The Investment Thread

I don't want to get on too much of a tangent here, but savings rates are only one factor, and percentages are misleading.

I was talking to one of our technicians. We were talking about pay and how we all feel like we're underpaid (we are though). We've seen people switching companies and making really nice pay increases.

I told him they're criminally underpaid. I feel like They should be making $3-5 more an hour. And when I complain about being underpaid, it probably falls on deaf ears to them, since they are worse off. This all lead to our discussion on bonuses. We can earn up to 10% of our salary in a end of year bonus. I've gotten that or near it the last few years. They usually hover around 5%. (I didn't tell him I get more like 8-10%). But, the point of this, was that, what we jokingly said was.. (from his perspective), well your (engineer) 5% is a lot more than my (tech) 5%. and that when you're making lower wages, a % raise shouldn't be stuck at 3%, it should be looked at as a $0.50 raise an hour, or $0.75, or $1.00/hr raise. Percentages don't matter much under $20/hr.

So, a percent of salary that is going towards a 401k (hopefully with a company match) is one factor, but it's not the end of the world if it's low. For me, I'm at 6% (to get the full company match of 3%). And almost every year they give an extra bonus of company stock (they call it equity builder), of like 2% or so in the spring. And of course, someone making 40k/year putting 12% away vs someone making 80k/year putting 7% away.. the second person is putting more actual money away.

the other factor is where the company match goes. Most goes towards company stock. Some of if is flexible (i.e. you can pick where you want it), others aren't. For my company, it must go to company stock, but you can transfer it out. but, since our price has grown about 20% y/y, it's pretty stupid to pull out of it. When I was at Lockheed Martin, it was a 4% match.

The other factor is timing. We can't control that, but Gen X has gone through two sizable market downshifts/crashes. They've had a good amount of time to buy in at the lower price levels. So, while their savings rate as a percentage of salary is lower, their balances may not reflect that. It would be interesting to see balance distribution as a function of age group.

But it is funny. I was saving at a higher rate when I was young and single, than I am now.

However, next raise, I do want to bump it up.

All that being said, I've been working for 16 years in two different companies that both offered 401ks with a match. When I consolidated my 401ks together, I only skimmed a tiny amount off the top. But today, I'd put my 401k balance against most my age.