Poll

What is your lifetime savings rate?

0-10%
10-20%
20-30%
30-40%
40-50%
50-60%
60-70%
70-80%
80-90%
90-100%
100%+

Author Topic: How much of your lifetime earnings have you saved?  (Read 1527 times)

COEE

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How much of your lifetime earnings have you saved?
« on: December 02, 2017, 07:05:32 AM »
So a few days ago I stumbled onto the below Social (In)Security Administrations website and found that I could go request what I've made for every year of my life!  This brought up an interesting idea of calculating how much of my lifetime earnings I've saved.  I.E. How much is my net-worth compared to my total life time earnings?  The process takes approximately 30 minutes per person to get through all of the security screens on the website to actually get your statement.

Equation:
( Net-worth / Total lifetime income ) * 100 = Lifetime Savings

Please include any property you own and asset growth in your net-worth.  It IS possible to have saved more than you've made!

Between my wife and I we have saved about 34.8% of our lifetime earnings.

https://www.ssa.gov/myaccount/statement.html
« Last Edit: December 02, 2017, 10:23:31 AM by COEE »

sokoloff

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Re: How much of your lifetime earnings have you saved?
« Reply #1 on: December 02, 2017, 07:52:20 AM »
Does the SS site have your actual wages for the year, or only your actual wages subject to the FICA individual contribution limit?

COEE

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Re: How much of your lifetime earnings have you saved?
« Reply #2 on: December 02, 2017, 08:14:36 AM »
Does the SS site have your actual wages for the year, or only your actual wages subject to the FICA individual contribution limit?

Good question!  I'm pretty sure it's wages subject to social security taxes - so I'm pretty sure that's usually gross earnings for most people - pre-FICA, pre-tax deductible contributions.  If I remember right, I don't have a paystub handy to confirm.

terran

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Re: How much of your lifetime earnings have you saved?
« Reply #3 on: December 02, 2017, 08:39:42 AM »
Does the SS site have your actual wages for the year, or only your actual wages subject to the FICA individual contribution limit?

Good question!  I'm pretty sure it's wages subject to social security taxes - so I'm pretty sure that's usually gross earnings for most people - pre-FICA, pre-tax deductible contributions.  If I remember right, I don't have a paystub handy to confirm.

It will show income subject to Social Security tax, so for those over the limit you should look at the "Taxed Medicare Earnings" column as there is no limit on income subject to medicare tax.

Both will exclude deductions for things like health insurance and HSA contributions made through payroll deduction (in most cases).

zinnie

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Re: How much of your lifetime earnings have you saved?
« Reply #4 on: December 02, 2017, 09:00:03 AM »
More than 100% for our joint incomes, even if you add back in the items that aren't taxed for medicare. Yay growth!

I got kind of lucky with a house, too. If you remove that [since I don't really count home value in any of my own planning] it is more like 73%

RetirementInvestingToday

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Re: How much of your lifetime earnings have you saved?
« Reply #5 on: December 02, 2017, 09:34:21 AM »
I'm at 89.6%. 

Of my net-worth 60% has come from saving and 40% has come from investment return.
It took me 8.7 years to become FI.
Since I started keeping records my savings rate has been 83% of net earnings.
45 years of age, UK based (for now) and FI.  Will FIRE in mid-2018.  A lot more detail on my blog http://www.retirementinvestingtoday.com/

ACyclist

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Re: How much of your lifetime earnings have you saved?
« Reply #6 on: December 02, 2017, 10:03:37 AM »
I think we are at 67%, but I am very confused by how you come up with the amounts.

the_gastropod

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Re: How much of your lifetime earnings have you saved?
« Reply #7 on: December 02, 2017, 10:18:25 AM »
Well, it is December, so there's a full year's worth of wages not yet shown on the SS site, so I'm a little skewed. But sitting at 42% right now. Not bad, considering I've only been mustachin' for ~3 of my 13 working years.

COEE

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Re: How much of your lifetime earnings have you saved?
« Reply #8 on: December 02, 2017, 10:20:23 AM »
I think we are at 67%, but I am very confused by how you come up with the amounts.

1.  Determine your net worth, including your house. 
2.  Go the SSA website and download your report.  This report will include your yearly earnings for your entire life.
3.  Add up your yearly earnings to get your lifetime earnings
4.  Divide your lifetime earnings into your net worth and multiply by 100.  ( net worth ) / ( lifetime earnings ) * 100
5.  The result is your lifetime savings rate.

2Birds1Stone

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Re: How much of your lifetime earnings have you saved?
« Reply #9 on: December 02, 2017, 10:24:13 AM »
~57%

Not bad considering I'm 30 and investments have yet to appreciate significantly.
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sokoloff

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Re: How much of your lifetime earnings have you saved?
« Reply #10 on: December 02, 2017, 10:47:17 AM »
Interesting concept.

We're at about 75% (mid 40s, married, HCoL, somewhat frugal, but not excessively mustachian).

aspiringnomad

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Re: How much of your lifetime earnings have you saved?
« Reply #11 on: December 02, 2017, 01:18:33 PM »
There was a post here discussing this exact calculation a couple years ago. I believe it was by BlueHouse. Since then, I've kept track as part of my financial spreadsheet. Adding in this year's earnings to date, I'm currently at 87%. Not bad, but likely due as much to this bull market as to my savings rate.

