What percentage of your paycheck do you invest?

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birdog
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Re: What percentage of your paycheck do you invest?

Post by birdog »

dbadalam wrote: Sun Apr 05, 2020 8:55 pm
birdog wrote: Sun Apr 05, 2020 8:36 pm This is a bit of an eye opener for many. While early retirement is not for everyone, achieving financial independence can be life changing on many levels and afford you the ability to drastically change your life based on your values.

https://www.mrmoneymustache.com/2012/01 ... etirement/


Image
The “for many” you speak of are highly compensated professionals (of which I am also). For most people, bare bones basic necessities eat up their entire income. Saving money isn’t a possibility let alone saving more than half their income.
Where did I suggest everyone could save over half their income? The chart illustrates years to retirement/financial independence based on every level of savings rate. If yours is 20%, the chart tells you the number of working years that correspond to that. It highlights a high savings rate because that is what I cut and pasted from the article as the author is trying to show how a high savings rate can drastically reduce the number of required working years. I encourage you to read the article. It’s for every income level.
champion_ham
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Re: What percentage of your paycheck do you invest?

Post by champion_ham »

We invest 30% of gross income for retirement. When employer 401k match and employer HSA contributions are taken into account, it’s probably closer to 32%. I’m not sure what that equates to post tax.
Triple digit golfer
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Re: What percentage of your paycheck do you invest?

Post by Triple digit golfer »

birdog wrote: Sun Apr 05, 2020 9:05 pm
dbadalam wrote: Sun Apr 05, 2020 8:55 pm
birdog wrote: Sun Apr 05, 2020 8:36 pm This is a bit of an eye opener for many. While early retirement is not for everyone, achieving financial independence can be life changing on many levels and afford you the ability to drastically change your life based on your values.

https://www.mrmoneymustache.com/2012/01 ... etirement/


Image
The “for many” you speak of are highly compensated professionals (of which I am also). For most people, bare bones basic necessities eat up their entire income. Saving money isn’t a possibility let alone saving more than half their income.
Where did I suggest everyone could save over half their income? The chart illustrates years to retirement/financial independence based on every level of savings rate. If yours is 20%, the chart tells you the number of working years that correspond to that. It highlights a high savings rate because that is what I cut and pasted from the article as the author is trying to show how a high savings rate can drastically reduce the number of required working years. I encourage you to read the article. It’s for every income level.
The MMM article is savings rate post tax. Wouldn't it differ depending on pre tax contributions and expenses?

Suppose $100k gross income.
$20k to pretax 401k for simplicity.
$10k to pretax medical premiums.
$15k to payroll and income taxes.
Take home pay is $55k.
Spend $45k of that.
Savings after tax is $10k (excludes $20k 401k)
I would say savings is $30k and 30% of gross. That's easy.

What about the MMM formula for net?
$10k out of $55k?
$30k out of $55k?
$30k out of $75k? (Denominator is net pay plus 401k)
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birdog
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Re: What percentage of your paycheck do you invest?

Post by birdog »

Triple digit golfer wrote: Sun Apr 05, 2020 9:14 pm The MMM article is savings rate post tax. Wouldn't it differ depending on pre tax contributions and expenses?

Suppose $100k gross income.
$20k to pretax 401k for simplicity.
$10k to pretax medical premiums.
$15k to payroll and income taxes.
Take home pay is $55k.
Spend $45k of that.
Savings after tax is $10k (excludes $20k 401k)
I would say savings is $30k and 30% of gross. That's easy.

What about the MMM formula for net?
$10k out of $55k?
$30k out of $55k?
$30k out of $75k? (Denominator is net pay plus 401k)
The second footnote in the article:
** definition of take-home pay: gross income minus all taxes. Remember to add back in any 401k or other savings deductions to the paycheck you see, since these are really part of what you are “taking home” – you just happen to be saving it automatically.
Rat_Race
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Re: What percentage of your paycheck do you invest?

