Anonymous
10/06/2023 19:48
Subject: Re:What percentage of your HHI do you save for retirement at what age(s)?
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 would caution against throwing stones. How was your situation any different from the trinket seller's situation before you paid off the house and saved up an emergency fund? Perhaps you always had parents to borrow from and that was your emergency fund?
Anonymous
10/06/2023 19:41
Subject: Re:What percentage of your HHI do you save for retirement at what age(s)?
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.
You can take out Roth IRA contributions penalty-free and tax-free at any time, you just can’t touch the returns until retirement.
You can take out 401k loans of needed.
Also I forget which one, but you can also withdraw retirement funds penalty-free to buy your first home.
And ultimately, you can always take money out of any retirement account if absolutely needed, you’d just have to pay a penalty for it.
I’ll also add that most investors also invest in taxable brokerage accounts in addition to retirement accounts, so that’s an additional source of money whenever needed.
Anonymous
10/06/2023 16:59
Subject: Re:What percentage of your HHI do you save for retirement at what age(s)?
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.
Anonymous
10/06/2023 16:55
Subject: Re:What percentage of your HHI do you save for retirement at what age(s)?
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
Anonymous
10/06/2023 16:03
Subject: Re:What percentage of your HHI do you save for retirement at what age(s)?
About 20%, 48/54
Anonymous
10/06/2023 15:54
Subject: What percentage of your HHI do you save for retirement at what age(s)?
Around 25%. 37/38.
Anonymous
10/06/2023 15:46
Subject: What percentage of your HHI do you save for retirement at what age(s)?
43. 5% The rest is going towards special needs private school that is making our lives livable.
I don't think I'll ever retire.
I don't think I'll ever retire.
Anonymous
10/06/2023 15:45
Subject: Re:What percentage of your HHI do you save for retirement at what age(s)?
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.
Anonymous
10/06/2023 14:41
Subject: What percentage of your HHI do you save for retirement at what age(s)?
I'm PP and we are 47 and 49.
Anonymous
10/06/2023 14:39
Subject: What percentage of your HHI do you save for retirement at what age(s)?
We both did 5% (co match) until only child was in K. Then we maxed out, which has varied from 10-20% of our income. We have about $1.5 million between spouse and myself in retirement accounts.
We consistently saved $8K a year in a 529. Kid is now 14 and we have about $150K and 8 years until they are done with college. So will have saved about $250K and will have to cash flow the rest if needed.
Haven't managed to save much else besides 3 months EF.
We consistently saved $8K a year in a 529. Kid is now 14 and we have about $150K and 8 years until they are done with college. So will have saved about $250K and will have to cash flow the rest if needed.
Haven't managed to save much else besides 3 months EF.
Anonymous
10/06/2023 14:22
Subject: What percentage of your HHI do you save for retirement at what age(s)?
I've always contributed the max to my 401k, so every year as my income goes up, the percentage of HHI that I save specifically in a retirement fund goes down. Currently, it's at like 6%. I wish I could contribute more pretax dollars.
Anonymous
10/06/2023 14:17
Subject: Re:What percentage of your HHI do you save for retirement at what age(s)?
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.
This financially illiterate PP paid off their house (up to $1M?), holds a lot of money in non-retirement funds, lives off of an allowance, and has now started saving for retirement.
I think it's great that PP goes to work instead of just living off the trust fund.
Anonymous
10/06/2023 14:09
Subject: Re:What percentage of your HHI do you save for retirement at what age(s)?
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.
Anonymous
10/06/2023 14:03
Subject: Re:What percentage of your HHI do you save for retirement at what age(s)?
Anonymous wrote:Anonymous wrote:In sixties and nearing retirement. 20%. About 40% of that goes to a Roth 401k.
Please call my CEO and tell him to offer a Roth401k option. I'm dying over here waiting for one.
Greatest thing since sliced bread. You need to organize your fellow employees and demand it!
Anonymous
10/06/2023 14:00
Subject: Re:What percentage of your HHI do you save for retirement at what age(s)?
Anonymous wrote:About 1/3. 50 years old. Probably should stop saving soon.
Mostly 1/3 for the past 20 years, both 50s. We are going to retire soon.
We are self employed so that 1/3 includes the amount from the business contribution to the 401k.