Average Retirement Savings by Age

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Tradeking - Discount Online BrokerI don’t put much stock in most “averages,” whether they’re rules of thumb or average net worth, but every once and a while it’s good to know where you stand.

So where do we find the average retirement savings by age? We are forced to rely on the internet. Unfortunately, with the recent stock market crash, writing about nest eggs and average retirement savings hasn’t been very popular. To get data, we turn to the Employee Benefit Research Institute’s latest report on Individual Account Retirement Plans (August 2009).

The EBRI’s report has a ton of detailed information on almost everything you might want to know about retirement savings and participation, from defined contribution plans to IRAs. For the purposes of our comparisons, I’ll just look at the age breakdown (2007 figures adjusted to 2009):

  • < 35: $6,306
  • 35 – 44: $22,460
  • 45 – 54: $43,797
  • 55 – 64: $69,127
  • 65 – 75: $56,212
  • 75+: (sample size insufficient)

Some words of warning after you read this:

  • Remember that this data is just data, you can’t draw any conclusions of what’s right or wrong from the statistics alone.
  • If you’re “below average,” you shouldn’t feel bad about it. Age is not a good indicator of where you are in your life. Some people get a later start and others have a more inflated lifestyle, how much you’ve saved by when should only give you a bar to reach.
  • If you’re “above average,” you shouldn’t rest on your laurels and think you’re doing great. Much like the words I wrote for those who are below, being above doesn’t mean you’ll have enough for retirement. You have a few years until retirement, a lot can happen then, so keep at it.
  • Average doesn’t mean someone in their 20s that has more than $6,306 is set in retirement (or that someone with less is screwed). It’s estimated that you should spend about 4% of your nest egg each year. At 4%, your nest egg should last long enough. How does that 4% figure translate to your estimated yearly expenses? Divide how much you think you’ll spend by 0.04 and you have your target (based on that rule of thumb) – $50,000 a year requires a nest egg of $1.25M.

Much like average net worth, it’s useful to know where you stand but don’t put too much stock in it.

How do you stack up? 🙂

{ 284 comments, please add your thoughts now! }

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284 Responses to “Average Retirement Savings by Age”

  1. imposter222 says:

    Scott has the right idea, but I would also piggy-back on his calculations to add that you should consider a high and low earnings rate on your retirement savings being conservative with your numbers. That’s because our economy is suffering from very high unemployment rate which will remain for many years to come, and the ability of investments to return 5% might be on the high side – or too optimistic.

    Look at what government treasuries are returning for ten and thirty years, and what long-term mortgages are costing today. That should be a clue as to the long-term prospects of earnings for some years to come.

    Just make sure that your retirement investments are well diversified.

    • Scott says:

      This is true. I’m only getting 3% or so right now on most no-risk investments. You may want to look at a few high dividend-ers, maybe a telco, oil or utility stock. They all are paying 4-6% dividends and seem safe as they only pay out about 1/2 of their profits to dividends.

      Heck, even Intel is paying 3% and is only paying out 35% of profits…

  2. Peter says:

    When you consider the average salary in this country, it is next to impossible for average people to save enough for a decent retirement. Discussions about retirement are typically centered around “are you saving enough” as opposed to “are you earning enough to retire comfortably”.

    Considering that the typical company match is only 3% of base pay, the company you work for only needs to contribute $1,800.00 a year for an employee earning $60,000.00/year. Not a bad deal for the employer in my opinion. It is curious that this interpretation generally does not appear in articles on this topic.

    Remember that a pension could potentially deliver anywhere from 50 to 80% of the employees salary. For that same $60,000.00 income earner, the pension would have supplied anywhere from $30,000.00 to $48,000.00 per year. If we use treasuries paying 3% as a guide, how much would you need to save to generate that amount of income. The answer is $1,000,000.00 or 1,600,000.00 depending on the two payout options I presented above.

    Some of you have saved this amount of money and that is great. The thing to remember is that YOU provided the bulk of the savings not your employer. I am surprised that Americans never took up torches and pitch forks when this transformation occurred.

    I am aware that pensions have/had their problems, but those problems could have been addressed without gutting the entire system. The current retirement system speaks for itself and what it says does not sound very good. So I ask you, are you paid enough to retire?

