What % of pay goes toward doing what is suggested?

[Politically_Incorrect12]

How percentage of your pay goes toward doing all the things that we are supposed to do, or that are at least suggested we do? It seems like doing all the suggested things can add up pretty quickly.

I was looking at some of the things suggest like 15% toward retirement (some say this includes any company match, others say do 15% without including any match), have different types of insurances (ID theft, car, home, health, life, disability, etc), save $300-500/month if you have kids for their college, etc.

It seems to be a bit much, especially when you add in other cost such as daycare needed for 2 income households that can range from $600-1500/ month depending on where you live. Then you have rent/mortgage, utilities, food, gas, etc.

[SVT]

Yeah, I'm sure it's tough for some families. The more you make, the better and easier it is to do all the things you need to do, though.

[SVT]

And sometimes sacrifices that many families aren't willing to make, can be made in order to take care of their future needs in retirement and insurance, etc. Many families buy too much house and too expensive of a car and trade every few years.

[Deleted]

It does add up really quick which is why in our current search for an apartment we are trying to keep the costs as low as possible.

We just can't afford to have a kid right now and I look at some friends I ask how do they do it. In my area the cheapest daycare is $50/day which would be $250/week.

College savings? What? I say until you have debt and retirement under control, don't even add that in the equation.

[Sum Dum Gai]

I put 15% towards retirement. I haven't ever totalled up all the insurance, but just medical premiums without copays or anything are like 7.5%, so all insurance has to easily be 10-12%. State and Fed taxes take another 13% or so. So, yeah take 38-40% off the top before I even get my check. If we were saving for college for both the kids we'd probably be looking at close to half my check gone.

[Deleted]

Apr 5, 2011 23:58:36 GMT -5 Sum Dum Gai said:

State and Fed taxes take another 13% or so.

I was reading an article that state that if you add all taxes (state, feds, city and sales taxes), the average americans works 3 months out of the year just to pay them.

So out of 12 months you work, only 9 months worth of paycheck really comes to you after uncle sam and all the others take their cut.

[Apple]

I did the math once, and I was taking home 59% of my paycheck after taxes, health insurance, retirement, etc. Not sure where I am now with net vs gross, but it's probably about the same. I also put 15% toward retirement with a 5% company match. Saving for DS's college? Well, not doing so well there, but I'm only going to help if the effort to do well is there, if not, he can fund it himself. Also, if he wants a more expensive school he'll need a job. I did put him through private school for 8 years, I can come up with the money if needed. I paid for my own education, I don't think it odd or unreasonable that I expect him to pay for most of his.

[cronewitch]

Unless you are very high income you can't do it all at once. I can easily save almost 50% but that is because I don't have kids, do have a roommate, don't have car payment, don't like shopping, don't have student loans, don't support other people. So I gross 4,666 a month and can live on about 2K a month and people keep giving me money. Mom gave me 1,000 last fall, 100 for christmas, 40 for gas last week and 200 for doing her taxes this week. My roommate gives me 170 a week, my investment account gives me a few hundred a quarter in dividends and a few gains at year end, sometimes I get bonuses at work. It just seems so easy now I just don't shop so the money piles up in my purse until I deposit it, I deposited 1,300 last week but have about 400 more already and a 200 check. I can pay my property taxes on money that isn't in my gross wages.

Hard to remember how hard it is for some people. I am working at thinking not all poor are at fault or handicapped some are just struggling to so any blip in the budget hurts. So now I am going to the food bank and taking them toilet paper and diapers so far I haven't seen any poor people with nice cars or cell phones they just look like the working poor. I was poor before but it is hard to remember and I always managed to have plenty to eat even if it was pancakes for dinner almost every night or just hard boiled eggs or white beans with salt pork and turning in pennies to get hamburger.

[yogiii]

After taxes, maxing 401k (16,500) and LTD, STD, I take home 62% of my pay. I assume DH's check is even less because he has the above plus our family health insurance. We also max our Roths. We still need to buy life insurance and haven't started to fund our DS's 529 (although he isn't a year yet and does have some $ in there from his grandparents).

[giramomma]

We try to follow the 60% rule article that was posted on MSN a long time ago.

We also don't have any debt other than a mortgage, nor do we have many "toys."

Given our income levels, it's cheaper for us to live the SAHP lifestyle than to have two full time working parents.

I also took a job with a pension. Course, that may change in the following years, but I took the job with the pension because I knew we wouldn't be making a ton of money. And, also because we don't live on a ton of money, we won't need to multiple millions for retirement.

We've asked the grandparents to contribute to college rather than buying a ton of toys for Christmas and new years. I anticipate that we'll have more money available for college when are kids are ready to go, than we do now. We should have a paid off mortgage by then, and some other costs will be reduced as well. And, frankly, I won't let me kids go to their "dream" school if it means having 100K worth of college debt at the other end.

