There must be a formula for this done already,
is there a basic simple formula for calculating how long it would take the average person to save a years salary?
pls post here, email is blackholed...
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17 years ago
saving a years salary - what's the formula?
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- posted
17 years ago
It depends in which country your average person lives.
Average Brits save 16.7% of their salary, so it takes them six years not counting interest earned;
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Other countries will return different averages.
Cheers, Rusty
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17 years ago
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17 years ago
wrote
It depends on what you consider "average". Factoring in the employee's portion of any salary deferral (ie: 401K) and any company matching contributions, and factoring in the fact that not all employers offer pension plans of any kind, we could extrapolate the number.
With a 401K where 15% of salary is put back it would take about 7 years (not counting the income gains from the investments). If you decide that only half the workers are contributing to a pension plan, you would double that to 14 years+/-. But you could reduce that some by the folks that are making after-tax savings a part of their routine, but that's not many people. So best guess, between 10 and 15 years, but I would say more than that because not all participants put back 15%.