    • Scott says:

      I would not want to rely on a system (pension or SS) as I’m pretty independent and don’t exactly trust either have your best intersts at heart. I don’t mind saving extra to “control” my destiny.

      We are not “wealthy” by any means, I’m just trying to save enough to pay the basics from the interest earned. I’m just hoping the returns on bank accounts / CD’s will improve by the time I get there…

      I hope the SS & pension is there, but I’m not betting on the SS since they’re already talking about raising the age to 70…fyi, I’m 40 (wife is 46) for information sake. We had annual income of 80k when married…so not really that abnormal from the “average” person.

  3. imposter222 says:

    Scott, We don’t consider ourselves wealthy by any means, but we have saved and invested wisely/conservatively during most of our working years.

    I respect your planning ability not to depend on social security or on any pension; the only guarantee is what you save and earn between now and your retirement.

    Just continue to invest on a regular basis that allows cost averaging with some good funds and several that pays good dividends. Always keep a portion of your investments in treasury funds; intermediate and long-term, and increase your bond holdings as you get closer to retirement.

    You’re doing fine.

  4. imposter222 says:

    Peter, The old saying, it’s not what you earn but what you save holds true no matter what income level he/she earns.

    When I met my wife in the early sixties, she had saved over $8,000 as an RN, and they were earning peanuts back then.

    Early in our marriage, I told my wife we will save 15 to 20% of our earnings for our retirement, and we stuck with that commitment even when times were hard.

    However, I must admit that in good times, my earnings were pretty good doing consulting work. I wanted to move to a bigger, newer home, but our older son said he didn’t want to move because his friend lived on the same block, so I invested in income property.

    We even had a share in a condo at Incline Village at Lake Tahoe.

    All throughout our working years, we made every effort to save the 15 to 20%.

    Fast forward to today: My wife and I are now both retired from work; she from being a Nurse, and I was lucky to have worked in management for most of my working career.

    I now travel around the world. You can see my travelogues on Look for me as c.i.222.

    Saving for retirement is a necessary part of working and living. If you’re earning $60k/year, invest some of that for your retirement. Do whatever it takes to meet that commitment.

    • Peter says:

      Hi Imposter222:

      My question was a hypothetical one challenging the commonly accepted premise that the current relationship between employer and employee is “fair”. Conventional wisdom says that the employee should be grateful to the employer for providing the job as if it is NOT a balanced and mutually beneficial agreement. The trade is the employers money for your heartbeats. Can anyone say that the real beneficiary in this “balanced” relationship is the employee?

      I came up with the notion of “do you earn enough to retire” as a challenge to conventional wisdom. I wanted to ask if employers are contributing a “fair” amount the the employees retirement. I realize that the definition of “fair” is somewhat subjective – but you all get the idea. I argue that the economic burden in this matter has gradually shifted from the employer to the employee. After all, the bulk of your 401K was generated and saved by you and not a benefit from your employer. Do any of you recall a public debate when the national retirement policy shifted to what essentially is an employee funded plan. Does anyone here believe that corporations did not gain a windfall with this “improvement”?

      Another thought centers around the fact that a most salary’s are compacted in the general range of $0.00 to $100,000.00. Earning a six figure income in the US is rather rare, and a surprising number of professionals do not breach this level until well into their careers if at all. I find this artificial, since logic dictates that there should be a smooth distribution of incomes without the asymptotic limit at or around $100,000.00. Name the profession that generates an “AVERAGE” income of $117,500.00 or $123,357.00. Not to say that individuals do not earn this amount (and more) – but I am speaking of averages.

      Stated another way, I find the salary compression between 0K and 100K curious and an artificial construct in a so called free economy.

      Just some things to think about.


  5. Retired in CT says:


    You and I are probably close in age. Early in our careers, companies were more paternalistic. As you noted, this has changed. Each year, the relationship shifted. Now, if the choice were between an employee or meeting a quarterly profit estimate, the employee is out. It happens all the time.

    The counterpunch to their attitude is to leave and go elsewhere. This strategy has its own risks but in the long run, it works out. Recognize the quid pro quo: if companies don’t care about you, adjust your loyalties.

