What is the average savings rates for bogleheads?

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Havoner
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What is the average savings rates for bogleheads?

Post by Havoner »

So lots of different ways of calculating this I am sure but just to keep it consistent would like to hear what people's savings rates are as a percentage of net pay after taxes. Mine averages about 25%-35% depending on bonuses and expenses. Would like to collect some rough data from the group but please feel free to share if there has been a survey or something similar in the past that collects this.

What sort of rate do you normally have?
Has it varied that much over the years or been fairly consistent?
Do you regret having too much of one and not enjoying more or saving too little and wish you had put back more?
Marseille07
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Re: What is the average savings rates for bogleheads?

Post by Marseille07 »

Mine's around 60~70%. It's been consistent, and probably too high but I struggle to find something to spend money on.

Thinking about attending some sports games, but seeing packed stadiums / arenas gives me pause as I don't think we're out of the woods yet.
TSWNY
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Re: What is the average savings rates for bogleheads?

Post by TSWNY »

We are around 30%'ish. We could save more, but we are young, in the two comma club and have 2 pensions and paid health care in our future, so we try and not deny ourselves too many things.
SnowBog
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Re: What is the average savings rates for bogleheads?

Post by SnowBog »

If you are saving 15%+ of "gross" (pre-tax) income - you are likely doing far better than most people. (Not necessarily those found on BH, but most people in general.)

But I think it ultimately comes down to #1 (Develop a workable plan): https://www.bogleheads.org/wiki/Boglehe ... philosophy

If your "plan" includes "early retirement" - you'll likely need to save a much higher %. If your "plan" is lucky enough to have pensions & social security, and a stable job such that you can "delay" retirement date as long as you want - you can probably save a lesser %.

Some of the best advice I've seen on BH recommends finding a "balance." You don't want to sacrifice everything for a tomorrow that isn't guaranteed, just like you don't want to sacrifice your future just to live in the moment. Find a way to do both at the same time - and enjoy life throughout! (I'm still trying to find that balance myself...)
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MrBobcat
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Re: What is the average savings rates for bogleheads?

Post by MrBobcat »

It's varied so much dependent upon age, kids (expenses) and income over the years I don't even know if my current average can even come close to representing the average over time.

20's - 30's probably around 10% (talking 2-5K/year)
40's got up to 25% (around 20-30Kish/year)
50s 45-50% (around 90-95k/year)
pasadena
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Re: What is the average savings rates for bogleheads?

Post by pasadena »

So in % of net, how do you count pre-tax savings like 401(k) or HSA?

If so, assuming my projections for the rest of the year are correct, I will have saved just shy of 70% of my net income (salary, net RSU, net ESPP discount). Obviously that doesn't include 401(k) and HSA, neither as income nor as savings.

Taking everything into account, I will have saved about 50% of my gross income (salary, 401(k) match, HSA employer contribution, gross RSU, gross ESPP discount), and expect to give about 30% to Uncle Sam (Income tax and FICA), and the rest is spending.

But I'm a late stater, trying to catch up and retire early. This will clearly be my highest rate, ever. I have tried to keep my spending fairly constant over the years. It's gone up due to housing costs, but not as much as my income has.

I regret no saving anything before I moved here at 38 years old. I do not regret saving this much now, because I think I've found the right balance between current Me and future Me. It took a fair amount of trial and error, but I've found what makes me happy, and I'm very thankful that my income is now higher than I need it to be to enjoy myself.
Doctor Rhythm
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Re: What is the average savings rates for bogleheads?

Post by Doctor Rhythm »

Fairly facile to save 30% of a six-figure income. Quite challenging to do so on a median American salary. Unless you know the denominator, the percentages aren’t very useful for comparison to your personal situation.

Also, this is Bogleheads - so we’re really atypical. It would be like going to a Dave Ramsey-esque forum and asking how much credit card debt people have to see if your situation is acceptable.
Joey Jo Jo Jr
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Re: What is the average savings rates for bogleheads?

