings Rate in 2011?

Post by kenyan » Fri Mar 23, 2012 2:15 pm

We should have negative savings as an option, though...prior to 2008/2009 the majority of the country fell into that category.

Likely not too many Bogleheads, though.
Retirement investing is a marathon.

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bertilak
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Re: What was your Savings Rate in 2011?

Post by bertilak » Fri Mar 23, 2012 2:15 pm

I retired December 2010. I am living on my pension and SS with not much left over so My savings rate was 0%.
May neither drought nor rain nor blizzard disturb the joy juice in your gizzard. -- Squire Omar Barker, the Cowboy Poet

sscritic
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Re: What was your Savings Rate in 2011?

Post by sscritic » Fri Mar 23, 2012 2:15 pm

Seriously? You can't bing?
http://mathworld.wolfram.com/NormalDistribution.html

read the words "on the domain of x ∈(-∞ , ∞)"

Edit: you and I have different definitions of the word "reference." About.com? :)

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robolove
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Re: What was your Savings Rate in 2011?

Post by robolove » Fri Mar 23, 2012 2:25 pm

Since I am not allowed to have any tax advantaged accounts. ex.. 401K, roth, etc.

22% of Net Pay

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leonidas
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Re: What was your Savings Rate in 2011?

Post by leonidas » Fri Mar 23, 2012 2:27 pm

I can only manage about 16% mostly in 401k

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Nestegg_User
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Re: What was your Savings Rate in 2011?

Post by Nestegg_User » Fri Mar 23, 2012 2:29 pm

HornedToad wrote:
FinanceFun wrote:
sscritic wrote:
DVMResident wrote: I would count paying debt in the "savings" column
And what about your mortgage payments (paying mortgage debt)? That's housing consumption, not savings, in my mind.
Savings = excess above living expenses. So mortgage debt doesn't count (principle on mortgage included - in my mind), but extra principle payments do.
This is why I never know how to answer the question. There's so many ways to define savings.

I'll use the following:

(Retirement Savings+Match+Housing Principle+Paying down non-consumer Loans+Emergency Fund Savings or Stock investments)/(Gross Income + 401k Match)

So Student loan paydown would count as savings, Car payment does not since it's paying a deferred consumer expense
I'm including 401k loan paydown since it was for taken out for a house
Savings for emergency fund counts, but savings to take a future vacation do not.
Tax refund from 2011 that is saved would also count since it's from 2011 income.

Using the above definition i'm in the ~28-29% range. Maybe slightly higher.
I would not include "Housing Principle" since it is for consumption -- not investible; I would also not include paying down loans -- as that is removing expenses, not increasing available investible reserves. (Doesn't apply to us anyhow w/ paid-off house and NO debt.)

Ours was ~50% ... would have tried for higher, but had to pay taxes
Last edited by Nestegg_User on Sat Mar 24, 2012 8:18 pm, edited 1 time in total.

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FinanceFun
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Re: What was your Savings Rate in 2011?

Post by FinanceFun » Fri Mar 23, 2012 2:29 pm

sscritic wrote:Seriously? You can't bing?
http://mathworld.wolfram.com/NormalDistribution.html

read the words "on the domain of x ∈(-∞ , ∞)"

Edit: you and I have different definitions of the word "reference." About.com? :)

I see where you misunderstood. Just because you CAN go from (-∞ , ∞), doesn't mean that it is REQUIRED. ANY normalized distribution (-n, n), (n, n), (-n, -n) ARE ALL Bell Curves.

In fact, the example given on the link YOU provided shows an all positive data set.

sscritic
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Re: What was your Savings Rate in 2011?

Post by sscritic » Fri Mar 23, 2012 2:36 pm

Take your curve from 0 to N. Integrate to get the total area. Your answer will be less than one. It might not be much less than one, but it won't be one. It is not a probability distribution. It is a pretty graph. It is not a normal distribution.

The example you claim is a normal distribution in my link is a binomial distribution, not a normal distribution.
The normal distribution is the limiting case of a discrete binomial distribution
The red bars are the binomial distribution.

