Just How Much Can People Save Realistically?

There is no single answer to the question.

The generic answer is, it depends. There are too many variables to permit a general answer: income level, number of wage earners, number of children, spending habits of peers and associates, and so on, but most important, are your goal, your determination to meet that goal, and your diligence in seeking saving tips.

However, in order to have a target, initially set your objective at 10% of discretionary take-home income. Note, that is the recommended amount. You may observe that there is already an approximately 12% deduction for Social Security. However, that is not part of your discretionary take-home income. In retirement Social Security will only provide an income slightly above subsistence level. If you think that living on a one income level would be difficult, wait until you try living on Social Security alone.

It is widely claimed that a family cannot live on a single income today. It is a given that a family cannot live at a two income level on a single income; but one can live quite handily at a one income level on a single income. Some examples of the difference:

One Income Level Two Income Level
1 car 2 cars
1100 sq. ft. house 2200 sq. ft. house
Thermos of coffee from home 2 lattes daily from Starbucks
Brown-bag lunch Take-out from the deli
No-cable television RedBox, Cable and movie theater
Land-line telephone Cell phones for all


The list goes on endlessly; but, you get the idea. Search for additional saving tips from others who appear to be avoiding the stress of overspending. The two-income family living at a one-income level can save one-third or more of its income. But, even the one-income family can save something –just put away 1 percent before making any other purchases, one percent saved over a work-life will yield more than one year’s income in savings – a whole lot better than zero. And, remember, that’s a year’s income in savings from each 1 percent saved. For the two income family living at a one income level, that’s more than thirty year’s income saved for retirement – not counting Social Security.

There is the temptation to defer starting a savings plan until I’m earning a little more; and can afford it. That excuse will always exist – dump it!

Some saving tips:

  • Take advantage of your employer provided 401(k) and contribute the max. It’s found money.
  • Choose to live in an area where your neighbors live comparatively modestly. Your temptations to overspend will be reduced.
  • Determine how much your Social Security income will be and establish it as your base. Build from there.
  • Make saving a habit. Once established, the habit will be difficult to break.

So, establish your voluntary savings plan now; and enjoy a less stressful life and a more comfortable future.

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