Post by Joey Jo Jo Jr »

About 2/3 net of tax since getting married a decade ago. Unfortunately I don’t make nearly what many of the people who post on here seem to. Also largely missed out on quite a bull market while paying off the house, which is why I came here to try to learn about investing. Anyway, would like to spend more on vacations but don’t really have people to take care of the kids.
runner540
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Re: What is the average savings rates for bogleheads?

Post by runner540 »

~33%, excluding matching and mortgage principal (30s, kids, house)
Reduced saving recently due to inflation on key expenses (food and childcare) and intentional lifestyle inflation.
Pre kids, pre house, with good bonus, it was 45-50%

Hope to increase saving rate again in 5 years after childcare expense drops and growth in compensation.
fatcoffeedrinker
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Re: What is the average savings rates for bogleheads?

Post by fatcoffeedrinker »

85% savings of net income after taxes. Expenses include healthcare deducted from pay.

Works out to around 53% of gross.

It's gone up over time as comp increased and expenses went down after mortgage was paid off.

No regrets. Retiring end of next year at 54.
Last edited by fatcoffeedrinker on Sat Jul 24, 2021 12:19 am, edited 2 times in total.
PackersFan12
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Re: What is the average savings rates for bogleheads?

Post by PackersFan12 »

About 30% pre-tax.
pasadena
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Re: What is the average savings rates for bogleheads?

Post by pasadena »

Doctor Rhythm wrote: Fri Jul 23, 2021 11:32 pm Fairly facile to save 30% of a six-figure income. Quite challenging to do so on a median American salary. Unless you know the denominator, the percentages aren’t very useful for comparison to your personal situation.

Also, this is Bogleheads - so we’re really atypical. It would be like going to a Dave Ramsey-esque forum and asking how much credit card debt people have to see if your situation is acceptable.
+1
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pokebowl
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Re: What is the average savings rates for bogleheads?

Post by pokebowl »

Havoner wrote: Fri Jul 23, 2021 10:28 pm What sort of rate do you normally have?
Has it varied that much over the years or been fairly consistent?
Do you regret having too much of one and not enjoying more or saving too little and wish you had put back more?
Over the last 5 years (where I have good data) its bounced between 55-65%.

I have not made any lifestyle sacrifices to achieve this rate, I've instead opted to obtain jobs in locations of interest versus traveling for only weeks at a time. So I've gotten my "travel" in while young and also set myself up for FIRE for later in life. :beer
Strifey
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Re: What is the average savings rates for bogleheads?

Post by Strifey »

Net is a little tricky because of taxes (gross would be easy to estimate over past 10+ years) so I only looked at last 4 years of tax returns, but my total contributions of net have been 60%, 70%, 64%, and 70% the past 4 years. Seems a bit misleading because I max out my 401K and HSA so that's going to pump the net % higher, but I definitely live way below my means and haven't changed my lifestyle much as I've progressed in my career.

On one hand I know I over save, but at the same time don't really feel like I get satisfaction on spending on frivolous stuff either (my hobbies are generally cheap). I've actually forced myself to have a "reverse budget" bucket this year to get me to spend a bit on stuff that I may like but can't actually ever get myself to pull the trigger on.

I don't really regret anything because I'm only 36 and I think the amount I saved in my 20s and early 30s has set me up in a good spot for my future. I still have time to do things I want to and increase my spending as necessary now that I have a good baseline.
DonFifer
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Re: What is the average savings rates for bogleheads?

Post by DonFifer »

I'm collecting SS, 2 non-cola pensions and working full time. Having 85% of my paycheck going into the 401K plus whatever I can afford from guaranteed income. Averages out to 71.1%
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22twain
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Re: What is the average savings rates for bogleheads?

Post by 22twain »

Havoner wrote: Fri Jul 23, 2021 10:28 pm just to keep it consistent
Are you in one of the coastal megaburbs or in the wilds of flyover country?
It's "Roth", not "ROTH". Senator William Roth was a person, not an acronym.
Nivek
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Re: What is the average savings rates for bogleheads?