HornedToad
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Re: What was your Savings Rate in 2011?

Post by HornedToad » Fri Mar 23, 2012 2:40 pm

Cheap_rookie wrote:
HornedToad wrote:
FinanceFun wrote:
sscritic wrote:
DVMResident wrote: I would count paying debt in the "savings" column
And what about your mortgage payments (paying mortgage debt)? That's housing consumption, not savings, in my mind.
Savings = excess above living expenses. So mortgage debt doesn't count (principle on mortgage included - in my mind), but extra principle payments do.
This is why I never know how to answer the question. There's so many ways to define savings.

I'll use the following:

(Retirement Savings+Match+Housing Principle+Paying down non-consumer Loans+Emergency Fund Savings or Stock investments)/(Gross Income + 401k Match)

So Student loan paydown would count as savings, Car payment does not since it's paying a deferred consumer expense
I'm including 401k loan paydown since it was for taken out for a house
Savings for emergency fund counts, but savings to take a future vacation do not.
Tax refund from 2011 that is saved would also count since it's from 2011 income.

Using the above definition i'm in the ~28-29% range. Maybe slightly higher.
I would not include "Housing Principle" since it is for consumption -- not investible; I would also not include paying down loans -- as that is removing expenses, not increasing available investible reserves. (Doesn't apply to us anyhow w/ paid-off house and NO debt.)

Ours was ~50% ... would have tried for higher, but had to pay taxes

After-tax burn rate was under 21%, which included surgery :? , and related rehab cost, and three vacations 8-)
Ok, I won't call it "savings rate" but instead "controllable net worth increases excluding consumer activities"... I believe net worth matters more than just investible assets and focus on that. Paying down student loan/401k loan/housing principle/etc today leads to future savings tomorrow.

It is strange to me that using "savings" definition my savings rate would go up by having an IO loan and instead of paying principle on the house you invest the same amount instead. It increases my networth by the same amount, just one counts as savings and the other doesn't. Same idea with paying off the house early so now I can say I'm "saving" the principle each month in my investment account where in the past it was just an expense. There is no difference in Net worth but one counts and one doesn't?

For me, that's counterintuitive and why I prefer to look at total savings, or net worth increases that did not come from the stock market when making decisions and evaluating lifestyle etc.

YMMV

2wolves
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Re: What was your Savings Rate in 2011?

Post by 2wolves » Fri Mar 23, 2012 2:56 pm

FinanceFun wrote:
sscritic wrote:Seriously? You can't bing?
http://mathworld.wolfram.com/NormalDistribution.html

read the words "on the domain of x ∈(-∞ , ∞)"

Edit: you and I have different definitions of the word "reference." About.com? :)

I see where you misunderstood. Just because you CAN go from (-∞ , ∞), doesn't mean that it is REQUIRED. ANY normalized distribution (-n, n), (n, n), (-n, -n) ARE ALL Bell Curves.

In fact, the example given on the link YOU provided shows an all positive data set.
sscritic is right on this. It is required for a normal distribution. All the same, I think most everyone knows what you were trying to say. Some of us just get hypersensitive about statistical definitions sometimes.

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steelerfan
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Re: What was your Savings Rate in 2011?

Post by steelerfan » Fri Mar 23, 2012 3:01 pm

29%
10% into ROTH IRAs
7% into 401K
12% into Savings acct
"You make most of your money in a bear market, you just don't realize it at the time." - Shelby Cullom Davis

Grasshopper
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Re: What was your Savings Rate in 2011?

Post by Grasshopper » Fri Mar 23, 2012 3:04 pm

OK, OK, I confess I am at negative infinity. Maybe I am a Higgs boson. :sharebeer

Hector
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Re: What was your Savings Rate in 2011?

Post by Hector » Fri Mar 23, 2012 3:45 pm

How about estimated taxes that you are going to pay on tax deferred accounts?
If couple A makes $100k gross annual income and contribute $10k towards Regular IRA. They might calculate 10% as their savings rate.
If couple B makes $100k gross annual income and contribute $10k towards Roth IRA. They might calculate 10% as their savings rate.
It is clear that couple B doing better than couple A given both of these couple wont be in 0% tax bracket in retirement. May be couple A would deduct x% based on their estimated tax bracket in retirement from their regular IRA for calculating net worth.

