What percentage of your HHI do you save for retirement at what age(s)?

[Anonymous]

Anonymous wrote:Rather than what you save, look at what you have saved at diff. ages. The Millionaire Next Door model has the most aggressive savings goals - (A) - Average Accumulator of Wealth - Income*Age/10, and (B) - Prodigious Accumulator of Wealth = (A) * 2.

I think a better model would be to base it on expenses. i.e. What's your annual expense as a percentage of net worth? Keep the pressure on until you get to 3% but track and measure annually.

We save more than this prodigious accumulator but struggle with daily expenses.

[Anonymous]

Anonymous wrote:

Anonymous wrote:Rather than what you save, look at what you have saved at diff. ages. The Millionaire Next Door model has the most aggressive savings goals - (A) - Average Accumulator of Wealth - Income*Age/10, and (B) - Prodigious Accumulator of Wealth = (A) * 2.

I think a better model would be to base it on expenses. i.e. What's your annual expense as a percentage of net worth? Keep the pressure on until you get to 3% but track and measure annually.

We save more than this prodigious accumulator but struggle with daily expenses.

Save less.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:Single 45 yo woman here. HHI $380k 15% effective tax rate due to own business. I save about 150k/year in cash (treasuries, nothing to invest right now); $25k/year in 401 plan. Based on my estimates, I’ll be $4mm in cash by 55yo+business worth $5mm. I guess I can retire then.

Gross != net. No way you can have $380K in profits and only pay 15% of that in taxes.

Signed,
Business owner

My gross income is 380k. I pay 15% effective tax rate relative this gross income, and it consists of W2 from an employer and own business. I didn't say it was all profits.

For future reference, when you say your HHI is $380K, the rest of the world takes that to mean your business profit is $380K (if you're self-employed). Some businesses gross $1M and have $40K in profits - no one considers that business owner to have a $1M HHI.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:Single 45 yo woman here. HHI $380k 15% effective tax rate due to own business. I save about 150k/year in cash (treasuries, nothing to invest right now); $25k/year in 401 plan. Based on my estimates, I’ll be $4mm in cash by 55yo+business worth $5mm. I guess I can retire then.

Gross != net. No way you can have $380K in profits and only pay 15% of that in taxes.

Signed,
Business owner

My gross income is 380k. I pay 15% effective tax rate relative this gross income, and it consists of W2 from an employer and own business. I didn't say it was all profits.

For future reference, when you say your HHI is $380K, the rest of the world takes that to mean your business profit is $380K (if you're self-employed). Some businesses gross $1M and have $40K in profits - no one considers that business owner to have a $1M HHI.

Stop teaching me, ok? Few small or medium businesses show any profits. It’s actually a very stupid idea. My gross income is my business income if I’m a sole owner and it’s the same as gross HHI legally speaking.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:Single 45 yo woman here. HHI $380k 15% effective tax rate due to own business. I save about 150k/year in cash (treasuries, nothing to invest right now); $25k/year in 401 plan. Based on my estimates, I’ll be $4mm in cash by 55yo+business worth $5mm. I guess I can retire then.

Gross != net. No way you can have $380K in profits and only pay 15% of that in taxes.

Signed,
Business owner

My gross income is 380k. I pay 15% effective tax rate relative this gross income, and it consists of W2 from an employer and own business. I didn't say it was all profits.

For future reference, when you say your HHI is $380K, the rest of the world takes that to mean your business profit is $380K (if you're self-employed). Some businesses gross $1M and have $40K in profits - no one considers that business owner to have a $1M HHI.

Stop teaching me, ok? Few small or medium businesses show any profits. It’s actually a very stupid idea. My gross income is my business income if I’m a sole owner and it’s the same as gross HHI legally speaking.

you get rave reviews for your customer service, right?

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:Single 45 yo woman here. HHI $380k 15% effective tax rate due to own business. I save about 150k/year in cash (treasuries, nothing to invest right now); $25k/year in 401 plan. Based on my estimates, I’ll be $4mm in cash by 55yo+business worth $5mm. I guess I can retire then.

Gross != net. No way you can have $380K in profits and only pay 15% of that in taxes.

Signed,
Business owner

My gross income is 380k. I pay 15% effective tax rate relative this gross income, and it consists of W2 from an employer and own business. I didn't say it was all profits.

For future reference, when you say your HHI is $380K, the rest of the world takes that to mean your business profit is $380K (if you're self-employed). Some businesses gross $1M and have $40K in profits - no one considers that business owner to have a $1M HHI.