[The J]

My net is 57% of my gross. That's after 20% to retirement, taxes, LTD and my medical and transportation flex contributions. I also save approximately 13% of my net.

[Deleted]

We save between 15-18% of our gross into our retirement accounts, but we don't have other things we are supposed to have like life insurance, Id theft ins, disability, etc. We also don't contribute to a college fund.

[Deleted]

Apr 6, 2011 8:31:56 GMT -5 ArchietheDragon said:

We save between 15-18% of our gross into our retirement accounts, but we don't have other things we are supposed to have like life insurance, Id theft ins, disability, etc. We also don't contribute to a college fund.

Archie, please tell me you have you are joking? With one child and another on the way, long term disability and life insurance is a must!

[Deleted]

Apr 6, 2011 8:56:40 GMT -5 TheHaitian said:

Apr 6, 2011 8:31:56 GMT -5 ArchietheDragon said:

We save between 15-18% of our gross into our retirement accounts, but we don't have other things we are supposed to have like life insurance, Id theft ins, disability, etc. We also don't contribute to a college fund.

Archie, please tell me you have you are joking? With one child and another on the way, long term disability and life insurance is a must!

Yeah, I know.

[Baby Fawkes]

I just took a look at my final paystub for 2010 and after all the various items (taxes, 401K, HSA, insurance, LTD, ADD) it looks like I currently net about 45% of my gross.

I guess that's one way that should make retirement a little more comforable if I'm on track to replace 100% of my gross. Well, that's the goal so that I can do a lot of stuff, but even if I miss and cna only replace 80% it'll probably be a nice raise

[Anne_in_VA]

I currently net about 43% of my gross after all deductions are taken (taxes, 401K at 15% plus company match, Ins, etc.). In addition, I save part of each paycheck, so I think I'm doing pretty good.

[Tiny]

Unless you are very high income you can't do it all at once.

I'd disagree with this. If you are earning a very high income -- lets say a GROSS of 250K and only saving 3% of gross or $7500 a year (because you got auto enrolled in a 401(k) plan a couple of years ago)... I suspect it's kinda hard to just bump up the 3% contribution to 15% ($37500). Taking a $30,000 (or so) hit a year in net income isn't something someone who's use to living on an estimate of 145K a year is gonna be able to easily do. You'd have to cut back your lifestyle quite a bit!
It's far eaiser to start out saving and then slowly increase the amount saved over time. And I'd say just about anyone can save something...

[Deleted]

Apr 6, 2011 9:59:08 GMT -5 Tiny said:

Unless you are very high income you can't do it all at once.

I'd disagree with this. If you are earning a very high income -- lets say a GROSS of 250K and only saving 3% of gross or $7500 a year (because you got auto enrolled in a 401(k) plan a couple of years ago)... I suspect it's kinda hard to just bump up the 3% contribution to 15% ($37500). Taking a $30,000 (or so) hit a year in net income isn't something someone who's use to living on an estimate of 145K a year is gonna be able to easily do. You'd have to cut back your lifestyle quite a bit!
It's far eaiser to start out saving and then slowly increase the amount saved over time. And I'd say just about anyone can save something...

That is why everyone always suggest to start early this way you get used to living on less.

Start early and forget about it

[lynnerself]

I agree with the OP that there are times in your life plan when managing the 15% retirement along with everything else is hard. We always had full insurance etc. But when there were 2 kids in day care, we were only contributing the minimum needed to get the 401K match. So about 4% of our money and 4% match. And a very small amount to college savings. The key for us was as these expenses went away, we saved that money instead on spending it on other things.

We (like so many others) are doing it the "wrong" way. Little in retirement in our 20s, more in our 30s and maxing out things in our 40s and 50s.

[Deleted]

Apr 6, 2011 10:39:06 GMT -5 lynnerself said:

We (like so many others) are doing it the "wrong" way. Little in retirement in our 20s, more in our 30s and maxing out things in our 40s and 50s.

I don't think it is the "wrong" way per say, it is the way that worked for you / in your particular situation.

[lynnerself]

Apr 6, 2011 10:55:04 GMT -5 TheHaitian said:

Apr 6, 2011 10:39:06 GMT -5 lynnerself said:

We (like so many others) are doing it the "wrong" way. Little in retirement in our 20s, more in our 30s and maxing out things in our 40s and 50s.

I don't think it is the "wrong" way per say, it is the way that worked for you / in your particular situation.

I mean "wrong" in the sense that the advise is always about how much more you can make if you invest early and let it compound for years and years.
money.cnn.com/retirement/guide/investing_basics.moneymag/index.htm
For many people this just isn't possible. Large contributions are not possible until later when kids are gone and income is at its peak.

[txengineer]

Apr 6, 2011 8:22:15 GMT -5 The J said:

My net is 57% of my gross. That's after 20% to retirement, taxes, LTD and my medical and transportation flex contributions. I also save approximately 13% of my net.

My numbers are fairly close to J's