Post by Nivek »

Not including bonus and options, I save 53% after tax. For the most part, I save any gains from options although some years we’ve used it to buy a car or put in our pool. On average, we save all of my bonus 2 out of every 3 years. This year it’s been used to buy my dream car. Previous 3 years, 100% saved.
Last edited by Nivek on Sat Jul 24, 2021 4:13 am, edited 1 time in total.
fatcoffeedrinker
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Re: What is the average savings rates for bogleheads?

Post by fatcoffeedrinker »

Nivek wrote: Sat Jul 24, 2021 4:03 am This year it’s been used to buy my dream car.
Do tell.
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Re: What is the average savings rates for bogleheads?

Post by namajones »

Marseille07 wrote: Fri Jul 23, 2021 10:54 pm Mine's around 60~70%.
So is mine.
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Re: What is the average savings rates for bogleheads?

Post by namajones »

Doctor Rhythm wrote: Fri Jul 23, 2021 11:32 pm Unless you know the denominator, the percentages aren’t very useful for comparison
Agree with this. Not sure what the point of this exercise is.
Nivek
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Re: What is the average savings rates for bogleheads?

Post by Nivek »

fatcoffeedrinker wrote: Sat Jul 24, 2021 4:08 am
Nivek wrote: Sat Jul 24, 2021 4:03 am This year it’s been used to buy my dream car.
Do tell.
Probably shouldn’t have worded it that way, it’s a 2021 Mercedes 350 GLE. Both my wife and I have always been frugal when it comes to cars, kept them at least 10 years, mostly all Honda’s. I’ve progressed rather nicely in my career which involved at the time meeting customers and associates who worked for me out in the field and people show up in their Mercedes. BMW, Porsche and I roll up in my Honda CRV. I never bothered me because I knew what I had in the bank but I did want to splurge on a luxury car at least once before I retire. I’m loving it too. My wife is looking at a Tesla now after her 24 years of minivans (2 Honda Odyssey.s - man, those vans can and did taking a beating and kept on chugging along).
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Re: What is the average savings rates for bogleheads?

Post by fatcoffeedrinker »

Nivek wrote: Sat Jul 24, 2021 4:23 am
fatcoffeedrinker wrote: Sat Jul 24, 2021 4:08 am
Nivek wrote: Sat Jul 24, 2021 4:03 am This year it’s been used to buy my dream car.
Do tell.
Probably shouldn’t have worded it that way, it’s a 2021 Mercedes 350 GLE. Both my wife and I have always been frugal when it comes to cars, kept them at least 10 years, mostly all Honda’s. I’ve progressed rather nicely in my career which involved at the time meeting customers and associates who worked for me out in the field and people show up in their Mercedes. BMW, Porsche and I roll up in my Honda CRV. I never bothered me because I knew what I had in the bank but I did want to splurge on a luxury car at least once before I retire. I’m loving it too. My wife is looking at a Tesla now after her 24 years of minivans (2 Honda Odyssey.s - man, those vans can and did taking a beating and kept on chugging along).
She'll love the Tesla. My M3 is the best car I've owned (not to turn thus into a car thread). Enjoy.
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dogagility
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Re: What is the average savings rates for bogleheads?

Post by dogagility »

About 40% of net pay in our 50s. Our savings rate was significantly less when our kids were younger and we made less money, but I don't know the figure.
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Re: What is the average savings rates for bogleheads?

Post by grsharky »

For us it depends on the year and what is going on in our lives. Last year we saved quite a bit due to not going out as much or traveling, however this year we've started to get back to normal and that means spending more money. For our retirement I shoot for 20% of our gross pay for the year. If we can get above that, great! If we don't, but still hit 15% I'm satisfied. We also save for our son's 529 account as well. So I'd say all told, around 25% per year on average.
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Re: What is the average savings rates for bogleheads?

Post by KlangFool »

OP,

I save 1 year of expense every year. Saving rate based on income is useless.

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Re: What is the average savings rates for bogleheads?