    I know of many professions that are above $100K. Examples: medical sales, some engineering disciplines, private equity finance, etc..

  6. imposter222 says:

    Most things we do in life are “artificial.” Who says a football player should earn several million per season compared to most doctors who earn about $200,000? Who’s skill is more important to society?

    If you have studied Econ 101 in college, you would have some of the answers for this.

    On the flip side of this cockeyed wage/salary incongruity is what happened during the past decade or so to middle class and the poor’s wages and benefits while the CEOs and directors awarded themselves obscene wages, benefits, and fees. I just observed this past week that an officer of one company gained over $10 million on his stock option. That’s stupid; nobody “earns” that kind of money as an employee or officer of any company while the wages and benefits of all the other workers of the same company remain stagnant, and they continue to lay off workers.

    All those people never learned about fairness or ethics, and greed has taken over.

    The average salary in our area is one of the highest in the country, but the cost of living is also one of the highest. Buying a home is out of range for most new workers, and default on mortgages continues on.

    The very greed that these officers and directors award themselves are the very reasons why our economy is in the pits. If they had the foresight to share in the wealth of the company with all its employees, our economy would be in much better shape.

    • Scott says:

      Some would argue the football player has a very small window to “earn” his lifetime earnings due to the nature of a damaged body and there’s also the other many jobs a team creates (TV ala ESPN), construction of stadiums, etc.

      A doctor, although very important to society, does not encourage a ton of jobs & is a lifetime career that will payoff over time and they can practice past 70 if they want. Not to mention the likely personal satisfaction of the job.

      The thing that docs should not have to do is jump through the Medicare & Insurance hoops so much. That takes away from them focusing on fixing people and looking for the next “big thing” to bill Medicare to pay the employees (I speak from experience as a friend works for a group of Cardiologists and had to buy equipment that would make up for the lost revenue of Medicare cuts). Since they mainly work on older clients on Medicare, they get 80% of their revenues or so from Medicare…

      I have to say I generally agree with you on the employee / employer loyalties. I’m fortunate to work for a small business where they actually do care for their employees more than most. I’m a upper-level peon in a tecnical spot and they actually look at the person here (amongst 150 employees). I’m glad to say there’s still a soul here…

  7. Retired in CT says:


    You must be a fan of Obama. He will morph this country to where all citizens are the same. GDP will drop, quality of life will drop, and we will no longer be No. 1 in the world. But hey, everyone gets an equal share of the smaller pie. Fair, no?

    Greed, competitive spirits, drive; call it what you want, it drives this country. Those who have it, get the most. Fair? In your eyes, no.

    Most people figure out the game early in life and choose a way to go. There are professions where unmitigated greed and competitiveness brings home lots of bacon. Examples: stock trader, sales, entrepreneur. Some with less determination, drive in the slow lane and accept salaries less than $100k. These people are happy and so are the greedy types.

    My point is that one cannot choose the slow lane and complain about those who have more. If you want more, you can get more by taking a chance in life. If this is not you, then just be happy that you live in a prosperous country.

    There is no conspiracy in this country to keep people down. Nor is it true that unfettered greed is necessary and sufficient in the attainment of a higher standard of living. Just do something special.

    • Scott says:

      Hey, get out of my slow lane…I’m busy working for my pitance of a salary!!!

      I’m that slow little, old lady in the slow lane…driving a Ferrari.

  8. Andy says:

    It is amazing how “we the people” tolerate corruption and non-sense. Our congress has raided the SS trust fund, raised the payroll tax continually over the years, will shift the burden again on the people by raising age requirements and payroll taxes. Then for the past decade they have the audacity to convince the people not to expect to receive their SS paycheck because the system is broke.

    • Scott says:

      Can we change the stripes of a Tiger? Unfortunately not. Live honestly for yourself and hope you do well enough to offset the coruption in any system.

      Help people in need, enjoy your family and to some degree, stay out of politics will do wonders for your blood pressure.

    • Retired in CT says:

      Americans tolerate the BS in Washington because it’s part of their nature. Nonsense you say? Follow my logic:

      A rational person would not raid SS nor build Grecian size debt with the biggest bondholder being China. This travesty has accumulated over decades.

