Author Topic: Whats your savings rate?  (Read 5616 times)

I'm a red panda

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Whats your savings rate?
« on: August 24, 2015, 04:12:44 PM »
I just had a swagbucks survey about savings.

One of the questions was about monthly retirement savings, as a percentage of gross salary.

The choices:
-Less than 2%
-2-4%
-More than 4%.

So, the 25% I put into my 403b and IRA each month would go in that last option.  Doesn't seem too descriptive.  (The idea of a 60% overall savings rate would probably baffle whoever developed this question!)

EricP

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Re: Whats your savings rate?
« Reply #1 on: August 25, 2015, 08:14:39 AM »
So my options are

"Really never being able to retire on my own terms"

"Never being able to retire on my own terms" and

"Probably never being able to retire on my own terms"

LoL

I'm a red panda

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Re: Whats your savings rate?
« Reply #2 on: August 25, 2015, 08:37:15 AM »
Well, at least mine did have a valid answer. Just not a very descriptive one.


Although I do always answer that I worry a lot about retirement.  I mean, the worry probably isn't valid- but it does weigh on me quite a bit.

Kaspian

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Re: Whats your savings rate?
« Reply #3 on: August 25, 2015, 12:56:57 PM »
(The idea of a 60% overall savings rate would probably baffle whoever developed this question!)

When I put my 55% savings rate into my bank's "retirement calculator", I break it.  It give totally whacky result.  (Apparently nobody's supposed to save that much.)

DCKatie09

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Re: Whats your savings rate?
« Reply #4 on: August 25, 2015, 01:02:04 PM »
(The idea of a 60% overall savings rate would probably baffle whoever developed this question!)

When I put my 55% savings rate into my bank's "retirement calculator", I break it.  It give totally whacky result.  (Apparently nobody's supposed to save that much.)

The worst is when calculators won't let you set a retirement expense level at less than 80% of your current salary (but guys, my current expense level is only half my current salary!)

zephyr911

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Re: Whats your savings rate?
« Reply #5 on: August 25, 2015, 01:05:38 PM »
The worst is when calculators won't let you set a retirement expense level at less than 80% of your current salary (but guys, my current expense level is only half my current salary!)
Because boredom will cause you to immediately increase spending on entertainment? ;)

Kaspian

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Re: Whats your savings rate?
« Reply #6 on: August 26, 2015, 10:08:58 AM »
The worst is when calculators won't let you set a retirement expense level at less than 80% of your current salary (but guys, my current expense level is only half my current salary!)
Because boredom will cause you to immediately increase spending on entertainment? ;)

But sadly, this 80% expense "clamp" may be keeping people from thinking about early retirement or even retirement at all.  My whole working career I put away the recommended 15-20% and actually intentionally blew the rest--usually on travel.  That whole time I thought I was being a savings rock star.  Something made me think that's what you're supposed to do.  I remember times when I had tons of extra money, vacation days to use at work, and went on a trip I wasn't too excited about just to blow off some cash.  I eventually boosted savings to 20%.  ...Then I found this site in 2012 and after 5 minutes of reading articles instant hindsight screamed:  "What in the name of FUCK have you been doing all these years, you dumbass?!!!"
« Last Edit: August 26, 2015, 10:18:31 AM by Kaspian »

zephyr911

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Re: Whats your savings rate?
« Reply #7 on: August 26, 2015, 10:55:06 AM »
But sadly, this 80% expense "clamp" may be keeping people from thinking about early retirement or even retirement at all.  My whole working career I put away the recommended 15-20% and actually intentionally blew the rest--usually on travel.  That whole time I thought I was being a savings rock star.  Something made me think that's what you're supposed to do.  I remember times when I had tons of extra money, vacation days to use at work, and went on a trip I wasn't too excited about just to blow off some cash.  I eventually boosted savings to 20%.  ...Then I found this site in 2012 and after 5 minutes of reading articles instant hindsight screamed:  "What in the name of FUCK have you been doing all these years, you dumbass?!!!"
How could you possibly do any worse? Oh, I know: actually believe that saving as much as possible is a great idea, but not care enough about yourself to actually do it. *stares at the floor*
Yeah, we all start from where we are.
I think 80% is a reasonable baseline for some people, but they should of course be encouraged to build their own scenarios using higher or lower numbers based on their goals.

wenchsenior

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Re: Whats your savings rate?
« Reply #8 on: August 26, 2015, 11:16:04 AM »
The worst is when calculators won't let you set a retirement expense level at less than 80% of your current salary (but guys, my current expense level is only half my current salary!)
Because boredom will cause you to immediately increase spending on entertainment? ;)

But sadly, this 80% expense "clamp" may be keeping people from thinking about early retirement or even retirement at all.  My whole working career I put away the recommended 15-20% and actually intentionally blew the rest--usually on travel.  That whole time I thought I was being a savings rock star.  Something made me think that's what you're supposed to do.  I remember times when I had tons of extra money, vacation days to use at work, and went on a trip I wasn't too excited about just to blow off some cash.  I eventually boosted savings to 20%.  ...Then I found this site in 2012 and after 5 minutes of reading articles instant hindsight screamed:  "What in the name of FUCK have you been doing all these years, you dumbass?!!!"