Post by aristotelian »

Started with 15% at the beginning of my career. Have gradually worked up to 50-60%, basically by keeping the same lifestyle and investing any raises.
lurkman
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Re: What is the average savings rates for bogleheads?

Post by lurkman »

KlangFool wrote: Sat Jul 24, 2021 6:52 am OP,

I save 1 year of expense every year. Saving rate based on income is useless.

KlangFool
Do you mean 1 year of projected retirement expenses or current expenses? Or are they about the same?
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Re: What is the average savings rates for bogleheads?

Post by runner3081 »

Hmm, never calculated savings as a percent of "net" pay before.

Doing some quick math, we are at 83% savings of net pay. Have been at this level for at least the last 5-years.

This comes out to 71% of gross.

We started at probably 5-10% at the beginning and have slowly ratcheted it up. Really started saving money at about 30 years old.

If anything, have deflated lifestyle with older cars, moved to a bigger house (but with a lower cost of living - so ended up saving 50K to go from 1200 to 1900 square feet. Meanwhile, pay has gone up). Spending is very low for a family of 3 and has not changed in the last 5-years.
Last edited by runner3081 on Sat Jul 24, 2021 7:11 am, edited 1 time in total.
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Re: What is the average savings rates for bogleheads?

Post by anon_investor »

KlangFool wrote: Sat Jul 24, 2021 6:52 am OP,

I save 1 year of expense every year. Saving rate based on income is useless.

KlangFool
I tend to agree, especially since many people have variable income, like bonuses. Personally my annual bonus is variable and I save 100% of it after taxes, so my savings % differs year to year. This year I am on pace to save over 1.2x annual expenses (this includes 401k employer contribution).
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Re: What is the average savings rates for bogleheads?

Post by Somethingwitty92912 »

Havoner wrote: Fri Jul 23, 2021 10:28 pm So lots of different ways of calculating this I am sure but just to keep it consistent would like to hear what people's savings rates are as a percentage of net pay after taxes. Mine averages about 25%-35% depending on bonuses and expenses. Would like to collect some rough data from the group but please feel free to share if there has been a survey or something similar in the past that collects this.

What sort of rate do you normally have?
Has it varied that much over the years or been fairly consistent?
Do you regret having too much of one and not enjoying more or saving too little and wish you had put back more?
During my accumulation phase there was a time I had it up to 83%. Most of the time I was at 73%.
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Re: What is the average savings rates for bogleheads?

Post by dziuniek »

2018 - 17%
2019 - 19%ish
2020 - over 20% :twisted:
2021 - on track for 20%
2022 - planning for kiddo 3, so probably a 10% year.

Ours just varies a lot - life happens. The lowest we've gone is 10% and 25% was probably the highest.
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backofbeyond
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Re: What is the average savings rates for bogleheads?

Post by backofbeyond »

The answer has changed as my wealth increased. 30% to age 50, 20% from 50 to 57, & 0% +57 on

Orginally it was maxing out my Roth TSP (years ago Traditional TSP), then maxing out my wife and my Roth IRAs, then investing what was left over after taxes, healthcare and living expenses. We lived on 50% of my income over my career, wife rarely worked. So approx 30% savings.

Now that I've hit critical mass (FI), I still max my Roth TSP from my wages. However, I have excess taxable investments now so I sell some of those each year to fund our Roth IRAs. About 5 years ago, I set aside $20K a year (which increase with inflation annually) as a slush fund, mostly travel but also actities such as amuzement park tickets or wine festivals. So actual savings have dropped to 20%.

As Kangfool has wisely preached, when you hit FI, you don't even move the meter with your contributions, it's more to get the matching funds from your employer that keeps you doing it. Seems Odd after having such a high saving rate your entire career.

