10, 10 and ......?

[PrincessPerky]

So supposing for the sake of nice simple rules of thumb you decide to send 10 to church and 10 to savings, do you also send 10 to retirement? or more, or is the 10 for savings retirement? (assuming you already are smart and have you EF at a 'perfect' level, whatver that may be for you)

Oh also assuming you are say 20 or 30 something, not 50 something.

[Aleta]

I have read that if one would start out putting aside 10% very early in life that they would be able to accumulate enough for retirement. You would have to start as soon as you start working. The later you wait, the larger %you have to contribute.

[Scanner]

Which to me begs the question:

Why not just bequeath 10% of your assets to the church upon passing (my plan) rather than tithing every week/month?

Is the Church any better steward of the money than me?

Why risk becoming a charity in the name of giving to charity?

Won't it work out to be the same if I bequeath let's say $100,000 at once rather than $100/month?

[disneysteve]

I think if you send 10% to retirement and 10% to other savings, you are doing well. As noted, that only works if you are young. Otherwise, 10% isn't nearly enough for retirement. Although, some of that other savings can be used for retirement too.

If you also choose to send 10% to your church, that would mean you were living on 70% of your income, well below your means, which should make retirement that much easier since you'll already be used to living at that level and you won't need to replace as much income. Once in retirement, you wouldn't need to save the 20% you are currently saving.

[Aleta]

disneysteve: When you say 70% are you talking after taxes? So many people are confused about that question. Some people look at their gross being their starting point of %'s and some say after tax.

In All Your Worth by Elizabeth Warren, she uses the after tax version. So, would you consider the 70% being part of the savings that you wouldn't be contributing anymore.

[disneysteve]

disneysteve: When you say 70% are you talking after taxes? So many people are confused about that question. Some people look at their gross being their starting point of %'s and some say after tax.

Personally, I go off gross. So if I earn 100K and say I'm saving 10%, I mean I'm saving 10K.

When figuring out your retirement needs, you need to keep in mind if your retirement income will be taxable (401K, traditional IRA), tax-free (Roth), or some combination of both. If it will be primarily taxable income, you will need a larger nest egg to meet your income goal.

[Gruntina]

I kind of get the feeling this question may have arise from a comment I have posted on another post. I will share what I have been up to.

I currently have my direct deposit to automatically put aside 10% for savings. This can be used for EF if I ever had to use it and build it up again but mainly it just something that I let builds up. (Prefer this in ING) It’s a pretty general fund although it’s not used for day too day living and normal yearly expenses as those are budgeted outside this 10% savings. (So far I have used some of this savings for my wedding that is happening in May of this year)

I currently contribute 10% towards my 401k with matching program. I am hoping to contribute to a Roth IRA soon but for some reasons I am putting this on hold.

I do tithe 10% pay. When I do my taxes at the end of year, I also give the church the amount I was deducted. I am able to afford the 10% tithe and this is one of my acts of worship and I like to do this in private at church and not in front of people. It is not the detail of accuracy or perfectionist of how much I contribute but that I am giving with a thankful heart. It is God's thinking of me is what counts and not what other people think. It is for that I might live my live abundantly, not because of fear or force of "punishment". I can not explain this exactly but I am content and I have joy since I have been doing this. This is enough for me to continue.

I still manage to live below my means with the other 70 percent. Probably because I grew up very poor with a very sick single parent mother. Also I spent the last 5 years paying off $60k debts and learned to live on less. Since my debts recently paid off of this year… I am now researching more on investment and what to do with my money now that I no longer have to focus on paying off debts. I still got tons to learn here.

I am age 30 years old. I regret for accumulating a large amount of debts from an awful marriage and naïve nature I used to have. If I think too much, I feel guilty for not saving as much as I could have and for losing so much money over bad decisions. On the bright side, I have turned my life over with new beginning and learning to make wiser choices with my finances. Now I am excited about my future. These last 5 years have really built my financial character and it was progress and not an overnight type of thing.

[PrincessPerky]

Which to me begs the question:

Why not just bequeath 10% of your assets to the church upon passing (my plan) rather than tithing every week/month?

For one thing because I 'use their services' every week.

Not only do I enjoy going to church and listening to the music (not a free sound system there) I enjoy learning from anothers view point on scripture each week (not free for dudes to spend all that time writing a sermon) and I enjoy the sunday school (supplies for kids not free) and I enjoy the hour break while my youngest is in 'nursery' part of church (that sermon I like to listen to) and my own Sunday school...while the staff is volunteer the supplies are not.

In short I aught to give more! I do not pay for all I get out of church every week! (not to mention the free wednesday night music for FMC, and the frequent other 'extras' again free)

Thank you for the view points, I was looking for a safe rule of thumb to give my kids...right now my savings and giving is based on what I have not what it aught to be...slowly working on switching over.

On pre or after tax I will prolly always percent (savings, retirement, or giving) after tax, cause I can't change the tax! though I often give some of the refund if any and usually send it to debt (once debt is gone I think savings is a good goal for it)

Gruntina, don't think to much! past is past, unless your thinking will help prevent the same thing in future generations don't worry about it. (and if you are trying to help, try to get the same good things in the kids...wasn't all bad, you are after all out of it- some never make it that far...)

[autoxer]

So supposing for the sake of nice simple rules of thumb you decide to send 10 to church and 10 to savings, do you also send 10 to retirement? or more, or is the 10 for savings retirement?

My rules of thumb keep retirement separate from savings, because of my other goals to save for a house & car.

And I usually budget off of my gross income & list taxes, but you can do it whatever way is more comfortable for you.

[LuxLiving]

Currently:

10% tithe
10% savings - e.fund/yearly predictables
20% retirement
60% live

Of course this would have been ideal for us all along, but sadly we did not live this way until the last three or four years! On one moderately low income, no debts other than SMALLish mortgage make this way of life doable for us, but just barely! We do a bit of the beans and rice living! Not entirely, but we do so willingly now for hopefully a well-supplied retirement.

Before we got consumer debt paid off our plan was slightly adapted from the Richest Man in Babylon scenario as:

10% tithe
10% savings/retirement
20% debt reduction
60% live

[nanamom]

I tithe my 10 % on the gross except I don't tithe on what I am having taken out for retirement or what they match. I figure I will be tithing on that when we retire. We save 15% for retirement. It would be 10 except that we started way too late. Any other savings is extra because it is usually earmarked for a thing, be it vacation or car or house or whatever. Right now it is EF (way too low there but growing)

[Broken Arrow]

Currently, I'm at 30% retirement and 10% debt reduction. My EF is full, and I'm taking advantage of my employer's no limit match.

I also consider savings and retirement as two separate funds.