Wow!! On Target to save 50% of INCOME

[tripods68]

I know it's early with 10 months to go but I was giddy to find out doing our monthly budget---when I calculated our savings rate so far at 50% level. For us that best rate of saving at year ever!! We automate our savings rate monthly so we don't even touch or moved $$ manually. EZ!

So we are on target to make little over $200k (include raises + bonus) this year. So when I add our retirement contributions + taxable savings = $101k in retirements (included employer matching). IF only we didn't have a mortgage, our savings rate will be jump to 75%. Dang!

[corn18]

I know it's early with 10 months to go but I was giddy to find out doing our monthly budget---when I calculated our savings rate so far at 50% level. For us that best rate of saving at year ever!! We automate our savings rate monthly so we don't even touch or moved $$ manually. EZ!

So we are on target to make little over $200k (include raises + bonus) this year. So when I add our retirement contributions + taxable savings = $101k in retirements (included employer matching). IF only we didn't have a mortgage, our savings rate will be jump to 75%. Dang!

Congrats! I am curious how you calculate this as 75% of your gross income (if it's W-2 income in the U.S.) would result in close to zero net income. At $200k, you must be close to the 25% effective tax rate, overall.

In my case, my effective tax rate is 37%, so the best I could do is save 63% of gross. I am actually saving 44% of gross or 67% of net (not including any matches, so maybe that is the difference from your example). In reality, we are living off of 100% - 37% taxes - 44% savings = 19% of my gross income.

[disneysteve]

Awesome! That's quite an accomplishment.

Not to steal your thunder, but just last night I was chatting with a friend and realized that once our daughter finishes college next year and we pay off any money we borrowed to help with that, along with the increased income from my new job and lower healthcare costs, we should have over $50,000/year in extra disposable income. I've been so focused on the individual expenses that I hadn't stepped back to look at the big picture. I just didn't realize it would amount to so much once we put it all together.

[Outdoorsygal]

I know it's early with 10 months to go but I was giddy to find out doing our monthly budget---when I calculated our savings rate so far at 50% level. For us that best rate of saving at year ever!! We automate our savings rate monthly so we don't even touch or moved $$ manually. EZ!

So we are on target to make little over $200k (include raises + bonus) this year. So when I add our retirement contributions + taxable savings = $101k in retirements (included employer matching). IF only we didn't have a mortgage, our savings rate will be jump to 75%. Dang!

Good for you!! That's alot of $$ saved even while having a mortgage
We are only at saving 45% of my one of two paychecks but hope to be saving all of that paycheck within 12 months. Then using the other to live off of.

[StormRichards]

That's awesome! Your thread provided me with the encouragement to calculate ours for 2016. It was 44%.

Will have to work some numbers at a later time to see what our 2017 projection is. 50% is a nice goal to set for our 2017 savings.

[tripods68]

Congrats! I am curious how you calculate this as 75% of your gross income (if it's W-2 income in the U.S.) would result in close to zero net income. At $200k, you must be close to the 25% effective tax rate, overall.

In my case, my effective tax rate is 37%, so the best I could do is save 63% of gross. I am actually saving 44% of gross or 67% of net (not including any matches, so maybe that is the difference from your example). In reality, we are living off of 100% - 37% taxes - 44% savings = 19% of my gross income.

206k is gross this might go higher depending overtime.
Take home $110k

103k breakdown
($51k)will pretax contributions 401k,457, Roth fully funded + mandatory pension contributions)
($26k)taxable savings
($26k)employer match

Edit: I prefunded our ROTH this month for 2017 with our tax refund. I added 5500 in pretax in error.

Our mortgage payment represent about 23-25% our take income w/extra payment included this year. That's pretty aggressive for us. That's the goal this year. If we didn't have no mortgage payment $32k would in addition to the pretax we already saved, or 8k tax savings at 25%.

2016 Effective rate 14.8%.

[corn18]

206k is gross this might go higher depending overtime.
Take home $110k

103k breakdown
($51k)will pretax contributions 401k,457, Roth fully funded + mandatory pension contributions)
($26k)taxable savings
($26k)employer match

Edit: I prefunded our ROTH this month for 2017 with our tax refund. I added 5500 in pretax in error.

Our mortgage payment represent about 23-25% our take income w/extra payment included this year. That's pretty aggressive for us. That's the goal this year. If we didn't have no mortgage payment $32k would in addition to the pretax we already saved, or 8k tax savings at 25%.

2016 Effective rate 14.8%.

Gotcha, you were including the $26k employer match. In that case, WELL DONE!

[tripods68]

Good for you!! That's alot of $$ saved even while having a mortgage
We are only at saving 45% of my one of two paychecks but hope to be saving all of that paycheck within 12 months. Then using the other to live off of.

You can do it. ive been finding ways to cut our monthly expenses which is the key for us.

[tripods68]

Awesome! That's quite an accomplishment.

Not to steal your thunder, but just last night I was chatting with a friend and realized that once our daughter finishes college next year and we pay off any money we borrowed to help with that, along with the increased income from my new job and lower healthcare costs, we should have over $50,000/year in extra disposable income. I've been so focused on the individual expenses that I hadn't stepped back to look at the big picture. I just didn't realize it would amount to so much once we put it all together.

That's great Steve. $50k additional spending is very enticing to go crazy. Congrats!

[disneysteve]

That's great Steve. $50k additional spending is very enticing to go crazy. Congrats!

I'm sure we will do something wild and crazy... like raise my 401k contribution rate, pay off our mortgage, and start saving up a down payment to move to Florida.

[scfr]

Really, really nice work tripods68 - Congratulations!

[thestrongprofessional]

Congrats!

Hey tripods68,

Congratulations on your accomplishment! Not many people achieve that level of saving and it's really something to be proud of. I have been on track to save between 35-40% of my take home income this year. I am a single 25 year old so my expenses are definitely not as high as someone with a family. I'm also proud of what I've been able to do so far this year and will continue this level of saving!

Raphael

[tripods68]

Thank you guys!


Today I was listening to a podcast done by Mr Money Mustache. I realized I'm in the "mustachian" level now which is a stranged feeling. It's very hard to be saving at this level especially with extra mortgage payment. I feel very motivated to keep this going now--especially the way the market has performed recently (knowing it can be erased in one fell swoop anytime). Anything above 7-8% IRR on top of the saving rate would be a bonus. So I'm still finding ways to cut our budget at any cost further to sustain this saving rate--while minimizing our taxes (who doesn't right-. 🍻

[tripods68]

Hey tripods68,

Congratulations on your accomplishment! Not many people achieve that level of saving and it's really something to be proud of. I have been on track to save between 35-40% of my take home income this year. I am a single 25 year old so my expenses are definitely not as high as someone with a family. I'm also proud of what I've been able to do so far this year and will continue this level of saving!

Raphael

Keep the momentum especially at your age level. You will reach FI sooner than later by being intentional. It's easy to look back in my early twenties and see all my financial mistakes. I've only listened to DR at you age, I would be 4-5 times more richer today. Keep it up!

[clatoden99]

That's great. One thing I have learned, however, is that projections like this can tend to be optimistic. Don't discount the possibility you may need to cut back on savings due to some kind of emergency situation.