      But look at the average American. They keep balances on the credit cards. They float a HELOC to buy vacations. They all think that the next pay raise or increase in property value will wipe out the debt.

      So is it a surprise that this dismal financial management scheme plays out in Washington?

      The sad part is that the financially sound citizens will also bear the cost of digging out of our mountain of debt.

      Everyone should learn Mandarin Chinese.

      • Scott says:

        When taxes outweigh working for a living, the “sound citizens” will be moving to a country that will not tax them and appreciate their monies. This is not a threat, my wife and I are really thinking this way (and know others who already have). We can always come back to visit family and have a much better way of life elsewhere (financially anyhow). In the meantime, we’re saving all we can for that moment in time.

        I know a family who has learned Chinese; as a matter of fact, two of their kids are in China now for almost a year and loving the “experience”. I’m afraid that the debt here will come home to roost one day; just don’t know when…

  9. imposter222 says:

    Andy, Most of us know how long we knew about the “crisis” facing social security, but congress has failed to act on it. All they need to do is a combination between increasing the age for benefits, and an increase in taxes.

    Conservatives don’t want any tax increase, and the liberals do not want to increase the age for benefits.

    Congress is impotent and a useless bunch, who belongs at home looking for jobs.

  10. imposter222 says:

    Retired in CT, You are wrong; greed has caused the middle class to lose buying power while the CEOs and officers of companies gained at the cost of fairness and ethics to the rest of the workers at the same company.

    No CEO is worth millions on their stock options while they lay off workers, and cut the wages and benefits of the rest of the workers.

    That has nothing to do with “opportunity” or “what drives this country.” Many college grads now have difficulty finding a job; all while these CEOs and officers lay off more workers to make more on their stock options.

    Greed in a level playing field based on ethics is okay – to some extent. We all have some greed to want to support our families well with a decent shelter and food to eat. We don’t need a yacht when it’s based on laying off workers with families.

    Your hats on crooked.

    • Retired in CT says:


      I wish I were wrong about greed but it appears not.

      All CEOs must answer to the shareholders. This gives them the right and the duty to lay off people for the sole purpose of preserving shareholder value. Is this ethical? Not in your eyes nor mine.

      The issue not ethics but who has the power. The answer to this riddle is to not fight them but join them.

      And don’t be looking for Obama to save the country. American style capitalism is still better than socialism.

  11. imposter222 says:

    CT wrote: “All CEOs must answer to the shareholders. ”

    Your statement may be accurate, but not realistic. How many shareholders really know how companies are run? Can you say “enron?”

    • Retired in CT says:


      I am a shareholder in many companies. It is true that I know little about how companies are run.

      However, I know that the CEO looks at the share price and acts to preserve or raise the share price. This is all I need to know.

    • Scott says:

      The only time they “answer” is when the drive the company into oblivion…then everyone loses, employees, stock holders, debt holders.

  12. Peter says:

    Response To: Retired in CT

    Actually, I am not a fan of Obama. In Nov 2012, I will do my part to remove this fraud from office. On the other hand, not being a “lib” does not imply that I have blanket allegiance to failed capitalist doctrines.

    I do not have a problem with capitalism, but I dislike unbridled capitalism. Government often does more than it should in areas requiring little oversight and too little in areas requiring heavy governmental oversight. It is apparent that collusion between government and corporations has created a tag team that is not operating in the best interest of most Americans.

    Your “slow lane” theory sounds good on the surface, however it excludes many less intelligent individuals from retiring with dignity. As I have stated before, many people simply can not generate a cash stream large enough to meet current expenses and save enough for retirement. These people may be hard working – though employed in areas that have lower pay scales. In today’s world, I know I do not need to give examples of the current crop of service jobs meeting this criteria. Should all such workers be condemned to the lifestyle likely to result from such policies?

    I am not looking to enforce some sort of communist redistribution plan – but rather to have people keep a larger portion of the capital their efforts generate. Generally, CEOs are able to be paid tens of millions of dollars at least in part because their employees are under compensated. This must end!


    • Retired in CT says:


      You are picking on one person, the CEO who in your eyes is overpaid. Leadership is a very difficult job and the pay follows.

      But what about the other millions of people that retire without a hitch. Are they overpaid?