This is TOTALLY how I felt about 4 years ago when I started to seriously consider things. We started saving about 10 years later than average, and yet I still went a decade thinking 15-20% was badass. I want to retroactively facepunch myself starting in year 2002, right after we got stable adult lives started and could have really focused hard on value-for-dollar and savings. But noooo...I had to live like what I perceived the 'average adult professional American' did for a few years (ok, about 8 years) before it started to dawn on me how much we were sucking.

powersuitrecall

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Re: Whats your savings rate?
« Reply #9 on: August 26, 2015, 12:56:13 PM »
...

But sadly, this 80% expense "clamp" may be keeping people from thinking about early retirement or even retirement at all.  My whole working career I put away the recommended 15-20% and actually intentionally blew the rest--usually on travel.  That whole time I thought I was being a savings rock star.  Something made me think that's what you're supposed to do.  I remember times when I had tons of extra money, vacation days to use at work, and went on a trip I wasn't too excited about just to blow off some cash.  I eventually boosted savings to 20%.  ...Then I found this site in 2012 and after 5 minutes of reading articles instant hindsight screamed:  "What in the name of FUCK have you been doing all these years, you dumbass?!!!"

Another dumbass checking in here.  We had the above average 20% thing going on for a while.  It wasn't until we purchased a house and stared down the barrel of 25 years of payments for us to realize that we could do much better.  We slowly increased our savings rate and started killing the mortgage and investing.  I'm sure part of me realized that we could have been doing better, but we were too busy patting ourselves on the back for hitting the ridiculously low bar set by society. 

jinga nation

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Re: Whats your savings rate?
« Reply #10 on: August 26, 2015, 02:32:46 PM »
Most Mustachians are statistical outliers on mass market financial surveys.

A mustachian survey on savings would have categories of 10-14.99%, 15-19.99%, etc. Anything below 10% would be considered spendypants.

markbike528CBX

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Re: Whats your savings rate?
« Reply #11 on: August 26, 2015, 08:24:44 PM »
Are extra mortage principle payments included in savings rate?

When the mortgage is paid off, the former extra mortage principle payments will become investible savings.

ender

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Re: Whats your savings rate?
« Reply #12 on: August 27, 2015, 06:00:00 AM »
(The idea of a 60% overall savings rate would probably baffle whoever developed this question!)

When I put my 55% savings rate into my bank's "retirement calculator", I break it.  It give totally whacky result.  (Apparently nobody's supposed to save that much.)

The worst is when calculators won't let you set a retirement expense level at less than 80% of your current salary (but guys, my current expense level is only half my current salary!)

We have a credit union onsite and I talked with the person there for a retirement analysis (have the followup next week which might result in an anti-Mustachian post of my own) and he was trying to convince me that I needed like $5k or $6k a month in retirement income. Plus figuring in some of that will be taxed, apparently no one can take advantage of tax advantaged planning to nearly minimize taxes in retirement.

The only way we're paying significant taxes in retirement is if either we way oversave and have huge RMDs/withdrawals or the tax rates become much less progressive.

Butterfingers

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Re: Whats your savings rate?
« Reply #13 on: August 27, 2015, 06:22:52 AM »
When I put my 55% savings rate into my bank's "retirement calculator", I break it.  It give totally whacky result.  (Apparently nobody's supposed to save that much.)

The UK government-funded Money Advice Service has a pension calculator. The earliest retirement age you can enter is 55. Not a tool with mustachians in mind.

zephyr911

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Re: Whats your savings rate?
« Reply #14 on: August 28, 2015, 12:26:21 PM »
Are extra mortage principle payments included in savings rate?
Yes. Two ways of looking at it: #1, you're not spending that money. #2, it is increasing your net worth.
For some types of FIRE calculations, home equity is not counted because it doesn't produce income. However, as a component of your total SR% it's totally valid.

markbike528CBX

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Re: Whats your savings rate?
« Reply #15 on: August 28, 2015, 01:58:55 PM »
zephyr911:  thanks.   
 I wasn't sure, since it is debt paydown.
 OTH, it is part of my real estate investments.
Our house is not spendypants, but bigger than we probably need, so I havent included the regular mortgage payments.

BTW, your picture shows the biggest filters I've ever seen on a half-face mask.
Whats that for?

before I enlarged it to look, I assumed it was a "Dr. Zoidberg" mask.

mohawkbrah

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Re: Whats your savings rate?
« Reply #16 on: August 29, 2015, 02:29:12 AM »
i demand an 80% option!