Many of our salaries are above the FICA limit, so as noted already, use the Taxed Medicare Earnings plus this year's earnings to date as your denominator if you want to be as accurate as possible.

gimp

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Re: How much of your lifetime earnings have you saved?
« Reply #12 on: December 02, 2017, 06:12:13 PM »
Net worth includes appreciation (property, stocks, etc.) Does that count as "savings" when the appreciation was never income?

SpareChange

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Re: How much of your lifetime earnings have you saved?
« Reply #13 on: December 03, 2017, 10:45:54 AM »
Remember that employer 401k matches/contributions are not included in those SS earnings reports iirc.

Also, TFB recently did a piece on this kind of thing...

https://thefinancebuff.com/wealth-conversion-efficiency-adjusted-for-inflation.html

PoutineLover

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Re: How much of your lifetime earnings have you saved?
« Reply #14 on: December 05, 2017, 11:45:40 AM »
At 26 I'm at 12% but to be fair my education did cost about half of my earnings so far, so I'll catch up soon.

moof

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Re: How much of your lifetime earnings have you saved?
« Reply #15 on: December 05, 2017, 12:04:17 PM »
I come up with 45% at age 40, but I did have to estimate my wife's lifetime earnings, so it is a bit of a wag.

simonsez

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Re: How much of your lifetime earnings have you saved?
« Reply #16 on: December 05, 2017, 12:44:07 PM »
Couldn't do it officially due to credit freeze but I'd estimate I'm around 15-20%.

BTDretire

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Re: How much of your lifetime earnings have you saved?
« Reply #17 on: December 05, 2017, 12:47:13 PM »
I have to say, I'm reluctant to post,

Because, I have an unfair advantage, in that we have had 36 years of saving and growing and growing...
 By your formula, 150%, gulp!

COEE

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Re: How much of your lifetime earnings have you saved?
« Reply #18 on: December 10, 2017, 08:04:41 PM »
Well, look at that nice Gaussian distribution!  Well, except for those that have actually reported more than 100%!  I'd be interested to know if that's just a age thing, as BTDretire reports, or perhaps lucky investments, inheritances, whatever.

I wonder how this would differ amongst the non-mustachian crowd.  Perhaps I'll post this in another forum I frequent and share results between the two at a later time.  I think the crowd there is a bit older though - so it might not be a good correlation.

As far as "rules" for calculations if anyone else wants to contribute.  I purposely tried to not make too many rules.  I didn't want to spend weeks figuring out our lifetime savings rate, I just wanted to get in the ballpark - I'm hoping you don't spend too much time thinking about this either.  It's just a bit of fun.

BTDretire

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Re: How much of your lifetime earnings have you saved?
« Reply #19 on: December 11, 2017, 06:16:55 PM »
 Since the question is percent of income vs savings, the only way income matters is because you could live on a lower percentage and save more. Saving grow quicker.
 Luck in the stock market, I think that will somewhat even out, lucky one year not so good the next. I think most will have average market returns.
 Some will have inheritances, mostly small.
I'm sure you have read, "it's time in the market not timing the market" well time in the market
you get by being older. You get more doubles.
 I have a good chunk of money in the market and from 1-1-11 to 1-1-17 it doubled, some from saving, but a lot from market growth. On average every year it grew twice what our income is.
I'm anticipating 1-1-18 when I plan on logging my NW again.

rantk81

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Re: How much of your lifetime earnings have you saved?
« Reply #20 on: December 11, 2017, 06:46:28 PM »
Well, look at that nice Gaussian distribution!  Well, except for those that have actually reported more than 100%!  I'd be interested to know if that's just a age thing, as BTDretire reports, or perhaps lucky investments, inheritances, whatever.

I wonder how this would differ amongst the non-mustachian crowd.  Perhaps I'll post this in another forum I frequent and share results between the two at a later time.  I think the crowd there is a bit older though - so it might not be a good correlation.

As far as "rules" for calculations if anyone else wants to contribute.  I purposely tried to not make too many rules.  I didn't want to spend weeks figuring out our lifetime savings rate, I just wanted to get in the ballpark - I'm hoping you don't spend too much time thinking about this either.  It's just a bit of fun.

As a reference point, I'm 36 and my NW is over 100% of my lifetime W-2 earnings.  I think this is pretty impressive since I'm still relatively young  my largest expenses have been taxes (which I can't invest and I can't live off of for paying my living costs either ... LOL)

I couldn't use the SSA website data because most of my recent years have been above the SS contribution limit.  I have kept copies of all of my tax forms (including W-2's) since I graduated from college though.

Yeah, I'm pretty close to FI (probably already am... but the questions about health care costs in the future is what is keeping me working now-- at least until my stash is "ridiculous" I suppose...)

Dicey

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Re: How much of your lifetime earnings have you saved?
« Reply #21 on: December 11, 2017, 07:16:38 PM »
No idea, no way to calculate accurately. Do i count my employer's match, market gains, RE appreciation? Five years post-FIRE, with lots of mistakes along the way. Just keep plugging away at it, you'll get there.
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