Stop teaching me, ok? Few small or medium businesses show any profits. It’s actually a very stupid idea. My gross income is my business income if I’m a sole owner and it’s the same as gross HHI legally speaking.

you get rave reviews for your customer service, right?

Stop being offended by someone else doing well and you’ll find life more enjoyable. No, not customer facing business (which is great!)

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:42. Over 100% of after-tax income is saved. I prioritized paying off my house and having lots of cash on hand over retirement savings my entire life. Now that I have no mortgage, it's all going to retirement/investments (I now have $8K in retirement!). I say over 100% of after-tax income will be invested because I also get an annual gift from my parents.

What on earth?

Seconded.

so.. the annual gifts covers the cost of living (gas, food, utilities?)
what is your HHI? When did you start saving that now you have EIGHT THOUSAND DOLLARS (!!) in your retirement?

perplexed by this strategy. When your parents pass away will you have an inheritance? SO. MANY. QUESTIONS.

I valued having a paid-off house much more than retirement savings, so all savings went toward the house. I paid off the house about a year ago and then moved to having a lot of cash so I could handle whatever life threw at me. Once I saved up $125K in cash, then I finally moved toward starting to save for retirement. The first retirement contribution of my life was last month and it was $8K.

Since I have no mortgage and I’m single, I only spend about $30K per year, but my parents give me a gift of 34K per year, which is why I say I save more than 100% of my after-tax income. I will almost certainly receive an inheritance, but likely not too much since there are multiple siblings.

Yes, my approach was unconventional, but I don’t think people understand just how rich you feel if you have a paid-off house and $100K in cash, even with no other investments. Just look at the other thread from the lady that needs $20K to get through a layoff but has $700K in equity on her $1.5 million house, a decent amount in retirement accounts, etc. She has to sell trinkets around her house to raise $2K, etc. — it seems so stressful to live the way financial advisors recommend, never paying off your house, dumping money into retirement accounts you can’t touch for 30 years, and so on.

Nope. You are actually financially illiterate.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:42. Over 100% of after-tax income is saved. I prioritized paying off my house and having lots of cash on hand over retirement savings my entire life. Now that I have no mortgage, it's all going to retirement/investments (I now have $8K in retirement!). I say over 100% of after-tax income will be invested because I also get an annual gift from my parents.

What on earth?

Seconded.

so.. the annual gifts covers the cost of living (gas, food, utilities?)
what is your HHI? When did you start saving that now you have EIGHT THOUSAND DOLLARS (!!) in your retirement?

perplexed by this strategy. When your parents pass away will you have an inheritance? SO. MANY. QUESTIONS.

I valued having a paid-off house much more than retirement savings, so all savings went toward the house. I paid off the house about a year ago and then moved to having a lot of cash so I could handle whatever life threw at me. Once I saved up $125K in cash, then I finally moved toward starting to save for retirement. The first retirement contribution of my life was last month and it was $8K.

Since I have no mortgage and I’m single, I only spend about $30K per year, but my parents give me a gift of 34K per year, which is why I say I save more than 100% of my after-tax income. I will almost certainly receive an inheritance, but likely not too much since there are multiple siblings.

Yes, my approach was unconventional, but I don’t think people understand just how rich you feel if you have a paid-off house and $100K in cash, even with no other investments. Just look at the other thread from the lady that needs $20K to get through a layoff but has $700K in equity on her $1.5 million house, a decent amount in retirement accounts, etc. She has to sell trinkets around her house to raise $2K, etc. — it seems so stressful to live the way financial advisors recommend, never paying off your house, dumping money into retirement accounts you can’t touch for 30 years, and so on.

I'm not sure unconventional as much as filling up a burn barrel with cash and setting it on fire.

[Anonymous]

OP here: I should have defined HHI before I started. My bad.

I was really just interested in learning how others in the DMV think about this, especially parents. I have all of these single friends who save a lot for retirement but my married friends never talk about it. Out of respect for their privacy, I don't bring it up, but this is supposedly anonymous, so I thought I'd try.

I didn't mean to start a shlong match or an argument. Let's just assume everyone is doing the best that they can or are willing to do.

[Anonymous]

Anonymous wrote:OP here: I should have defined HHI before I started. My bad.

I was really just interested in learning how others in the DMV think about this, especially parents. I have all of these single friends who save a lot for retirement but my married friends never talk about it. Out of respect for their privacy, I don't bring it up, but this is supposedly anonymous, so I thought I'd try.

I didn't mean to start a shlong match or an argument. Let's just assume everyone is doing the best that they can or are willing to do.

