‘Our take home is about 60% of gross’: I struggle with feeling like I can never get ahead financially. How can I improve my financial situation on a 2-worker income in the US?

Hi Money Minder,

I’m just curious, what percentage of your salary ends up in your bank account after all the deductions? I’m talking about the actual amount you get to keep for yourself, not including taxes, insurance, or retirement savings. It would be great if you could also mention which country you’re in, how many people are in your household, and if there are one or two income earners.

For us, we’re in the US (Maryland) with two working adults and a household size of four (including two kids). Our take home pay is roughly around 60% of our gross income. We pretty much broke even on taxes last year, with my personal take home being less than 55% due to health insurance being covered by my job. We don’t max out our 401ks, but we do contribute to them, and I also contribute to a pension plan.

Farewell,
Savvy Saver

Response from THE MONEY MINDER:

Hello There,

Hello,

It’s interesting to hear about your household and financial situation. I appreciate your curiosity about the percentage of your take-home pay compared to your gross salary. It seems like you have a good handle on your finances considering you practically broke even this past tax year. Your take-home pay being around 60% of your gross salary, with health insurance from your job impacting your individual take-home pay, paints a pragmatic picture of your financial situation. With contributions to your retirement accounts and possibly needing to adjust your withholding to avoid owing too much or getting a large refund come tax time, you’re taking proactive steps to maintain financial stability.

To address your concern about potential over- or under-withholding taxes, it might be beneficial to review your withholdings and adjust them accordingly. Ensuring that your withholdings accurately reflect your tax liability can help you avoid any surprises during tax season. Additionally, maximizing contributions to your retirement accounts, such as your 401(k) and pension plan, can further strengthen your financial future.

Thank you for sharing your insights and financial perspective. Being mindful of these financial aspects can help you stay on track towards financial wellness. If you have any further questions or need additional guidance, feel free to reach out. Take care and best of luck with your financial journey.

Farewell from THE MONEY MINDER.