Curious: What Percentage of your gross Income are you Investing Annually

[zinfamous]

yeah my dad died at 57 and never even experienced retirement. everyone gave my wife and myself shit when we were blowing all of our money on traveling in our early 20's through early 30's, telling us we need to buy a house and have a kid blah blah blah.

well now we're early 30's and have a 1 year old and have traveled to more places than our entire families combined. plus we still travel 3-4 times a year since we've made it a priority.

i've got a good plan for retirement and could easily save more but that would hinder our travel plans. i think we've struck a good balance. i don't understand the people who go to one or the other extremes.

hell i was just talking to my one buddy who hasn't had a "real" vacation (as in, gone on an airplane to go somewhere other than seeing family) in over a decade and he said how he's going to take his tax return ($5+ grand) and use it to do work on his house. i told him to just fuck that and use it on an awesome vacation. he can always do work on his house later when he gets back and in the next year or so, but he's only getting older and won't be able to travel in his younger years (he's already early 40's) much longer.

Who says I don't travel? Yeah, I'm going to start traveling more, but Belize was 2 years ago. Either Cuba or Peru/Argentina something next year. I've been to enough of the caribbean to know that I don't ever need to see anymore of that.

I do like traveling to Europe, but I've spent about 7 months there, total. I'm certainly going to be heading that way several more times, but it's not like I've sheltered myself in life.

Oh and to be more clear, my 50-60% savings/investing plan is only very, very recent. I have been shitting all of that away on booze and candy and other nonsense gadgets that I don't need. I've declared to myself that I have grown out of much of that lifestyle, yet can still live and eat very well.

 

[dullard]

It's great unless you get cancer at 45 and never get a chance to spend that money you worked your whole life to make

My first post had that covered. Clearly in a long thread, I understand that there wasn't a connection between those two posts.

If you save ~15% of your total income each year, then you can retire with about the same life style that you had before retirement. That is a reasonable balance to address the case of living decades in retirement in poverty and the case that you mention of dying before spending much of your money.

Saving just 15% means you spend most of it as you earn it. If you do that, then, the get cancer at 45 problem isn't really that bad of a problem. Sure, you could have had a few more trinkets here or there, but you didn't miss out on much.

And saving ~15% isn't that hard when social security forces you to save 6.2%, and most companies match at least 3%. That leaves just ~5.8% of your potential take-home income that you should save.

 

[Uppsala9496]

Wife and I each do 7% with 3% company matches.
Roth gets $5,500 each year.

Only debt is mortgage and a small 0% furniture loan. Mortgage gets an additional ~28% principal paid each month so it will be paid off in 15 years instead of 30.

 

[Renob]

11% and company matches the fist 5%

 

[Fenixgoon]

14% into my 401k. company matches 6% i think?

 

[purbeast0]

Who says I don't travel? Yeah, I'm going to start traveling more, but Belize was 2 years ago. Either Cuba or Peru/Argentina something next year. I've been to enough of the caribbean to know that I don't ever need to see anymore of that.

I do like traveling to Europe, but I've spent about 7 months there, total. I'm certainly going to be heading that way several more times, but it's not like I've sheltered myself in life.

Oh and to be more clear, my 50-60% savings/investing plan is only very, very recent. I have been shitting all of that away on booze and candy and other nonsense gadgets that I don't need. I've declared to myself that I have grown out of much of that lifestyle, yet can still live and eat very well.

not me but thanks for asking!

 

[jpiniero]

i've got a good plan for retirement and could easily save more but that would hinder our travel plans. i think we've struck a good balance. i don't understand the people who go to one or the other extremes.

Do you have a decent emergency fund though?

 

[holden j caufield]

After putting in the max for my IRA I invest everything I don't need for the housing, food, gas, phone bill, $200 set for fun each month. My ideal meal out is 2 in n out burgers and a water for like $4.50 so I don't spend much. The rest goes in a trading account.

It's surprising fun, I don't need the money but it's pretty fun watching it go up, getting out right before it drops. It is also kind of funny painful watching a stock you sold a week ago jump 50% in one day. I own some SPY and QQQ but it's much more fun moving individual stocks.

 

[Red Squirrel]

Not enough. I do put a bit of money into RRSPs, and that's about it. Maybe like 5%?

I recently opened an online stock broker account though, might play around with that, but that is more for fun, not going to be putting that much money towards it. Costs of living keep going up so every year the amount of money I can afford to invest or buy fun things is smaller.

 

[holden j caufield]

Not enough.

I recently opened an online stock broker account though, might play around with that, but that is more for fun, not going to be putting that much money towards it.

I would put as much as you can. For the video games kids, I've seen some amazing thinking skills and speed from starcraft and rts guys, some went to online poker and when that closed down some have moved to online trading. Granted you'll never be faster than the algorithm computer traders but there's definitely a lot of opportunity for the quick thinkers and guys with the best nerves.

I wish I got into when I younger as I might be retired now with some lucky and timely trades.

 

[Jeff7]

6% and then the company matches 6% at 100%. So total of 12% per weekly check. So depending on check, a little over $300 per week onto 401k, sometimes closer to $400. Past that and it's just a 50% match. Probably up it after awhile once 2nd kids is out. But as of now, have a 17 yo girl, 12yo boy, 3yo girl, and wife is about 2 months pregnant. She's not going back to work after this one for several years.