Post by Rat_Race »

We max out (age 50+) 401k, 403b, 457b plus two Roth accounts, so about 40% of gross income.
Triple digit golfer
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Re: What percentage of your paycheck do you invest?

Post by Triple digit golfer »

birdog wrote: Sun Apr 05, 2020 9:31 pm
Triple digit golfer wrote: Sun Apr 05, 2020 9:14 pm The MMM article is savings rate post tax. Wouldn't it differ depending on pre tax contributions and expenses?

Suppose $100k gross income.
$20k to pretax 401k for simplicity.
$10k to pretax medical premiums.
$15k to payroll and income taxes.
Take home pay is $55k.
Spend $45k of that.
Savings after tax is $10k (excludes $20k 401k)
I would say savings is $30k and 30% of gross. That's easy.

What about the MMM formula for net?
$10k out of $55k?
$30k out of $55k?
$30k out of $75k? (Denominator is net pay plus 401k)
The second footnote in the article:
** definition of take-home pay: gross income minus all taxes. Remember to add back in any 401k or other savings deductions to the paycheck you see, since these are really part of what you are “taking home” – you just happen to be saving it automatically.
Ah, thanks. So it's $30k out of $85k in my example, or 35%?

Out of the $100k gross:

$15k taxes
$10k medical premiums
$45k other expenses
$30k savings
BrownEyedGirl_27
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Re: What percentage of your paycheck do you invest?

Post by BrownEyedGirl_27 »

Last year it was 35% gross income, once I can get a good job again it will go back up to that amount or even more depending on my new income level. I am just starting a job search.
Last edited by BrownEyedGirl_27 on Mon Apr 06, 2020 12:33 pm, edited 1 time in total.
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thelateinvestor43
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Re: What percentage of your paycheck do you invest?

Post by thelateinvestor43 »

I don't have a paycheck I just got laid off.
BrownEyedGirl_27
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Re: What percentage of your paycheck do you invest?

Post by BrownEyedGirl_27 »

simplesauce wrote: Sun Apr 05, 2020 7:35 pm
Jacobi wrote: Sun Apr 05, 2020 6:45 pm
dbadalam wrote: Sun Apr 05, 2020 6:43 pm
lowndes wrote: Sun Apr 05, 2020 6:36 pm
simplesauce wrote: Sun Apr 05, 2020 5:46 pm My family puts 10% of each paycheck into our investment accounts. We are looking to increase this to 15% moving forward. How about all of you?
Same as you: 10-15% of base pay. I’m all over the map with what I do with my annual bonus.
I’ll bet you guy were not expecting the kind of answers your getting in this thread.
Yeah, this is a rather elite and high-earning group we're talking to on this forum.
I am completely floored by the responses! Wow.

Is it because the above Bogleheads make a very large income? (and what might that be? $150k? $300k? $600k?)

Or is it because they already have filled their savings accounts and emergency funds to comfortable levels, and therefore can lock away much of their income into the market for the future?

We can’t imagine investing so much of each paycheck at the moment. We have bills, expenses, mortgage, etc. Maybe once our savings gives us a year or two (?) of security. I really can’t believe the responses.
We do it to be prepared for situations like the Coronavirus. We are not high income, just savers by nature. We save about 45% gross...my trick is pretending we are still living in college. I am searching for a higher-paying job at the moment. I imagine years down the road when we have a mortgage and kids that our savings rate won't be as high. But we're preparing for pretty much anything.

Cheers

EDIT: We save 35% gross for retirement and 10% tithing
Last edited by BrownEyedGirl_27 on Mon Apr 06, 2020 12:32 pm, edited 1 time in total.
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TheNightsToCome
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Re: What percentage of your paycheck do you invest?