Any thread on this board that starts with "how much?" will turn into a shlong match with a cup of 'make-believe' and a sprinkle of 'WTF?'

[Anonymous]

Anonymous wrote:

Anonymous wrote:OP here: I should have defined HHI before I started. My bad.

I was really just interested in learning how others in the DMV think about this, especially parents. I have all of these single friends who save a lot for retirement but my married friends never talk about it. Out of respect for their privacy, I don't bring it up, but this is supposedly anonymous, so I thought I'd try.

I didn't mean to start a shlong match or an argument. Let's just assume everyone is doing the best that they can or are willing to do.

Any thread on this board that starts with "how much?" will turn into a shlong match with a cup of 'make-believe' and a sprinkle of 'WTF?'

TRUTH

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:42. Over 100% of after-tax income is saved. I prioritized paying off my house and having lots of cash on hand over retirement savings my entire life. Now that I have no mortgage, it's all going to retirement/investments (I now have $8K in retirement!). I say over 100% of after-tax income will be invested because I also get an annual gift from my parents.

What on earth?

Seconded.

so.. the annual gifts covers the cost of living (gas, food, utilities?)
what is your HHI? When did you start saving that now you have EIGHT THOUSAND DOLLARS (!!) in your retirement?

perplexed by this strategy. When your parents pass away will you have an inheritance? SO. MANY. QUESTIONS.

I valued having a paid-off house much more than retirement savings, so all savings went toward the house. I paid off the house about a year ago and then moved to having a lot of cash so I could handle whatever life threw at me. Once I saved up $125K in cash, then I finally moved toward starting to save for retirement. The first retirement contribution of my life was last month and it was $8K.

Since I have no mortgage and I’m single, I only spend about $30K per year, but my parents give me a gift of 34K per year, which is why I say I save more than 100% of my after-tax income. I will almost certainly receive an inheritance, but likely not too much since there are multiple siblings.

Yes, my approach was unconventional, but I don’t think people understand just how rich you feel if you have a paid-off house and $100K in cash, even with no other investments. Just look at the other thread from the lady that needs $20K to get through a layoff but has $700K in equity on her $1.5 million house, a decent amount in retirement accounts, etc. She has to sell trinkets around her house to raise $2K, etc. — it seems so stressful to live the way financial advisors recommend, never paying off your house, dumping money into retirement accounts you can’t touch for 30 years, and so on.

I'm not sure unconventional as much as filling up a burn barrel with cash and setting it on fire.

That’s fine. I’m sure at least some of the people that keep their 2.75% mortgages also fly first class — I consider *that* to be setting cash on fire. I’m very happy with my choices.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:42. Over 100% of after-tax income is saved. I prioritized paying off my house and having lots of cash on hand over retirement savings my entire life. Now that I have no mortgage, it's all going to retirement/investments (I now have $8K in retirement!). I say over 100% of after-tax income will be invested because I also get an annual gift from my parents.

What on earth?

Seconded.

so.. the annual gifts covers the cost of living (gas, food, utilities?)
what is your HHI? When did you start saving that now you have EIGHT THOUSAND DOLLARS (!!) in your retirement?

perplexed by this strategy. When your parents pass away will you have an inheritance? SO. MANY. QUESTIONS.

I valued having a paid-off house much more than retirement savings, so all savings went toward the house. I paid off the house about a year ago and then moved to having a lot of cash so I could handle whatever life threw at me. Once I saved up $125K in cash, then I finally moved toward starting to save for retirement. The first retirement contribution of my life was last month and it was $8K.

Since I have no mortgage and I’m single, I only spend about $30K per year, but my parents give me a gift of 34K per year, which is why I say I save more than 100% of my after-tax income. I will almost certainly receive an inheritance, but likely not too much since there are multiple siblings.

Yes, my approach was unconventional, but I don’t think people understand just how rich you feel if you have a paid-off house and $100K in cash, even with no other investments. Just look at the other thread from the lady that needs $20K to get through a layoff but has $700K in equity on her $1.5 million house, a decent amount in retirement accounts, etc. She has to sell trinkets around her house to raise $2K, etc. — it seems so stressful to live the way financial advisors recommend, never paying off your house, dumping money into retirement accounts you can’t touch for 30 years, and so on.

I'm not sure unconventional as much as filling up a burn barrel with cash and setting it on fire.

That’s fine. I’m sure at least some of the people that keep their 2.75% mortgages also fly first class — I consider *that* to be setting cash on fire. I’m very happy with my choices.

LOL with mommy and daddy paying for your entire life it's pretty easy to be happy with your "choices".