      Retiring with dignity seems to be the issue. I believe all people should retire so. Working during retirement is not so undignified.

      My point is that the slow lane folks have had a stress free life. Those who get into jobs that pay well will always have stress. The benefit is a well funded retirement.

      Society has no obligation to assure a retirement. It is up to the individual to make it happen. SSI plays an important role. I have seen people of very modest means retire very well. Rather than bemoan the lack of cash flow, you should have made plans much earlier in life. It’s not that hard.

      • Scott says:

        My 2 cents…my mom and step dad get a whopping $1200 monthly and live a modest life on this. They have very little savings (<$40k) and somehow make it with the system and are not undignified. Maybe they do not know what they do not have, maybe they do not put much value on growing their bank account. They, at least, have never been a drag on the system.

        It does lock them into a basic lifestyle and where they live, but they don't complain about the "system". People adjust to what they have and you choose to be happy or tick'd off…

        I try to do better and have been able to save a buttload (relative to me) and I try to be able to help my family while succeeding without a college education. I started thowing papers at $40 / month at 10 yrs old, making $3.35 / hr at 16, $6 / hr at 19 and now making a modest $75k at 39. If you work hard save along the way, you & your kids will be fine…

  13. Anonymous says:

    Peter, You mirror my observations and criticisms. Unfortunately, middle America has very little power to change what ails our country, because of the rotten way our government operates today.

    In a way, I’m glad I’m over my working days, because wages and benefits for the middle class makes it almost impossible to survive in today’s world. I worked most of my career during the generation when wages and benefits were more equitable for all workers, and not top-heavy like it is today.

    CEOs and officers of companies who fail to see their own greed are the culprits, and I don’t see that changing any time soon.

    I feel sorry for all those new grads who must look for jobs.

  14. Anonymous says:

    Retired in CT, I don’t think you know what you re talking about. I’ve worked the majority of my working life in management positions, and enjoyed my job. It’s because I was able to increase wages and benefits at the places I worked, and the board of directors trusted my judgment. It was not always increases – there were times when I had to recommend salary cuts, but the long-term effect was better wages and benefits for all employees. I was also able to recommend some long-term investment for the boss I worked for in a privately owned company. He developed land in Cupertino, CAlifornia, and have leased his buildings to Apple Computer since the mid-seventies.

    • Retired in CT says:

      I am not quite sure what point of my you think I am off base on.

      • Tak Nomura says:

        Retired in CT, You said “My point is that the slow lane folks have had a stress free life. Those who get into jobs that pay well will always have stress. The benefit is a well funded retirement.”

        I got paid pretty well in management positions, so what “stress” did I suffer from? It was more like job satisfaction for the ability to increase the wage and benefits of the workers of the companies I worked at.

  15. Peter says:

    Retired in CT, it was not my intention to pick on any CEO. I was simply pointing out that salaries for many workers are artificially “capped” (at what I believe are below market levels) while CEOs can increase their incomes without bounds.

    I think that retiring “without a hitch” is not representative of being overpaid, but rather how the system should treat people that play by the rules. The problem is that the rules change – and usually not for the best if you are a general cog in the workforce.

    I am not in the “slow lane” (using your terminology) but I still worry about what this corporate/governmental hybrid will do to me and my family over time. I am not a fatalist, but you have to admit that the middle class is being systematically dismantled in this country. The mantra of “just keep doing what you are doing and you will be fine” is not a probable outcome in today’s world.

    Ingredients of the current economic cake:

    1) Fixed income returns essentially nothing. A 0.2% yield (like many money market funds provide today) will double your money in a mere 36,000 years. Sounds good to me!

    2)The stock market has a habit of “harvesting” investors over time. If you are “in big” during one of the larger harvest cycles, you may never recover.

    Firms use computers to practice something called high frequency trading. This little gem, allows them to go in and out of an “investment?” rapidly so that small amounts of $$$ can be skimmed off with each transaction. How does this help grow the economy? The markets are in theory there to provide capital for economic expansion. How does this nonsense grow the economy?

    3) Women entering the workforce effectively doubled the available pool of employees. The rules of supply and demand drove down the wages so that employers now get two workers for a little more than the price of one. Throw in the shift from defined benefit plans to 401Ks and thing got even better (for some).