Post by TheNightsToCome »

simplesauce wrote: Sun Apr 05, 2020 7:35 pm
Jacobi wrote: Sun Apr 05, 2020 6:45 pm
dbadalam wrote: Sun Apr 05, 2020 6:43 pm
lowndes wrote: Sun Apr 05, 2020 6:36 pm
simplesauce wrote: Sun Apr 05, 2020 5:46 pm My family puts 10% of each paycheck into our investment accounts. We are looking to increase this to 15% moving forward. How about all of you?
Same as you: 10-15% of base pay. I’m all over the map with what I do with my annual bonus.
I’ll bet you guy were not expecting the kind of answers your getting in this thread.
Yeah, this is a rather elite and high-earning group we're talking to on this forum.
I am completely floored by the responses! Wow.

Is it because the above Bogleheads make a very large income? (and what might that be? $150k? $300k? $600k?)

Or is it because they already have filled their savings accounts and emergency funds to comfortable levels, and therefore can lock away much of their income into the market for the future?

We can’t imagine investing so much of each paycheck at the moment. We have bills, expenses, mortgage, etc. Maybe once our savings gives us a year or two (?) of security. I really can’t believe the responses.
Good income.
No kids.
No debt.
LCOL.
Not much desire for material things.
Strong desire for financial security.
ThePrince
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Re: What percentage of your paycheck do you invest?

Post by ThePrince »

Triple digit golfer wrote: Sun Apr 05, 2020 7:58 pm Keep in mind, OP, that people with lower savings rates are less likely to respond.

15% is very respectable. Well above average.
+1
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Spinola
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Re: What percentage of your paycheck do you invest?

Post by Spinola »

Me 20% of gross to 403b
employer contributes 8%
Also contribute max to Roth every year
and contribute 10% of self-employment income to SEP IRA
brett41
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Re: What percentage of your paycheck do you invest?

Post by brett41 »

I think anything between 10-25% is good to very good for most people. Maybe up to 33% if you have low housing costs or no housing. Anything above that involves very impressive levels of income and or frugality.
bsdsecprof
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Re: What percentage of your paycheck do you invest?

Post by bsdsecprof »

Just graduated university. Roughly 10% of my pay goes to a pension and I put 5.4% in deferred compensation for a total of 15%. Sub 50k salary, single, no kids
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madbrain
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Re: What percentage of your paycheck do you invest?

Post by madbrain »

It has been 100% other than taxes and benefits this year. Put $57,000 in the 401k, between pre-tax, matching and after-tax contributions. The largest portion of that was at January prices, sadly, as that is when annual bonus was paid. I'm just starting to get direct deposits this month.
Also funded both my husband and my IRA in January. My timing is always the worst.
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Stef
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Re: What percentage of your paycheck do you invest?

Post by Stef »

6450$ net

50% expenses
13% taxes
7% vacation
30% savings
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BroIceCream
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Re: What percentage of your paycheck do you invest?

Post by BroIceCream »

When I started my career, I put 8% in my 401k. Everytime I received a raise, I added half of the raise % to my 401k, and kept the rest.
Decades later, I am putting in ~25% in 401k, with 10% to personal savings. And am on track to retire quite comfortably.
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btq96r
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Re: What percentage of your paycheck do you invest?

Post by btq96r »

While not a "high earner" by most standard definitions, I do have the oppourtunity to pull above the average nationally and for my region. I managed to save/invest 30% of gross salary as an annual total in 2019 while not being a miser about it (eating out, enjoying hobbies, a concert on occasion, ect...). No kids, and no debt certainly enabled the saving and the enjoyable activities in high balance.

Was trending in the 30% range again for 2020 based on estimates to date, but I'm thinking CoronaMania will alter things for me, as I'm sure it will for a lot of folks.
Last edited by btq96r on Mon Apr 06, 2020 9:31 am, edited 1 time in total.
2tall4economy
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Re: What percentage of your paycheck do you invest?

Post by 2tall4economy »

Let’s see. My paycheck is 1/3 of my comp (lti and annual bonus make up the rest) and I spend about 60% of the gross of that.

