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Correction: The US personal savings rate is currently in the 5% to 6% range. Still low. But if it had been at this level prior to the recession, the recession clearly wouldn't have been as bad. I think 6% is still kinda low. Ideally it should be around 10%.
I save about 25% of my gross (conservative estimate).
And no, I don't earn a huge gross salary (52K and likely to be cut because of public sector budget cuts). I live in the high cost San Francisco Bay Area. I don't get how people earning 40K or more can't save. It just doesn't compute for me.
You may be interested in this guy's blog. He became financially independent in 5 years living on around 40K to 50K a year and saving 75% of his gross.
He found ways to live on about $7000 per year, despite living in high cost California part of that time. He currently lives in an RV with his wife and works on projects that he is interested and on his timetable.
Close to 20% including college savings for the kids, we max our 401K to the allowed limit and 1 IRA, the rest is 529s. Not counting extra we're paying on our house though.
We save 15% based on 3400/mo gross which includes my ssdi income. We will be debt free in 8 months and house will be paid off in 3yrs. We don't take vacations or have new cars and manage fine. Once everything is paid off we plan on adding more excitement to our lives, and savings will increase to 30% since we will only have utilities and general expenses.
Saving + Investment percentage last year >60% minus cost of living expenditures. I spent very little money on things I didn't need. No dinners out at all. This year I am saving a similar percentage. At this time next year, however, I will most likely have a different job in another state, though.
Unless you're putting it in a 401-K or IRA, though there are limits on your contributions.
However,
If any part of these contributions is an excess contribution for 2009, it is subject to a 6% excise tax.
you can still make them.
I'm going to be honest, i have no idea what that means. 2009 was like 10 years ago, i dont pay enough attention to the taxes that are due in like.......30 days, crap.
I have 3% taken out for a simple IRA and i max out my wife and i's roth every year.
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