Sterling said:
@Jai
That’s a solid match!
Must be Meta!
$884.61 bi-weekly for my 457b, about $23k total. Next year, I’ll increase it to $23.5k. Also, I put $25 a week into a 529 for one of our kids, while my spouse does the same for the other. Planning to max out a Roth once my spouse finishes grad school.
@Quinlan
What kind of job lets you have a 457 plan?
I think the real question is the percentages. How much of your income goes to housing, how much to savings, and so on? Saving $5k a month on a $500k salary is OK… but saving $5k on a $200k salary is impressive.
My savings rate is over 40%.
@Katherine
Both numbers matter. How much disposable income you have makes a huge difference.
Logan said:
@Katherine
Both numbers matter. How much disposable income you have makes a huge difference.
To each their own, but for me, it’s all about the percentages. Anyone who can save 30% of their income is doing great. A dollar amount by itself doesn’t say much.
@Katherine
30% alone doesn’t tell me much. Let’s say I earn a million and save 30%… that leaves me living on a lot. Income and percentages both matter.
River said:
@Katherine
30% alone doesn’t tell me much. Let’s say I earn a million and save 30%… that leaves me living on a lot. Income and percentages both matter.
I see it differently. If you can live on 70% of your income, you’ll be able to save enough to grow your wealth. It’s all about whether you can live within that 70%.
@Katherine
I hear you, but if I’m making a low income, saving 30% might still leave me struggling. It’s got to be a balance.
River said:
@Katherine
I hear you, but if I’m making a low income, saving 30% might still leave me struggling. It’s got to be a balance.
Totally, but if you can live on 70%, whatever your income is, you’re setting yourself up to do well in the long run. It’s all about that balance.
@Katherine
I get that, but it depends. Saving 30% on a small income isn’t the same as saving 30% on a big one.
Logan said:
@Katherine
I get that, but it depends. Saving 30% on a small income isn’t the same as saving 30% on a big one.
That’s fair. But if someone can live off 70% of their income, that’s a good sign for long-term saving. Income matters, but so does discipline.
@Katherine
Totally agree.
@Katherine
I’ve been putting 25% into housing for 30 years.
I also keep cash for a year of household expenses. Inflation doesn’t affect a fixed mortgage.
Ray said:
@Katherine
I’ve been putting 25% into housing for 30 years.
I also keep cash for a year of household expenses. Inflation doesn’t affect a fixed mortgage.
When you say 25% for 30 years, are you renting? Or has your income stayed pretty steady?
@Katherine
I own a house. I live in a high-cost area, so 25% is about the norm here. If I rented, it would be similar. I’m a middle-income earner.
If I get a raise, the percentage might drop. I could get laid off, though, so I’m prepared for that. Property taxes are going up, which affects escrow payments. I refinanced in 2021 to take advantage of low rates, which did bump my payment.
@Ray
Makes sense. I just found it interesting because most people’s housing costs go down as they earn more over time.
I’m 30 and just starting… about $250 a week, which is $1,000 monthly and $12,000 a year.
I aim to max out tax-advantaged accounts and keep a solid emergency fund. Over 25 years, this has worked well for me. Anything extra, I put toward travel and enjoying life. I don’t want to miss out on experiences now, but I also want to retire comfortably someday.
$7,000 monthly.