So I’d say 40% of gross goes to tax, 40% goes to savings and 20% gets spent. I envy those who are in single digits! ....maybe.
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dru808
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Re: What percentage of your paycheck do you invest?

Post by dru808 »

12% automatically, then I decide year end what additional will be invested, anywhere between 15-20% of total income.
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TierArtz
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Re: What percentage of your paycheck do you invest?

Post by TierArtz »

Presently, roughly 36% of gross pay/pension/farm profit. Historically, average of 26% over the last 34 years.
Ari
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Re: What percentage of your paycheck do you invest?

Post by Ari »

simplesauce wrote: Sun Apr 05, 2020 7:35 pm I am completely floored by the responses! Wow.

Is it because the above Bogleheads make a very large income? (and what might that be? $150k? $300k? $600k?)
I have decent income, though surely not large by Bogleheads standards. I'm a well-payed engineer, and make about 42k/year after taxes (more than most of my colleagues). I live in Sweden, so it's not completely comparable. COL here is slightly below the US, but not by much, especially in the city where i live (second largest). I save about 2/3 post tax, living on a bit over 1k USD per month. So for me, low expenses is the key to a large savings rate. Recently, I've tended to spend a bit more than the above due to a lot of vacations, but I feel keeping your fixed expenses low is most important. for one-time expenses I allow myself a bit more leeway.

I do it by renting a cellar apartment (average rent here is probably equal to my entire monthly expenses!), not having a car or taking the bus (I bike everywhere), not eating at restaurants and generally doing things like buying clothes rarely and cheaply. Though now I might get a new job, which will force me to either move or start taking the bus every day, either of which would increase my expenses.

It's a choice. you don't need to save 50% to be able to retire at normal retirement age. I prioritize getting to FI quickly and then I'll start increasing my expenses/cutting my hours. I like the thought of working less.
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RobLyons
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Re: What percentage of your paycheck do you invest?

Post by RobLyons »

Not enough! 8-12% pre tax and around 12-15% post, depending on EF levels... But I also have a pension to hopefully look forward to
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Aptenodytes
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Re: What percentage of your paycheck do you invest?

Post by Aptenodytes »

Code: Select all

Taxes      27%
Savings    16% (includes HSA)
Insurance   3%
Spending   54% (includes mortgage; don't consider it investment)
bck63
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Re: What percentage of your paycheck do you invest?

Post by bck63 »

38% of gross pay.
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Stef
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Re: What percentage of your paycheck do you invest?

Post by Stef »

How should you account for pension? Is it part of the savings rate?
mancich
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Re: What percentage of your paycheck do you invest?

Post by mancich »

About 40% of net pay, + max out 401ks/Deferred comp
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Schlabba
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Re: What percentage of your paycheck do you invest?

Post by Schlabba »

I don’t look at it as a percentage of income. Whatever sticks out over my emergency fund gets shipped off to the broker.
life in slices
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Re: What percentage of your paycheck do you invest?

Post by life in slices »

mbasherp wrote: Sun Apr 05, 2020 6:51 pm We work very (VERY, lately) hard to save 1/3 of gross among the different accounts available to us. I feel that is a good balance of living now and preparing for the future.

Threads like this remind me that we are not typical folks in this extremely high income community even though we are technically upper middle class. I can barely fathom what incomes are like for those who live on <10%!

As they say, comparison is the thief to joy.
We are the same, hard work but save about 1/3 Gross per year - have been working on that balance between saving and living as well, more so in last couple of years as the kids are transitioning out of college into their lives.

Like your quote as the end - i think I will sticky note that onto my monitor to remind me that we have made great improvement from where we were just 10 years ago
rallycap
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Re: What percentage of your paycheck do you invest?

