Category Archives: Anything

Calculate how much can you save with pre-tax commuter benefits

Marginal Tax Bracket
Select the appropriate marginal tax rate matches your income. For example if on your taxes you report $100k in adjusted gross income (AGI) as a single filer, pick the 24% option, because you make at least $84k but less than $160k.


Monthly Commuter Contribution ($265 max/month)



How does this work?

The Pre-Tax commuter benefit works exempts up to $265 per month from Federal income, Social Security, and Medicare taxes. This money can only be spent on eligible travel to work expenses such as public transit passes (commuter trains/buses/vanpool), parking at your employer, or ride-share (Uber Pool/Lyft Line). In general, your employer will partner with another company who will provide the passes and payment cards.

So imagine that if you earn $70,000 a year in Texas, and pay $200 per month in eligible parking fees at your workplace:

Before Pre-Tax Benefit

  • Monthly Income: $5,833
  • Taxable Income: $5,833
  • Total Federal Taxes: $1,238
  • Parking Pass Using Your Credit Card : $200
  • Amount left over : $4,395

After Pre-Tax Benefit

  • Monthly Income: $ 5,833
  • Parking Pass Using Pre-Tax Commuter Benefit: $200
  • Taxable Income: $5,633
  • Total Federal Taxes: $ 1,194
  • Amount left over : $4,439

Savings of $44 / month or $528 / year!

Sure this isn’t a ton of money. But if you’re already auto-paying for public transit passes, ride share (Uber, Lyft), or parking every month to get to work, this is a quick an easy way to save some money with minimal effort. The only downside is that you employer must have an account set up with a benefits provider to allow you to take the deduction.

This calculator is for illustration only, and the tax brackets and contribution limits will likely shift in coming years. Some states will also deduct Pre-Tax Commuter benefits from their state and local taxes so your savings could be even bigger! If your income is right at the border of the break point of one of the marginal tax brackets, your actual savings will vary a little bit. Just something to keep in mind. For more information, the IRS has a very long PDF with all the details
https://www.irs.gov/pub/irs-pdf/p15b.pdf .

One weird thing about the benefit is that your employer may or may not list the benefit in Box 14 of your W2. So I’m not sure how the government tracks how compliant you are with you spending or contributions or if there’s a difference if you have multiple jobs. It seems like there’s a lot of trust in the companies that administer the benefit to do it correctly.

Household Savings Improves to only 36% Spending more than Income

After analyzing data from the 2017 Consumer Expenditures Survey (CEX) by the Bureau of Labor Statistics (BLS), nearly 35.9% of US households spent more than they earned. This is the most recently available data from the BLS. Overall, 46 million out of 129 million US households are estimated to have had expenditures that exceeded their after tax income (table below).

Large Improvements since 2015

Comparing these results to the previously reported ones for 2015’s CEX survey where I reported 38.5% spending more than income, the percentage American households saving has improved significantly. Almost 2.5 million fewer households are spending more than they earn, which is a huge improvement. In addition households tended to save more than in 2015, as the $0-$10k group dropped by 1.4 million households, with large increases in households saving larger amounts of income. One of the largest shifts appears in the decline of household who spent more than $150k than they earned. Shockingly, this category decreased 54%! I suspect that the losses of this size were primarily due to investments and housing losses, and values for both of those assets have increased significantly in the past few years.

# of Households by Savings 2017

The graph below is interactive and show the number of households who are estimated to have saved within a certain amount of income in 2017.  

The original Consumer Expenditures Survey considers retirement contributions as an expense, so the savings rate will be slightly higher if you were to adjust these numbers to account for that. Previously, I reported adjusted numbers from the 2015 data, but they trended very similarly to the un-adjusted values.

Source Data and Methodology

These results are calculated using the 2017 Bureau of Labor Statistics (BLS) Consumer Expenditures Survey (CEX) microdata. I used the pre-exported summary tables to aggregate these values. This is a slight change from the previous report where I used the SAS import. The final numbers seemed to track very closely to 2015’s data, so I don’t believe this adjustment made a huge difference. The microdata contains household level data that is weighted by the BLS on a variety of measures to make the sampled population representative for the whole population. Granted, the smaller you slice and dice the data, the less representative it gets.

Annual Savings Amounts Table

Households 2017: 35.9% of US households spent more than they earned in 2017. This was calculated using the CEX total annual expenditure by household. One thing to note is that the CEX lumps all retirement contributions (401k, pensions, TSP) into expenditures. Household annual savings calculated as : [Estimated Pre-Tax Income] – [Estimated Taxes] – [Estimated Expenditures]. I have adjusted this to add back in contributions to pensions and 401ks so that they do not count as spending. For me personally, I would not consider my 401k contributions as an expense. Social Security is still counted as an expense.