    4)The US immigration policy is decreasing the quality of American life and driving down wages. It is difficult for US workers (legal) employed in service related jobs to support themselves when there is an invading army of people who will work for below market wages, often without paying taxes. Don’t kid yourself that these are the jobs that Americans do not want to do (landscaping, painting, carpentry, roofing, construction ect………).

    5) Throw in “health care”, the national debt and a host of other concerns and you have a real mess. For many older citizens, things worked out in the past because the economy and government were DIFFERENT then. My parents purchased a home in the 1960s for around 20K and sold it in the late 1990s for over 475K. Do you really think any 25 year old will see this type of return in their lifetime? I am not saying that this was a good thing – but it does point out the differential between the past and present reality.

    The fact that federal employees earn significantly more than private sector workers is being used as “PROOF” that federal workers are overpaid. Is it reasonable to ask if private employees are underpaid? What is the metric used to support their contention?

    Sorry for the rant … but this stuff is really annoying.


    • Retired in CT says:


      Your assertion is that an honest person who works hard and manages his life well cannot win. There is no way to play the game within the rules and emerge a winner. And finally, the only way to win is to use performance enhancing means such as high frequency trading.

      Many events have changed the market since your parent’s time. The most profound is that the barriers to a world market have fallen. This is the cause of outsourcing. Is this good or bad? If you’re a union worker, this is bad because your artificial monopoly crumbles. But in whole, it’s good because we now have broader access to ex-USA markets. However, it may take some time for the pendulum to swing to the other side.

      I like your “harvesting” analogy on the stock market. In the last decade, we’ve had two bubbles burst that caused harvesting. Another bubble is forming right now with the fixed income craze. When the Fed announces the first step up in rates, this market will be “harvested.” The fear of the stock market drives lemmings to the fixed income enclave. Little do they know that they are being set up for a killing.

      To close, I think a person can win in America. Every generation has its challenges. Your parents lived through the depression and WWII. We are no different.

  16. Tak Nomura says:

    Peter, Excellent post; wish I had written it. You covered “all the bases” of what’s gone wrong in this country.

    What I find most fascinating today is the fact that conservatives (most in the middle class)still want tax cuts for the wealthy (the top earners), because they say their investments will create jobs. They can’t see what has happened since GW Bush’s tax cuts. Their ability to see reality is non-existent. All this while schools have been cutting funding to teach our children, and to maintain our country’s infrastructure. Conservatives love to support war which only brings us more misery (families who loses sons and daughters, fathers and mothers) while our federal deficit grows.

    There’s no common sense left that will sustain our country’s economy or politics.

    I’m happy to be living in that generation where we had the opportunity to work hard, and make a decent living. That world doesn’t exist any more.

    • Scott says:

      Man cannot rule man via war. It’s sad to see death and destruction. I don’t feel you can change a people’s “way” by force or regime change and yet some think that war will change them…

      Regarding the tax cuts… the $250k of 12 years ago is probably more like $150k of today after inflation. So should we inflation adjust the salaries and taxes? I think that is fair personally. If you did this, it would probably be $350-400k. Maybe I’m splitting hairs, but I just try to be fair in dealing with all…treat others the way I’d want to be treated.

      • Tak Nomura says:

        Scott wrote: “Regarding the tax cuts… the $250k of 12 years ago is probably more like $150k of today after inflation.”

        In the first place, middle class salaries have not progressed beyond inflation rate for this 12-year period, so your $150,000 looks too low to me. What has actually happened from what I have observed is that most middle class and the poor gained very little in buying power while the top 1% gained huge amounts.

        Even in the San Jose-Silicon Valley area, average income is one of the highest in the nation, and it’s about $75K. Those earning $250,000 today are wealthy – income-wise.

        Scott wrote: “So should we inflation adjust the salaries and taxes? I think that is fair personally. If you did this, it would probably be $350-400k.”

        As I have stated earlier, only the top 1% of income earners make over $250,000. If you’re talking about fairness, it seems fair to this taxpayer that those making over $250,000 pay more in taxes to pay for a) reducing our growing deficit, and b) pay for two wars – while we ignore our schools and infrastructure.