Post by rallycap »

Married, mid 40s, with 3 young kids. We gross around $90,000. We normally invest about 15% towards retirement with my goal being to get to 20% (finally hit that mark this past year). We bought a house well below what we could afford, don't spend much on material things, and still putting away 20% is tough. This in addition to the fact that if we do hit the 20% mark, I try to put anything left over into the kids' 529 plans which at this point may pay for their books:) We also built up a 9 month emergency fund before doing any of this. You do the best you can.
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ThunderTurtle
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Re: What percentage of your paycheck do you invest?

Post by ThunderTurtle »

Normally about 18% to SEP-IRA
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22twain
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Re: What percentage of your paycheck do you invest?

Post by 22twain »

I'll provide some counterpoint to the high earners in BosWash, SanSan, etc. We were tenured professors at a generic small college (i.e. not a "little Ivy") in a small town in flyover country. LCOL area, no kids.

We both entered sort of phased retirement plans in 2011, caused by cutbacks in the wake of the 2008-09 financial crisis. In 2010, our last normal working year, my figures were as follows:

Gross pay: $59K
Elective deduction for 403(b) retirement plan: $16.5K
Employer contribution for 403(b), above gross pay: $4.5K

Percentages:
If you consider only my contribution and gross pay, $16.5K / $59K = 28%
If you consider both contributions and add the employer contribution to my gross pay: ($16.5K + $4.5K) / ($59K + $4.5K) = 33%

I had recently started to ramp up my contributions in anticipation of retirement, so these percentages aren't typical of my career. Before that, for example, my situation in 2000 was:

Gross: $49K
My contribution: $7.7K
Employer contribution: $4.3K

So the percentages in 2000 without and with employer contribution were 16% and 22% respectively.

My wife had similar pay. As our "frugal half", she generally saved more than I did overall. She preferred not to put it all in the 403(b). So I can't reconstruct how much she actually saved then, but I'm sure her total savings rate was comparable to mine in 2010, and probably larger than mine in 2000. (And of course now we each know what the other has, and where.)
Last edited by 22twain on Tue Apr 07, 2020 5:40 am, edited 1 time in total.
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ThunderTurtle
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Re: What percentage of your paycheck do you invest?

Post by ThunderTurtle »

ThePrince wrote: Sun Apr 05, 2020 10:44 pm
Triple digit golfer wrote: Sun Apr 05, 2020 7:58 pm Keep in mind, OP, that people with lower savings rates are less likely to respond.

15% is very respectable. Well above average.
+1
Very good points. 15% should be enough to maintain the same lifestyle in retirement for anyone who started sufficiently early.

Percentages are interesting but not very useful for comparison without knowing income (and lifestyle, obligations, etc.)
MathIsMyWayr
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Re: What percentage of your paycheck do you invest?

Post by MathIsMyWayr »

I don't know the exact percentage, somewhere around 30-60%. Max mega Roth 401(k), 403(b), and 457(b) all including over-50 catch-ups, ESPP, RSU, and some extra into taxable.
terran
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Re: What percentage of your paycheck do you invest?

Post by terran »

We're at the high end of the ranges posted here, but I just want to add another note for the OP to keep in mind that the people on this forum are the anomaly, and as others have said the people posting in this thread are probably an anomaly for people on this forum. Most people save practically nothing. I'd encourage you to try to push to 15% or maybe 20%, but if you can do that you'll be just fine. If at that point you decide that retiring early is more important to you than whatever else you can buy then push it further, but if you're happy working a total of 30-40 years then 15-20% is just fine.
CoAndy
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Re: What percentage of your paycheck do you invest?

Post by CoAndy »

I am currently doing:
3% to 401(k) with a 3% company match.
12% to 457.
3% Pension contribution.
Goal is to max out both the 401 and 457 by the end of next year. Getting ready to bump contributions to the 457 to 14% right now as I just got a small raise. :sharebeer
Triple digit golfer
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Re: What percentage of your paycheck do you invest?