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Sheepdog
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Re: What was your Savings Rate in 2011?

Post by Sheepdog » Fri Mar 23, 2012 4:12 pm

cheese_breath wrote:Zero. Retired and live off pensions, Social Security and investments. Overall wealth increased though thanks to stock market recovery.
DITTO
It's not what you gather, but what you scatter which tells what kind of life you have lived---Helen Walton

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FinanceFun
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Re: What was your Savings Rate in 2011?

Post by FinanceFun » Fri Mar 23, 2012 4:17 pm

Hector wrote:How about estimated taxes that you are going to pay on tax deferred accounts?
If couple A makes $100k gross annual income and contribute $10k towards Regular IRA. They might calculate 10% as their savings rate.
If couple B makes $100k gross annual income and contribute $10k towards Roth IRA. They might calculate 10% as their savings rate.
It is clear that couple B doing better than couple A given both of these couple wont be in 0% tax bracket in retirement. May be couple A would deduct x% based on their estimated tax bracket in retirement from their regular IRA for calculating net worth.

I will participate if you set up a poll.

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FinanceFun
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Re: What was your Savings Rate in 2011?

Post by FinanceFun » Fri Mar 23, 2012 4:19 pm

I think it is safe to say.... bell curve or not .... that boggle heads SAVE. Impressive distribution of results. Im happy to have found a community that shares these priorities.

SGM
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Re: What was your Savings Rate in 2011?

Post by SGM » Fri Mar 23, 2012 5:07 pm

Does paying taxes on a Roth conversion decrease your percentage savings rate?
"Let us endeavor, so to live, that when we die, even the undertaker will be sorry." Mark Twain

peppers
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Re: What was your Savings Rate in 2011?

Post by peppers » Fri Mar 23, 2012 5:23 pm

32.8%
"..the cavalry ain't comin' kid, you're on your own..."

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ofcmetz
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Re: What was your Savings Rate in 2011?

Post by ofcmetz » Fri Mar 23, 2012 5:40 pm

29% of gross
Never underestimate the power of the force of low cost index funds.

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conradjr
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Re: What was your Savings Rate in 2011?

Post by conradjr » Fri Mar 23, 2012 5:52 pm

11% of gross, didn't expect so many people to be in the higher percentage numbers

cheesepep
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Re: What was your Savings Rate in 2011?

Post by cheesepep » Fri Mar 23, 2012 5:55 pm

About 93% (seriously). I live overseas and pay foreign income tax. I owe almost no tax to US government. My living expenses here are minimal.

mortal
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Re: What was your Savings Rate in 2011?

Post by mortal » Fri Mar 23, 2012 6:08 pm

For 2011 it was 63%

I could probably push it to 65%, but it would cut into my vices :beer

bluelight
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Re: What was your Savings Rate in 2011?

Post by bluelight » Fri Mar 23, 2012 6:26 pm

I voted 0 - 10%. Was laid off in Jan 2011, immediately went into super saver mode and saved as much as I could of my 6 months of severance pay. Lived off that savings and unemployment for the rest of the year. Finally landed a new job last month and am back to savings 25% - 30%.

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market timer
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Re: What was your Savings Rate in 2011?

Post by market timer » Fri Mar 23, 2012 6:45 pm

Homeownership is a small business. The homeowner pays himself to live in his primary residence. He consumes the amount of rent that the property would receive on the market. I suspect that homeowners who own their homes outright are overestimating savings rates. Take two people: one owns his house outright, earns $76K salary (after tax), and saves $20K in a retirement account. The other rents a similar house across the street for $24K/year, earns $100K (after tax), and saves $20K in a retirement account. These people in fact have the same savings rates as a fraction of after tax income: 20%. The former earns $76K from labor and $24K from capital (the house), and saves 20%. The latter earns $100K from labor and nothing from capital, and also saves 20%.

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