saving 15%?

[LivingAlmostLarge]

Do you guys save 15% for retirement? Or just 15% overall? Do you count what you pay down in home equity in that 15%? If you save 15% to retirement how much more on top of that do you save? By saving I mean into taxable accounts? Or do you count saving as putting aside money for projects or goals?

[terri77]

I save more than 15% for retirement. And about 6% for general savings.

[kork13]

I've always considered 15% of gross going into retirement accounts an absolute minimum. I recommend the same to just about anyone. Anything you can do above that (whether into home equity, taxable investments, or other avenues) is great as well, but less definitive.

I have always personally aimed to save 15% retirement, 15-20% mid-term (taxable & 529 investments), and 10-15% short-term (cash savings)... But that's really aggressive, and typically unnecessary. Honestly, even if someone doesn't get to 15% for retirement, just having a plan & sticking to it is a big step. It'll allow you to grow toward 15% (and more) over time -- that discipline will help you get there.

[Jluke]

I don’t really pay attention to percent.

currently I am on track to save 30% (just calculated it).

this is maxing Roth and 401k plus taxable investing.

it’s only March so the percent should be higher by end of year.

I just dropped >50k on a home project so I am trying to save any extra money.

[srblanco7]

Do you guys save 15% for retirement? Or just 15% overall? Do you count what you pay down in home equity in that 15%? If you save 15% to retirement how much more on top of that do you save? By saving I mean into taxable accounts? Or do you count saving as putting aside money for projects or goals?

I think 15% of gross pay saved for retirement is a good starting point. Our saving habits have now evolved to where we are saving roughly 36% of our gross income, broken down as follows: 30% to 401ks, 12% to backdoor Roth IRAs, 8% to 529s and the remaining 50% to brokerage account. We do not/did not track additional principal payments on the mortgage or saving for short term goals as part of those numbers - only retirement savings.

[disneysteve]

For 2020, we saved 41.2% of my gross income.

13% went to the 401k which maxed it in October or early November. I continued to "contribute" that 13% to a taxable account for the remainder of the year.

Everything else went into taxable accounts.

That figure of 41.2% does not include the company match on the 401k or our tax refund which also went into savings.

When we had a mortgage, I did count extra principal payments as part of our savings figure (but not the regular scheduled payment).

[Snicks]

Honestly I don't look at things to that level of detail. I probably should be I don't. I just have always made living below my means, taking on minimal debt and saving for the future my approach. And, we just went forward with that. If we got a bonus we would either toss that on our mortgage principle or invest it. Also we liked having a big cushion in savings. Yes, that doesnt' earn necessarily but something comforting about having that at your fingertips. Overall as we approach our mid 50's we have done fairly well.

[rennigade]

Last I checked we were saving north of 35%. We never really sat down and said we should save x amount. We just always saved as much as we could.

Our goal was always to retire early though. The amount we save isn't necessary if we planned on working until 65.

[cypher1]

Base line was always 15% of gross for retirement goals, but in the last 5-6 years I've slowly upped each year. With company match back in 401K (was removed last year) and recent merit increase, adding Roth, HSA, I'm around 37%. For some reason I don't include percentage of taxable, since it seems to fluctuate each year. But if I had to guess, its probably another 3-4%. The main reason I've been able to save more in the last 3 years is due to renting out my house and downgrading my living situation while still being comfortable.

[riverwed070707]

I just bumped my 401k contributions to 20% recently. I save another 18% of gross toward my Roth (maxed) and general savings. Project/goal savings comes out of my rental income which I don't account for in these percentages as it always gets redeployed into rental projects or purchases. For my early retirement goals, 15% is waaay too little.

[LivingAlmostLarge]

So many people here save way more than 15%. I know this is the outlier, but still, I wonder do people really struggle with 15%? Do most people just do the 401k and call it a day?

[disneysteve]

So many people here save way more than 15%. I know this is the outlier, but still, I wonder do people really struggle with 15%? Do most people just do the 401k and call it a day?

When you say "most people" do you mean the average American? If so, most people save very little. About 59% have access to a 401k but only 32% participate at all. About 15% of people work for the government at some level so probably have a pension.

The savings rate in the US was running around 7-8% prior to COVID. It shot up as a result of the shutdowns and is now 12-13% I believe, but I'm sure it will drop back down as the world gradually gets back to normal.

[kork13]

So many people here save way more than 15%. I know this is the outlier, but still, I wonder do people really struggle with 15%? Do most people just do the 401k and call it a day?

Sadly, Steve is roughly accurate with the savings data. When paired with SS, 10-15% over the course of 30-40 years is generally what's required to ensure a secure retirement. It can be done with 5-10% over 40+ years, but one's standard of living will have to take some cuts.

I think many people, especially in younger generations, are much more used to the idea of having to save for their own retirement. However, that's also the group largely still wading through excessive SL debt and/or lower-income jobs, so saving 15% often can feel impossible to many.

The best solution is to start saving 15% or more from the very beginning, so that it's simply a natural part of the rhythm of your life. Once you're doing it, it's way easier to continue doing it. But starting? That can be really hard, especially if you're currently living beyond your means.

BL: Saving 15% SHOULDN'T be very hard for most folks. But it nevertheless IS a struggle, because people are often starting from behind (deep in debt), or are simply not accustomed to the savings habit & typically spend 100% of what they earn -- in either case, change is HARD.

[cypher1]

So many people here save way more than 15%. I know this is the outlier, but still, I wonder do people really struggle with 15%? Do most people just do the 401k and call it a day?

My buddy at work (his age 36 and with company for at least 7 years) still won't contribute to 401K or any retirement until he pays off CC balances. Employer matches 6%. No matter how much I beg him to do 6% to get that match, he just doesn't care. He's not lazy, has a BS in CSCI, but has no interest in this topic. I'm sure he represents the majority of Americans of focusing on the Now, than looking further ahead. Just another example for me to mind my own business unless they ask for advice or suggestions.

[disneysteve]

Saving 15% SHOULDN'T be very hard for most folks.

That's easy to say when you're on the higher end of the income scale, but fully half of the US population earns less than 68K. If you're making 50K, for example, once you pay taxes, health insurance, rent, utilities, food, clothing, gas, auto insurance and maintenance, out of pocket medical bills, maybe some kids' activities, a budget vacation once a year, and whatever else you need to live, setting aside $7,500 for retirement can be quite a challenge.

It gets easier and easier the more you earn because so many costs are regressive.