Post by Triple digit golfer »

birdog wrote: Sun Apr 05, 2020 9:31 pm
Triple digit golfer wrote: Sun Apr 05, 2020 9:14 pm The MMM article is savings rate post tax. Wouldn't it differ depending on pre tax contributions and expenses?

Suppose $100k gross income.
$20k to pretax 401k for simplicity.
$10k to pretax medical premiums.
$15k to payroll and income taxes.
Take home pay is $55k.
Spend $45k of that.
Savings after tax is $10k (excludes $20k 401k)
I would say savings is $30k and 30% of gross. That's easy.

What about the MMM formula for net?
$10k out of $55k?
$30k out of $55k?
$30k out of $75k? (Denominator is net pay plus 401k)
The second footnote in the article:
** definition of take-home pay: gross income minus all taxes. Remember to add back in any 401k or other savings deductions to the paycheck you see, since these are really part of what you are “taking home” – you just happen to be saving it automatically.
Help me out with my number. These are approximate real numbers:

$158k gross income
-$28k taxes (payroll and federal/state withholding; includes withholding on 401k refund described below)
-$14k pretax insurance premiums
-$11k pretax 401k (I contribute $19.5k, but we do not have a safe harbor plan so a portion gets taxed and refunded to me and therefore "uncontributed")
=$105k take-home pay
-$70k expenses (not including taxes and pretax insurance premiums)
= $35k saved/invested to IRAs, taxable account, and 529 plan

$11k 401k plus $35k of take-home pay saved/invested = $46k total

Net pay = $158k gross less $28k taxes = $130k.

$46k/$130k = 35% of net pay savings rate

Do I have that right?
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birdog
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Re: What percentage of your paycheck do you invest?

Post by birdog »

Triple digit golfer wrote: Mon Apr 06, 2020 9:20 am
birdog wrote: Sun Apr 05, 2020 9:31 pm
Triple digit golfer wrote: Sun Apr 05, 2020 9:14 pm The MMM article is savings rate post tax. Wouldn't it differ depending on pre tax contributions and expenses?

Suppose $100k gross income.
$20k to pretax 401k for simplicity.
$10k to pretax medical premiums.
$15k to payroll and income taxes.
Take home pay is $55k.
Spend $45k of that.
Savings after tax is $10k (excludes $20k 401k)
I would say savings is $30k and 30% of gross. That's easy.

What about the MMM formula for net?
$10k out of $55k?
$30k out of $55k?
$30k out of $75k? (Denominator is net pay plus 401k)
The second footnote in the article:
** definition of take-home pay: gross income minus all taxes. Remember to add back in any 401k or other savings deductions to the paycheck you see, since these are really part of what you are “taking home” – you just happen to be saving it automatically.
Help me out with my number. These are approximate real numbers:

$158k gross income
-$28k taxes (payroll and federal/state withholding; includes withholding on 401k refund described below)
-$14k pretax insurance premiums
-$11k pretax 401k (I contribute $19.5k, but we do not have a safe harbor plan so a portion gets taxed and refunded to me and therefore "uncontributed")
=$105k take-home pay
-$70k expenses (not including taxes and pretax insurance premiums)
= $35k saved/invested to IRAs, taxable account, and 529 plan

$11k 401k plus $35k of take-home pay saved/invested = $46k total

Net pay = $158k gross less $28k taxes = $130k.

$46k/$130k = 35% of net pay savings rate

Do I have that right?
That's exactly how I'd figure it in your case.
MathWizard
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Re: What percentage of your paycheck do you invest?

Post by MathWizard »

I would encourage you to increase to at least 15% (counting match). The old 10% rule of thumb no longer holds.
You may need more than that, but that will get you to a point where you can adjust later in life if you need more
for retirement.

Many on this board will give very high figures, but if you are young, you have may have many expenses, and
a much smaller income, so don't beat your self up comparing your savings rate to theirs. Some likely had
high savings rates their whole working lives, but for many their rate probably rose as they were deeper into their career.

That was certainly true for me.