To be honest I'm pretty ignorant with all the 401k stuff. I just let them put it wherever, in the middle of the three options. Not high risk, or low risk, middle. I don't check it that often either. I need to educate myself on it more, but not that motivated.

Edit, I forgot about military. I did a bunch of years active Marine Corps, and in the Reserves now just riding out 20. It's based on points and really not sure where I'll be at. But it should be a pretty good retirement too. Military is going away from 20 years or nothing and going to a 401k. Supposedly those already in can choose the option. So depending on what I'd get, I could just choose that and roll it into my current, that'd be nice.

Do it, it only takes a few days. It took me a week to figure this out enough to make myself comfortable, but I'm a dummy.

Simply going into the funds that your company invests--through Fidelity/Vanguard/TIAA whatever they use, take a look at those funds and see if if they meet your needs, if the costs are worth the growth. I ignored that stuff for the last 10 years before wising up. A bit annoyed at myself that I was tossing away 40-60% of contributions into relatively "high" fees of 1-2% when I could have put that money into lower fee 0.05 or 0.04% index funds. It doesn't look like much, but it really adds up over 20 years+

Or maybe even less time than that.


- Go here.
- Follow the guidelines there. (Short version: Post your fund options available, the ER (expense ratio), and expected time to retirement.)
- Post it.
- Offer thanks and be on your merry way.

If you are lucky enough to have low-cost Target Retirement funds, you don't have to do very much at all: Stuff the investment money into one of them and wait. (Note/example: A Target Retirement 2045 fund doesn't mean that the fund "expires" in 2045. It just means that by 2045, the fund will automatically reach a stock/bond allocation intended to emphasize stability over growth.)
If not, you can still be comfortably lazy.

If you have nothing but expensive funds....that kind of sucks, and there may not be much you can do about it. (That depends very much on your company.)

 

[Imp]

Oh and to be more clear, my 50-60% savings/investing plan is only very, very recent. I have been shitting all of that away on booze and candy and other nonsense gadgets that I don't need. I've declared to myself that I have grown out of much of that lifestyle, yet can still live and eat very well.

I saved quite a bit in my early years but still bought a fair amount of useless shit. In more recent years, I cut most of that useless shit out of my life because it didn't make me any happier -- it actually made me feel worse because how much maintenance they required.

I can appreciate nice things, but I don't regret not having them and feel little/no FOMO -- no, this is not "normal" and I'm well aware of that.

 

[child of wonder]

Wife and I both max out 401k, I put 10% of my gross income into the employee stock purchase program, and we try to save an additional $15k-$35k a year on top of that for retirement investments.

 

[purbeast0]

Do you have a decent emergency fund though?

yeah i don't live paycheck to paycheck so money compiles in my checking account and i'll move it over to savings. plus i make a couple hundred a month from ios/android apps that goes straight to my savings account.

i don't have a plan to put X amount of cash aside though or anything like that though, but don't really need to at this point because i have enough in case something happens.

 

[Spacehead]

I have 19% of gross taken out of my check each week that goes into my regular mutual fund account. That's the account i pay taxes on at the end of the year.
I have a Traditional & Roth IRA but the max for that is $6.5K this year for me.
We have nothing through work anymore.

 

[Zorba]

There's a new IRS ruling where you roll over your after tax 401k contributions to an roth ira (when changing companies or retiring) without being taxed during the conversion. Of course your company needs to allow for after tax 401k contributions.

So you could max out your 401k and then do the after tax contribution. It's pretty amazing, it went into effect on Jan 1, 2015. I just read up on it, found out from a friend.

"In essence, you can now contribute over $50,000 per year into your Roth IRA," says Brian Frederick, CFP professional and associate financial planner at Intrinsic Wealth Counsel in Tempe, Arizona.

Good article about it here: http://www.bankrate.com/finance/retirement/after-tax-401k-rollover-to-roth-ira-rules.aspx

Thanks for the link :thumbsup:

My wife and I currently max out the 401K pre-tax, which is about 18%, company match is 6%, plus a 3% automatic contribution, so we get 27% into the 401K every year. Put a bit in Roth IRAs, savings, HSA, etc. Overall we save about 50-60% of gross including the company match.

Now that I know this 401K trick, I'll probably bump up the 401K a bit since we are very borderline on the Roth income limit.

 

[ScottFern]

Anyone else get the feeling our next generations will be richer and richer because people nowadays plan for retirement more (there's dual income too) and will have more to pass on after death? This could shift a lot of things like their spending habits or how hard they work, etc. Maybe even how competitively jobs pay in the future or housing prices because people will have more to offer. Will things simply cost a lot more, like college already does...

Or - do you think people will just spend their retirement savings on themselves?

I've heard people speculate that Congress could pass a law saying any IRA/401K/Retirement account that has been open for 50+ years and not drawn on (meaning the person died and passed it to their children) that they would begin to tax the gains or something along those lines.

Btw, I am contributing 11% gross to my 401k and I get a 4% dollar for dollar match and a 3% annual fixed 401k contribution from my employer. My wife and I also just opened up our first IRA this year for both of us.

 

[Broheim]

12% for retirement at the moment, 9,5% from my employer. 12% is pretty standard here in Denmark when you start at 25. I'll probably increase it in a few years but for now I'm saving up for a down payment on a home and stuff like that.