        Scott wrote: “Maybe I’m splitting hairs, but I just try to be fair in dealing with all…treat others the way I’d want to be treated.”

        I’m not so sure it’s about splitting hairs; it’s about ability to pay at a time when our unemployment is running at 9.5%, and more middle class families income and benefits remain stagnant or are being reduced.

        • Scott says:

          “middle class salaries have not progressed beyond inflation rate for this 12-year period”

          In 1990, I made $8 / hr, in 1998, I made $38k at age 28, in 2010, I make $75k at 40. My personal experience is working hard will get you raises and will keep up with inflation. From 98 to 2010, I’ve had an average of 6% increases and I would imagine inflation is around 3-4% for that time period.

          I know this is my personal experience and may not include “most”, but I look at my not having a college degree (percieved disadvantage by some) and I have to have some optimism in my personal experiences.

          My wife has done better than I…being at $40k in 98, now at $150k. Again, no college education and both of us in the private sector (manufacturing & insurance).

          “the top 1% of income earners make over $250,000. ”

          Actually, I’ve never looked, but it seems the top 1% is more like $410k and above in 2007, $388k in 2006, just to make things a little more accurate. I wouldn’t oppose the top 1% as this comes in at what I mentioned before regarding the “tie taxation to inflation” vs. someone’s opionion of what one group should pay based on the lesser group. Let’s make a rule based on #’s and not “feelings”.

          I would also say the cost of living in any given area should also be taken into account. Someone making $250k in Cali or New York City is really making half as much as someone making this amount in, say Dallas TX or Atlanta, GA. I think there should be an adjustment by the Feds on this too. While you’re at it, take into consideration the state taxes paid too. 9.5% in Cali for a $250k earner…about $20k, Texas…$0, Florida…$0, Tennessee…$0

          Again, fairness and setting a standard that is fair to all tax payers, not just the majority.

          • Tak Nomura says:

            Scott, Congrats for doing well, but we’re talking about averages that includes most American’s earnings and benefits.

            As for state taxes, they are deductible on the federal, so it does even out a little.

          • Scott says:

            You have a point, but I really was doing better when living in Texas. We were able to deduct the sales tax since we had no income tax. We also had a paid for home, so the deductibility only applied to the amount over the stadard deduction, so the first $11k was no benefit unless we up’d our charitable contributions, which we do regularly.

  17. Tak Nomura says:

    From Wiki:
    Household Income Distribution:

    Bottom 10% $0 to $10,500
    Bottom 20% $0 to $18,500
    Bottom 25% $0 to $22,500
    Middle 33% $30,000 to $62,500
    Middle 20% $35,000 to $55,000
    Top 25% $77,500 to $92,000
    Top 20% $92,000 to $167,000
    Top 5% $167,000 to $250,000
    Top 1.5% $250,000 to $350,000
    Top 1% over $350,000

    • Scott says:

      I went to the and got this answer for 2008 top 1%…
      Top 1-percent Adjusted Gross Income (AGI) break (TY 2008) [3,4] $380,354

      I think the Wiki answer was for 2005…

      • Tak Nomura says:

        Your IRS’ AGI proves the point that the top 1% enjoyed a larger increase in dollars that makes all the difference in purchasing power. That number almost matches those in the middle class who earns $30,000 to $55,000.

  18. Tak Nomura says:

    It’s not only income taxes that are not “equal” based on the cost of living. It’s also government benefits that do not take into account the cost of living.

    With all the different variables of all the cities, counties, and states in the union, I’m not sure how they can “equalize” taxes or benefits “to make it fair.”

    We have a choice in where to live, and thereby accept the living conditions of our choice. That doesn’t mean everybody has that choice; because for many, it’s economically impossible.

    In a capitalistic country, we accept it, because there are things we can do to improve our life – to some extent.

    I believe industry and our government has failed the middle class and the poor during the past decade or more. We’re partly at fault for re-electing representatives who cater to donors more then the general public.

  19. Scott says:

    Equalizing, I agree, is probably not realistic in our messed up world. I personally do not rely or take into consideration what pops government will do for me; I’m just wired independent of welfare in mind. If I ever get into that unfortunate situation, I know its there…

    I know a few who are in this situation with losing their job and I’d rather them ask me (or me offer) help than jump through the feds hoops to be assisted.