Initially, I put 15% in, counting the match. This was while paying off student loans, saving for downpayment.

After the school loans, I was paying a mortgage, and saving for college for my kids in a taxable account.
I started maxing ROTHs as well.

After the kids were out out college, I paid off the mortgage, and then started maxing all tax advantaged.
Now, that is 40%

I never earned more than $100K until my last child was just ready to graduate college.
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RootSki
Posts: 516
Joined: Mon Feb 20, 2017 11:52 am

Re: What percentage of your paycheck do you invest?

Post by RootSki »

I’ve never calculated it, but it’s greater than 60%. We do 50% pre-tax into our 401k’s until they max out. Almost everything gets invested post-tax that isn’t an expense. Fidelity MM SPRXX included in that even if it acts like cash.
Helo80
Posts: 1913
Joined: Sat Apr 29, 2017 8:47 pm

Re: What percentage of your paycheck do you invest?

Post by Helo80 »

Probably about 75% of my take home pay is invested in some form or fashion thru 401k, HSA, or taxable brokerage. I am in a unique position now where expenses are minimal and no debt. It will not always be like this, but might as well throw everything I can at stocks... Sure, it would have been better to save all this money and invest it over the last few weeks, but I'm not changing my investment schedule b/c of this downturn.
tigers174
Posts: 59
Joined: Sun Feb 03, 2019 3:24 pm

Re: What percentage of your paycheck do you invest?

Post by tigers174 »

Last year we managed to save ~45% on a single income family of 5. For this number I include 401k matching and the company cash balance contributions (6%). This covered maxing the 401k, 2 Roths, and HSA and some to 3 529s. I should be about there this year as well. This is on <$150k income. Historically we've averaged around 30% though.
Glockenspiel
Posts: 1139
Joined: Thu Feb 08, 2018 1:20 pm

Re: What percentage of your paycheck do you invest?

Post by Glockenspiel »

Around 30 percent invested in 401k's, HSA, Roth IRA, and Brokerage account. This past month had some cash sitting around that I put into the market, which would make the numbers for 2020 much larger than that, but I'm only counting recurring normal investments (not one-time investments).
Glockenspiel
Posts: 1139
Joined: Thu Feb 08, 2018 1:20 pm

Re: What percentage of your paycheck do you invest?

Post by Glockenspiel »

ThunderTurtle wrote: Mon Apr 06, 2020 7:37 am
ThePrince wrote: Sun Apr 05, 2020 10:44 pm
Triple digit golfer wrote: Sun Apr 05, 2020 7:58 pm Keep in mind, OP, that people with lower savings rates are less likely to respond.

15% is very respectable. Well above average.
+1
Very good points. 15% should be enough to maintain the same lifestyle in retirement for anyone who started sufficiently early.

Percentages are interesting but not very useful for comparison without knowing income (and lifestyle, obligations, etc.)
For comparison, I'm on my company's 401k committee, and in my company of fairly well-off engineers, the AVERAGE person in the company is saving only 8% of their income (not including the company match), in their 401k.
whereskyle
Posts: 1293
Joined: Wed Jan 29, 2020 10:29 am

Re: What percentage of your paycheck do you invest?

Post by whereskyle »

simplesauce wrote: Sun Apr 05, 2020 5:46 pm My family puts 10% of each paycheck into our investment accounts. We are looking to increase this to 15% moving forward. How about all of you?
If I earned more income, it would be a lot more. Limited income, so 10%. I consider that a minimum and I have been coming up with ways to invest more since the market is down.
"I am better off than he is – for he knows nothing and thinks that he knows. I neither know nor think that I know." - Socrates. "Nobody knows nothing." - Jack Bogle
LittleMaggieMae
Posts: 521
Joined: Mon Aug 12, 2019 9:06 pm

Re: What percentage of your paycheck do you invest?