Another thing that seems rather odd when you hit FI, is that you move from offense to defense strategies. That is, you stop looking at portfolio going up due to increase equities, you look at it more like you don't need so much money because you have less years to live. Such as, when I hit 70, I will have cashflows from SS, FERS and wife annuities (small ones) that will equate to what my current annual salary is. And as stated above, we are used to living off of 50% of that. So in essence, my TSP and Roth IRAs only have to fund our lives from when I retire (current thinking is 57) to 70. That's a 13 year retirement window vs +30 years that is usually used to figure retirement needs. Which means a 4% withdrawal rate goes out the window. I'm looking at a 5.2% to get the job done, which all of the financial calculators stipulate has a 100% probablity of success. YMMV
The question isn't at what age I want to retire, it is at what income. - George Foreman
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Re: What is the average savings rates for bogleheads?

Post by ruralavalon »

I have no idea what the savings rate was.

I am now retired, we were a single earner household, we bought cars with cash savings, we lived fairly frugally, never had employer subsidized health insurance so I paid for our health insurance myself, and with four children paid college expenses out of income.

My income was extremely volatile, and our savings rate varied enormously just depending on my earnings and our necessary expenses at the time. After getting serious about investing (late 30s) we did contribute to investing regularly every pay period, whatever we could afford that month.

Some months that was zero because of large expenses that did not occur most months like biannual real estate taxes, biannual college tuition payments, and quarterly income tax payments.
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Re: What is the average savings rates for bogleheads?

Post by KlangFool »

lurkman wrote: Sat Jul 24, 2021 7:02 am
KlangFool wrote: Sat Jul 24, 2021 6:52 am OP,

I save 1 year of expense every year. Saving rate based on income is useless.

KlangFool
Do you mean 1 year of projected retirement expenses or current expenses? Or are they about the same?
I save 1 year of current annual expense every year. I save for Financial Independence. Not for retirement.

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Re: What is the average savings rates for bogleheads?

Post by TheNightsToCome »

Havoner wrote: Fri Jul 23, 2021 10:28 pm So lots of different ways of calculating this I am sure but just to keep it consistent would like to hear what people's savings rates are as a percentage of net pay after taxes. Mine averages about 25%-35% depending on bonuses and expenses. Would like to collect some rough data from the group but please feel free to share if there has been a survey or something similar in the past that collects this.

What sort of rate do you normally have?
Has it varied that much over the years or been fairly consistent?
Do you regret having too much of one and not enjoying more or saving too little and wish you had put back more?
I've only been tracking savings for 6 years, and the average ATAX rate is well over 80%. That's possible because I earn a substantial salary while living in a LCOL area with no mortgage or other debt, no dependents, and no disability or life insurance premiums.

I can't relate to the consensus that more spending = more enjoyment. I would enjoy life more if I lived in my hometown near my extended family, but that will have to wait for retirement.
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Re: What is the average savings rates for bogleheads?

Post by 59Gibson »

Over the last 22 years I've ranged from 15% of living expenses to 2.5X per year. Several years of 2-2.5x expenses is like a rocket launcher. Currently saving close to 0. :happy
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Re: What is the average savings rates for bogleheads?

Post by cbs2002 »

Edited after I noticed the question was about net, not gross, pay:

as high as 50% or so before kids.

As low as 0% after.

I expect it to be around 35% this year.

I include mortgage principal in savings rate as I don't plan to stay here for the rest of my life, home equity is a fungible (albeit terrible) investment, and I account for cost of residence as an expense that has be covered by my income.

Also, as others have said here and elsewhere, this seems completely irrelevant to retirement planning.
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Re: What is the average savings rates for bogleheads?

Post by H-Town »

Havoner wrote: Fri Jul 23, 2021 10:28 pm So lots of different ways of calculating this I am sure but just to keep it consistent would like to hear what people's savings rates are as a percentage of net pay after taxes. Mine averages about 25%-35% depending on bonuses and expenses. Would like to collect some rough data from the group but please feel free to share if there has been a survey or something similar in the past that collects this.

What sort of rate do you normally have?
Has it varied that much over the years or been fairly consistent?
Do you regret having too much of one and not enjoying more or saving too little and wish you had put back more?
Look up old threads, you’ll find a bunch of data there. But what are you going to do with this data? What decisions would come out of it?
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Re: What is the average savings rates for bogleheads?

