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Breaking down the WCI budget that started it all

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  • Breaking down the WCI budget that started it all

    WCI graciously posted his budget to another forum a few years back as a new attending and I broke down his numbers to get an idea if my future attending financial plan made sense.

    My rough financial plan:
    1) Rough budget with minimal income of $200k split into fifths for ages 30-50
    20% "Thanks": Giving
    - currently my wife and I already tithe plus give about 5% in gifts
    20% "Save": Retirement
    - hopefully mostly in tax advantaged accounts, especially if an independent contractor
    20% "Duty": Taxes
    - good estimate on that level of income, especially with tax deferred accounts, large charitable giving, no state income taxes
    20% "Home": Mortgage + Utilities
    - 15yr <$500k, preceded by 5yrs of school loan repayment and saving downpayment
    20% "Sustain": Living
    - Food, Clothing, Transportation, Insurance, Travel (my favorite "toy")

    2) After 20 work years with 20% savings ($40k) = $1 million if conservative 3% real ROI = $40k/year with a 4% withdrawal rate that could sustain me from age 62-92 with a large "buffer" from social security and medicare.

    3) For years 50-62 start slowing my work hours down and living off my part time income. Worse case scenario: use this as a time to play catch up or make more of a retirement "buffer".

    WCI numbers in my categories:

    Income, Gross: 17647x12 = $211,764
    11.3% Giving = 1990
    22.8% Saving = 3406+622 =4028
    22.2% Taxes = 3925 (he lives in an income tax state)
    26% (21.5% w/o rental) Housing: 3180 + 816 + 608 = 4604 (3788)
    17.6% Living (kids included) = 336+829+1235+700 = 3100]

    How does your budget breakdown with these 5 categories?

  • #2
    About the same percentage wise, except for most of my "giving" goes to taxes.  No matter what I do (max pre tax savings and aggressive deductions), I can't get my overall tax rate under 30%.

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    • #3
      My wife is still resident. No kids. Our combined household gross is ~110,000. I don't budget but rather track.

      Here are our 2015 numbers:

      Giving: 12%

      Saving: 30%

      Taxes: 20% (though tax returns aren't done yet)

      Housing: 13% (including utilities)

      Living: 25% (including life and disability insurances)

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      • #4
        That is an impressive level of giving, no doubt.  I find the concept of tithing a bit outdated, since government has assumed many services that used to be provided primarily by the church.   I do have Donor Advised Funds that I hope to build up to about 10% of my nest egg by the time I retire.

        With a paid off home, I'm putting >50% of my gross income into retirement savings.  >30% goes to taxes.  My family of 4 lives off the other 15-20%

         

         

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        • #5
          Married, stay-at-home husband and 2 kids (with number 3 due any day now). This is about where my budget is at. 22% to retirement, 18% for home (low cost of living areA). We try to tithe, although we aren't currently managing to give 10% in large part because of contributing to the kids college funds. Taxes are low-ish, since being in the military means a chunk of my income is tax free, we have a rental home from residency that we take a small loss on, and the kids. I kind of regret the house, but that was before I'd heard of the WCI and it's water under the bridge now. It's a good budget, I think. We don't feel financially constrained, but I also don't loose sleep worrying over retirement or the kids future.

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