Post by LittleMaggieMae »

22% goes to 401K (for the last 5 years) - I spent 10 years prior to that building up from a 10% contribution. I currently max an HSA (became available 4 years ago so just toughed it out and contributed the max). During that 10 year "buildup" phase I also managed to get to investing the max in a Roth as well. in 2019 I exceeded the income limits for the roth contribution (and I have 200K in a roll over IRA that I need to move to my 401K) so I'm not contributing to the roth - but I still invested the money in after tax stuff. I estimate I 'save' nearly 35% of my gross income for "retirement" or long term (greater than 5 years into the future).

My advice is that slow and steady wins the race. Come up with a plan - say increase your contributions by 2% per year (maybe when you get a raise). Come up with a plan for "windfalls" and "bonuses" - maybe do a 10% to fun money, 30% to some home improvement or medium term savings to spend goal and 60% to a retirement account. Time and consistent saving (with a plan) is your biggest most valuable resources. Use them wisely.
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teen persuasion
Posts: 1398
Joined: Sun Oct 25, 2015 1:43 pm

Re: What percentage of your paycheck do you invest?

Post by teen persuasion »

My paycheck: 80% (to max brand new SIMPLE IRA + catchup)
DH's paycheck: 30% to retirement + max HSA (12%?)
Plus max Roth IRAs (catchup) for both of us (20% of total?)

But back in 2008, I was SAHM, and we only saved 5% to DH's 401k (plus 5% match, for 10% total). When employer decided to cut the match, DH wanted to stop contributing. I tweaked his withholdings to double his contribution to make up for the lost match. When I saw I could do this with little OOP change to take home pay, and increases in refundable credits (with 5 kids at home then), I doubled it again. And again, as I found little cost savings or bills diminished (student loans paid off, etc). When the mortgage was paid off, I opened Roth IRAs for each of us. Bit by bit I've ramped up our savings rate over the past decade. Now we are pushing the max into my name, because I've had no employer option until just recently, to try to even the balance a bit. We'll never get even, as everything employer has been into DH's name til now, but there's a state tax incentive to two pots instead of one, so we are trying.
pedalincircles
Posts: 6
Joined: Thu Mar 15, 2018 10:23 am

Re: What percentage of your paycheck do you invest?

Post by pedalincircles »

After maxing out 401k, (2) 457b’s, (2) Roth’s, HSA and contributions to 529, extra $ to mortgage payments, a little to taxable....I think we’re at 35-40% savings rate.

We live in a VHCOL area with two young children. My wife and I like to think that we live comfortably but we probably seem extremely frugal compared to our peers.
kayakprof
Posts: 68
Joined: Thu Jul 26, 2018 2:46 pm

Re: What percentage of your paycheck do you invest?

Post by kayakprof »

I'm a teacher with two elementary age kids and a mortgage. Save 15% of gross plus a 7.5% match for retirement. Also max out my HSA. Having spent so much time on Bogleheads, I hope to max my 403b every year starting a year or two from now. There are other savings, but they are largely for emergency funds, big purchases, etc. With a dual income of approx $145k, it is tough to imagine saving 50%. But I'm not ruling it out in the future.
bogledogle
Posts: 377
Joined: Wed May 07, 2014 4:34 pm

Re: What percentage of your paycheck do you invest?

Post by bogledogle »

Jacobi wrote: Sun Apr 05, 2020 6:45 pm
dbadalam wrote: Sun Apr 05, 2020 6:43 pm
lowndes wrote: Sun Apr 05, 2020 6:36 pm
simplesauce wrote: Sun Apr 05, 2020 5:46 pm My family puts 10% of each paycheck into our investment accounts. We are looking to increase this to 15% moving forward. How about all of you?
Same as you: 10-15% of base pay. I’m all over the map with what I do with my annual bonus.
I’ll bet you guy were not expecting the kind of answers your getting in this thread.
Yeah, this is a rather elite and high-earning group we're talking to on this forum.
Or extreme savers :)
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