Post by lurkman »

KlangFool wrote: Sat Jul 24, 2021 8:27 am
lurkman wrote: Sat Jul 24, 2021 7:02 am
KlangFool wrote: Sat Jul 24, 2021 6:52 am OP,

I save 1 year of expense every year. Saving rate based on income is useless.

KlangFool
Do you mean 1 year of projected retirement expenses or current expenses? Or are they about the same?
I save 1 year of current annual expense every year. I save for Financial Independence. Not for retirement.

KlangFool
What variability have you experienced in saving $$ when faced with changing life-stages or states?

E.g. when faced with college expenses, did you save 1 year of expense? Or when faced with unemployment for a year, I expect you did not save 1 year of current expense.

Have you tracked such variability?

I do think identifying years of expenses saved (for some assumed lifestyle) is a better metric to track rather than the more common savings rate as a % of income.
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Re: What is the average savings rates for bogleheads?

Post by delamer »

What do you include in savings and what do you include in taxes?

Retirement savings only or savings for all long-term goals, including college, vacation home, etc.?

Taxes can be income, Social Security and Medicare, mandatory employer withholding for a pension plan.
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Re: What is the average savings rates for bogleheads?

Post by ruralavalon »

Expenses like self-employment taxes, college tuition for children, mortgage payments, and real estate taxes suck up huge amounts from net income. So the percentage savings rate will vary greatly depending on the stage of life someone is in.
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Re: What is the average savings rates for bogleheads?

Post by KlangFool »

lurkman wrote: Sat Jul 24, 2021 8:59 am
KlangFool wrote: Sat Jul 24, 2021 8:27 am
lurkman wrote: Sat Jul 24, 2021 7:02 am
KlangFool wrote: Sat Jul 24, 2021 6:52 am OP,

I save 1 year of expense every year. Saving rate based on income is useless.

KlangFool
Do you mean 1 year of projected retirement expenses or current expenses? Or are they about the same?
I save 1 year of current annual expense every year. I save for Financial Independence. Not for retirement.

KlangFool
What variability have you experienced in saving $$ when faced with changing life-stages or states?

E.g. when faced with college expenses, did you save 1 year of expense? Or when faced with unemployment for a year, I expect you did not save 1 year of current expense.

Have you tracked such variability?

I do think identifying years of expenses saved (for some assumed lifestyle) is a better metric to track rather than the more common savings rate as a % of income.
lurkman,

What variability? When you save first and spend later, what is the variability?

1) For example, if you earn 120K per year and you auto-deduct 40K from your paycheck, you only have 80K of gross income to spend. You cannot spend what you don't have.

<<E.g. when faced with college expenses, did you save 1 year of expense?>>

2) I "Cash Flow" the college expense from my annual savings when my FI is fully funded.

<<Or when faced with unemployment for a year, I expect you did not save 1 year of current expense. >

3) Correct!

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Re: What is the average savings rates for bogleheads?

Post by stan1 »

Some people will count employer 401K contribution as part of their savings rate without adding the amount of the contribution to the denominator. Someone who wants to count Social Security as an asset would likely count FICA withholdings as savings. I expect many of us in our professional careers take credit for good metrics, so we've been trained to look for ways to find favorable metrics and feel good when we do (and get away with them in part because they make our bosses look good too). Multiple times in my career I've found a factor Y dragging down a metric, so I propose a new metric called "metric without Y". Bosses love it especially if someone else can be blamed for Y.

I am of the "be honest with yourself" camp and believe looking within at your own expenses is a better use of time than benchmarking with others whose situations are different (or who book income and expenses differently than you do).
WRH
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Re: What is the average savings rates for bogleheads?

Post by WRH »

I had never figured it using Net pay, but after some back of the napkin math out Net savings rate was ~26% in 2020. If everything continues as planned it should be over 30% in 2021. I anticipate this will drop in the future as we are planning to have kids before long! :sharebeer
nolesrule
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Re: What is the average savings rates for bogleheads?

Post by nolesrule »

How do you define saving?

You defined income for purposes of this discussion, but not saving.
FinancetoMD
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Re: What is the average savings rates for bogleheads?