    Again, I actually fall into the small group that will actually benefit from going back to the old tax laws. I just try to think what I would want if in different tax brackets knowing that I pay in $60k+ in fed and state taxes.

  20. Optomist3 says:

    Any similar stories. When I first started working, they just started the IRA and since I didn’t make much and the company didn’t have a pension plan, I qualified and contributed $2k per year. Four years later, I made over the limit and didn’t qualify so no retirement savings for me. Three years later went to work for a company with a traditional pension plan. 5 years went by and they eliminated the pension plan (no accrual for me with just 5 years there). But, they started a 401k with a match. Fast forward 20 years. They just eliminated the 401k match, but now regularly send us newsletters urging us to contribute own own earnings. So where have we gone. Traditional pension never vested. 401k great for 20 years. and today, ZERO plan, no pension, no 401k match, no healthcare benefits for retirement. If you are you and starting now (with my company), you are on your own when you retire. The retirement system went from a guarantee to zero (in my case). Sure glad I am not just starting out now. Feel bad for all of the new young workers.

    • Scott says:

      I must agree with you there. My wife’s pension just cancelled for new hires. Instead, they get a 401k matching dollar for dollar up to 6%, but I would imagine they will not do that forever. My wife thankfully has the pension and the 401k to work with. I personally have never worked for a pensioned company nor one that contributed to the 401k. I’m on my own in that respect, but at least I’m in control of my own fate.

      The younger crowd definitely will have a tough time. They will have lower wages after inflation if they find a job at all right now. I would encourage anyone to save as high as 50% of your salary if you can. Too many rainy days a coming…

      On another note, I got my projected SS benefits this week. I always get a laugh out of these as my current retirement age is 67 and likely to go to 70 before you know it (I’m 40…). At least I’ll get $2k / month in 30 years…that’ll be worth $500 by then…such a sad economic time we live in.

      Make your own way or get out of the way…that’s what I feel like right now.

  21. Tak Nomura says:

    Scott, I agree with your post 100%; the kids now graduating from school will have a very difficult life ahead of them. Those of us lucky to have lived during the “best years of our lives” of economic opportunity will be the last generation of Americans to have secured a pretty good life for ourselves. The top 1% who are making those millions in wages and benefits are killing the golden goose, by their greed.

    The saddest issue now facing this country are the conservatives who do not wish to tax the wealthiest amongst us to pay for our government services; they’d rather see our deficit increase to leave for our children to pay.

    Our lopsided economy will destroy us all; it’s only a matter of time before our capitalist society will self-destruct.

    Ain’t greed wonderful?

  22. Scott says:

    A measure of greed is good. Everyone in the upper corner office just got out of that measure. I’m one that will actually benefit from the Bush tax cuts changing. $209k-$250k will get a tax break, although I don’t think this is fair as no one else is getting it. I wonder why this little window is there???

    I’m looking forward to the reverting back personally…thanks, Mr. O!

  23. Tak Nomura says:

    I agree! We all have some measure of greed; it’s a good motivator to do well in school and work – to succeed; to provide for one’s family.

  24. Andy says:

    Tax the “rich” — making over $250,000. per year according to Obama during his campaign. Help those who really can’t help themselves but the rest should pay their fair share — nobody should get a free ride. And yes greed of Wall Street, The Bankers and some CEOs have really hurt this country but government has done and continues to do the most damage — by far. Talk about killing the golden goose — taxes, employment laws, law suits, paperwork/forms, etc. make a person wonder why anyone would want to start or own a business today.
    P.S. — I don’t make anywhere near $250K nor do I own my own business.

  25. Tak Nomura says:

    Andy, I don’t think anyone here has ever suggested we don’t pay our fair share. My wife and I are both retired, and pay our income taxes without complaint. We are not wealthy, but live a comfortable life.

    • Scott says:

      I think the “rich” are more at the $400k level, but I’m sure they think it’s at $1 million…everyone has an opinion on this. I’m just glad I’m not there…less stress on what is taken from me.

      I agree Tak, I pay my share without any creative tax breaks (still hurts). It pays to be honest…

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