Poll - Your savings rate

[shalab]

It has been said that the savings rate of the US public as a whole has been negative and has recently changed to +6%. In this poll, let us figure out how much of our income we save and see how we compare to the Japanese/Chinese people.

 

e.g: if one earns $50,000 a year in the U.S, 7.4% will go to FICA, another percentage will go to state and federal income taxes and some for living expenditures and remaining will be saved. So, if one is able to save 5,000 dollars after all expenses, the savings rate is 10%. This includes contributions to retirement accounts 401(k), IRA etc. but doesnt include employer matching to the 401(k), IRA.

[stahleyp]

shalab,

 

why would you not include employer's match, assuming you're vested?

[Alekbaylee]

Hi Shalab,

 

Why should the rate be on the pretax or gross income? Looks to me the after-tax income would be more accurate, as we don't have much of control on the income tax we pay, no?

[Myth465]

I think when comparing world wide savings rates one has to consider the safety nets and entitlements offered in a country. I believe that if you need medical attention in China you must pay cash for it. That would cause anyone to save a huge percentage of their income.

 

Same thing if you get laid off. I dont think this is a good thing, and I believe it gums up the economy. Ideally you want consumers spending most of their income and saving probably 5% - 10% for a rainy day.

 

I think after tax is the best way to look at these sort of things.