Post by FinancetoMD »

Around 25% of pretax income for me
Nicolas
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Re: What is the average savings rates for bogleheads?

Post by Nicolas »

For most of my career I saved between 6-10%, I couldn’t afford more, and I always saved the maximum to get the full employer match, but as wealth increased and my mortgage disappeared I saved 50% in the latter years.
lurkman
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Re: What is the average savings rates for bogleheads?

Post by lurkman »

[quote=KlangFool post_id=6136660 time=1627136149

What variability? When you save first and spend later, what is the variability?

1) For example, if you earn 120K per year and you auto-deduct 40K from your paycheck, you only have 80K of gross income to spend. You cannot spend what you don't have.

[/quote]

Right. Everyone understands that. You save 40k through auto-deduct and have 80k to spend. Suppose now you have college expenses in addition to your usual expenses. You could probably trim some lifestyle expenses but you may still be stretched to accommodate college expenses and your usual expenses within the $80k. If this happens, then you can no longer save $40k that year. Such variations in expenses introduce variability.

You don’t see any variability in your life circumstances (having faced unemployment multiple times) to actually ask the question, “What variability?”

Variability in income, variability in expenses, variability in life circumstances all introduce variability in your ability to save 1 year of expense every year.
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retired@50
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Re: What is the average savings rates for bogleheads?

Post by retired@50 »

Havoner wrote: Fri Jul 23, 2021 10:28 pm So lots of different ways of calculating this I am sure but just to keep it consistent would like to hear what people's savings rates are as a percentage of net pay after taxes. Mine averages about 25%-35% depending on bonuses and expenses. Would like to collect some rough data from the group but please feel free to share if there has been a survey or something similar in the past that collects this.

What sort of rate do you normally have?
Has it varied that much over the years or been fairly consistent?
Do you regret having too much of one and not enjoying more or saving too little and wish you had put back more?
My answer is in this post: viewtopic.php?p=6079095#p6079095

I don't have any regrets about having a high savings rate. I never felt as if I was depriving myself of anything that mattered to me. I certainly do enjoy my early retirement.

Regards,
This is one person's opinion. Nothing more.
KlangFool
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Re: What is the average savings rates for bogleheads?

Post by KlangFool »

lurkman wrote: Sat Jul 24, 2021 9:35 am
KlangFool wrote: Sat Jul 24, 2021 9:15 am
What variability? When you save first and spend later, what is the variability?

1) For example, if you earn 120K per year and you auto-deduct 40K from your paycheck, you only have 80K of gross income to spend. You cannot spend what you don't have.
Right. Everyone understands that. You save 40k through auto-deduct and have 80k to spend. Suppose now you have college expenses in addition to your usual expenses. You could probably trim some lifestyle expenses but you may still be stretched to accommodate college expenses and your usual expenses within the $80k. If this happens, then you can no longer save $40k that year. Such variations in expenses introduce variability.

You don’t see any variability in your life circumstances (having faced unemployment multiple times) to actually ask the question, “What variability?”

Variability in income, variability in expenses, variability in life circumstances all introduce variability in your ability to save 1 year of expense every year.
lurkman,

1) When I am unemployed, I have no income. But, I spend the same amount.

2) When I am employed, I saved my expense first.

3) Except for college education funding, I have no variability in my expense.

<<variability in expenses, variability in life circumstances >>

4) So, what is your question?

A) I have no variability in expense except college expense.
B) I have no variability in life circumstances except for unemployment.

<<may still be stretched to accommodate college expenses and your usual expenses within the $80k.>>

5) My annual expense is about 50K to 60K per year. The college expense is either 30K per year (one kid) or 60K per year (two kid).

6) When one kid go to college, I spend 60K + 30K = 90K per year. I save 30K instead of my usual 60K per year.

7) When two kids go to college I spend 60K + 60K = 120K per year. I save nothing for that year.

KlangFool
Last edited by KlangFool on Sat Jul 24, 2021 9:48 am, edited 2 times in total.
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