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Old 12-16-2018, 03:03 AM
Location: RVA
2,172 posts, read 1,268,333 times
Reputation: 4470


Percentage of income is not a really relavent way to measure a savings amount or even success at savings. It just sounds good. If your 22, live at home, you could be making $20k/yr and saving 50%. Or you could be 55, make $200k/yr and only save 15%, so what is the point? No one lives on percentages. The only time it is relevant is if the number is zero or negative.

The idea is to have a goal amount in mind, which is dependent on your expected expenses, and sources of income. And as mentioned, you will be accused of bragging if you reveal actual numbers. Save as much as you can as early as you can and LBYM (live below your means). Pay your savings first and Ignore the amount saved as income. So when you stop working you have already established a level of income you are comfortable with instead of your total income, and between not paying into SS, lower taxes, and not having to save anymore, the lower income if retirement is manageable.

For someone with very little income, there is no choice. They may be living on a shoestring and have to use everything they earn. They have a much larger problem.

I’ve known a multi milionaire, net worth around $30M+, over 30 years. He was a very late, only child and by the time he was in his 20s, his (wealthy) parents had retired and were in their late 60s. They wanted him to live at home so he could accumulate wealth. He loved investing and learned from his father. He never left home. By the time he was more than ready, they wanted him to help with running their affairs , and later, health issues. When they died, he was left about $20M, plus very valuable RE. And he worked as an engineer until he was 60, same company, and retired with a healthy pension. He was once telling a few of us, who kew his situation, that amassing wealth is like a family hobby. He never married, has no children. When I asked him what was the point, he replied there really was no point. It was just fun to do. No one (except maybe his college) would accuse him of being generous. He’s never picked up a check at lunch, and not very charitable IMHO. He buys whatever he wants, and always the best, but it is relatively little. A new truck. A $3000 bicycle. He hikes a lot, so he does travel to places and is not anti social. He’s arranged to leave $10M to his alma mater, so he has lifetime premium suite seats to every game and event. He regularly gives his tickets to people he knows. Not really becaude he’s generous but because its a waste notnto use them. He’s not a well rounded person, IMHO, and if you met him with people you would never guess his worth in a thousand years. He brought a bag lunch to work every day. He occasionally has a girlfriend but has never found a like minded person that was not really more interested in his money. For some people saving and investing are very natural traits. Love of Money is not a root of evil for them any more than collecting seashells is. I’m glad I’m not him.
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Old 12-16-2018, 03:48 AM
71,669 posts, read 71,801,099 times
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i would even go a step farther and say , dollars and location are what matters . even the same dollars saved in two different cost of living areas can represent two different purchasing powers .

Last edited by mathjak107; 12-16-2018 at 04:52 AM..
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Old 12-16-2018, 06:05 AM
Location: Texas or Cascais, Portugal
3,422 posts, read 3,186,306 times
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I save 27% of my income for retirement and also pay for long term care insurance. You can never have too much more in retirement.
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Old 12-16-2018, 07:41 AM
3,579 posts, read 1,368,021 times
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17 percent in my tsp, I am 47. An additional 1 percent in post tax. I hope to raise it to 18 percent and 2 percent this year. My daughter is starting college soon so.....who knows then. We do have 50 k saved for that so, that will help.
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Old 12-16-2018, 07:44 AM
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Between the wife and I, we save 30% for retirement. Probably should be more but a person has to live now too.
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Old 12-16-2018, 11:05 AM
Location: The Berk in Denver, CO USA
14,046 posts, read 20,368,649 times
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Old 12-16-2018, 11:13 AM
Location: SW Florida
9,763 posts, read 7,043,834 times
Reputation: 14300
Originally Posted by Nae5150 View Post
Thanks everyone! I am mid 30s and have lowered my contribution temporarily because Im doing part time with a young family. I guess I need to ramp it back up when possible. Spouse is doing 10% now, and Im doing 5%. Many of my peers have less than what weve set aside. Perhaps we have time to catch up in a few years too. But a bit scary for many when its our time to retire.
Understandable, IMO, those unexpected expenses have an ugly way of popping up with a household and young family. The good thing is you're still saving, even if it's a reduced amount, and hopefully you can keep that up and not borrow against that retirement money you are saving.
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Old 12-16-2018, 11:41 AM
Location: The Ozone Layer, apparently...
1,906 posts, read 676,218 times
Reputation: 3955
I started saving in 40's and I know that is way late in the game but its the first time the opportunity presented itself and I took it. First I joined the Pension Plan offered. There was a contribution and Im not sure what the percentage was. It was a struggle with an entry level income but it was the whole point of working where I did - they offered a pension. All places I had worked prior did not. A couple of years later I joined the TDA offered at my job at just 2%. Each time I got a raise I increased the amount going into the TDA. I am now vested for my pension and health coverage, and still make a small contribution toward that. I hope to be able to retire by 2021 (please, God...), if not before then. I am currently at 17% going into the TDA (heavily conservative at this point) and thinking of going to 20% before long.

If someone can start young enough, and at 20% all along, I say do it. Most such funds also allow you to borrow against them (which I don't recommend, but its an option) and these benefits that are part of a company program can always be rolled into a private plan if you become separated from that employment.
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Old 12-16-2018, 11:43 AM
Location: Central IL
15,251 posts, read 8,543,297 times
Reputation: 35677
Originally Posted by ncguy50 View Post
I max out 401K and catch-up contributions, plus I pay a bit more on my mortgage to position myself to pay that off at retirement. That's the best I can do for now.
Answers like this are meaningless. If you only make $24k you won't be maxing anything out...If you make $150k then, big deal.
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Old 12-16-2018, 11:50 AM
26,128 posts, read 28,521,132 times
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Originally Posted by Nae5150 View Post
With increasing retirement/ healthcare costs, plus inflation, I am just wondering, what percentage of your monthly income have you set aside for savings? Also, how have you structured your retirement income? ie via SS, pension etc? I especially would like to know from those in their 50's above. Thanks.
I'm in 48, and am 'only' saving about 20% of my gross for retirement this year and will probably do around the same percentage next year as well. For most of the last 22 years I saved more than that, usually between 25% and 33% of my gross, although a lower percentage the first few years. Now, between building up a decent balance, a higher cost of living, and just wanting to live a little more in the present, I plan on saving a lower percentage of my income, at least for the next year.

That's on top of the 15% that's automatically taken out for my pension. The percentage taken out for the pension goes up pretty much every year, unfortunately. Back in the late 1990s, it was less than 5%, now it's over 15% and will likely go up some more.

I'm hoping to retire at 55 or 56 with about half my income from the pension and the other half from my investment portfolio from retirement accounts (457, Roth & Traditional IRAs). However, I also have a Plan B of moving to a cheaper area and living off a combination of my portfolio and a part time job until my pension kicks in at 55.

Last edited by mysticaltyger; 12-16-2018 at 12:35 PM..
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