ANNUAL SAVINGS  HOUSEHOLDS (2017)   HOUSEHOLDS (2015) % Change
 <-$150k               864,543           1,867,628 -54%
 -$150k to -$140k               138,558                242,359 -43%
 -$140k to -$130k                 47,988                303,275 -84%
 -$130k to -$120k               269,581                363,365 -26%
 -$120k to -$110k               312,160                411,577 -24%
 -$110k to -$10k0               476,362                513,501 -7%
 -$10k0 to -$90k               419,197                477,909 -12%
 -$90k to -$80k               603,319                581,473 4%
 -$80k to -$70k               619,058                646,504 -4%
 -$70k to -$60k               839,521                932,389 -10%
 -$60k to -$50k           1,166,458            1,215,488 -4%
 -$50k to -$40k           1,640,628            1,833,831 -11%
 -$40k to -$30k           3,053,661            2,888,244 6%
 -$30k to -$20k           5,155,602            5,229,834 -1%
 -$20k to -$10k           9,945,276            9,421,512 6%
 -$10k to $0         20,929,701          21,187,798 -1%
 $0-$10k         25,439,006          26,860,088 -5%
 $10k to $20k         17,318,481          17,137,557 1%
 $20k to $30k         11,672,699          11,312,717 3%
 $30k to $40k           7,991,685            7,590,525 5%
 $40k to $50k           6,102,965            4,965,180 23%
 $50k to $60k           3,785,373            3,342,971 13%
 $60k to $70k           2,304,070            2,250,973 2%
 $70k to $80k           1,620,960            1,584,928 2%
 $80k to $90k           1,550,191            1,064,559 46%
 $90k to $100k           1,032,460                830,612 24%
 $100k-$110k               792,750                659,814 20%
 $110k to $120k               879,661                618,322 42%
 $120k to $130k               539,349                484,008 11%
 $130k to $140k               387,455                347,594 11%
 $140k to $150k               424,410                217,597 95%
 >$150k           1,077,366            1,053,230 2%

Related Topics

Savings Rate Ranking : This uses the adjusted savings rate calculation listed above using 2015 data to compare savings as a percentage of income.
Net Worth Ranking by Age : Compare your net worth against similar ages to get a percentile rank for your net worth.
Income Ranking by Age : Compare your income against similar ages to get a percentile rank for your income.

Supply Chain Professional Salary Progression 2018

Years ago, I used to wonder what my future in supply chain management would be like. With so many different career paths ranging from purchasing, warehousing, transportation, manufacturing, there were a lot of variables to consider. Now with years of experience behind me, I decided to collate together several supply chain salary surveys together. I can compare how well I’ve done in comparison and see what might be coming in the future.

Salaries rise quickly but plateau

As you can see, salaries start at around $67k on average early in a career. They slowly rise to $120k towards the end of a career. This implies that the natural rate of growth per year of experience is about 1.69% annual raises (assuming no inflation) over a 40 year career. That isn’t terrible but isn’t great either. In the first 10 years, the gains per year of experience are significant as the growth rate is nearly double at 3.17%.

The mid career plateau is very evident in that flat section around 10 years of experience to 25 years. At this point in your career people are moving into senior roles. In corporate, that would be senior individual contributor role like managers with no direct reports or senior analysts. In field positions this would be similar to being a manager who is directly still leading front line workers.

The growth rate implied for these years is barely above zero at 0.28%. From my own experience, this period time causes a lot of soul searching. The first few promotions were comparably easier to earn, so hitting that individual contributor cap might feel like a ceiling. And, this frustration boils over into turn over as people get past up for promotions or opportunities. Also some people get complacent and get expensive relative to their output/skill-set. This becomes a risky position during layoffs when a cheap new grad may start to look like an affordable replacement for a senior associate with stale set of skills.

I think I’m getting to the Plateau

I used to worry myself with questions like how quickly should I be promoted. Or I would compare myself too much to my peers and how they were being rated. It’s hard when you’re starting out to figure out what’s normal or not. Looking at my own personal growth, my income started a little bit below the average but quickly shot up as I got performance reviews and promoted. After that whirlwind of upward trajectory, I am getting the feeling that I’m approaching the plateau. As I’m compensated well above average at this point, but I don’t really have an interest in management yet. When I look at my career progression and prospects there isn’t a lot unless I do pursue management or switch into something much more technical like data science.

Sources and Methodology

I created the graph using the listed supply chain salary surveys. The average line is all 4 survey averages averaged by years of experience, the Highest Survey Average Salary represents the survey with the highest value for that experience, and the Lowest Survey Average Salary represents the lowest value for that experience.


Because the years of experience ranges were not exact matches, I populated this table with each year of experience and listed the salary for the experience range for each year. I then averaged across using those values:

Interestingly, the 21-29 age range on MHL salary is $58.7k, which is lower than their listed cohort of 1-2 years at $64k. This seems to suggest that people entering the supply chain profession are slightly older than the 21-29 age group. They also probably have professional experience in other areas. If you are a recent or incoming college graduate, do not despair if your salary is more in the $50ks. It’s totally normal. Your salary will grow quickly if you work hard and show some aptitude.

Since only one of the surveys provided median and average numbers, the numbers presented are using averages. You should keep in mind some highly compensated employees will be represented in the more experienced buckets. Also a lot of these surveys don’t have very deep survey pools and tend to only ask their membership for responses. This could be a problem because the people who are in these trade groups tend to be more involved at work or are high potential individuals who probably earn more.

Sale Price per load of Top Laundry Detergents

I keep track of way too much, and this is one of the rules of thumb that I’ve built up over the years when I’m shopping around for laundry detergent. It’s no secret that a lot of these laundry detergent companies like to make their sales complicated, so I focus on the sale – coupon price per load and if there’s anything else that’s gravy. Also the prices seem to rotate between retailers, so when one place doesn’t have a sale on your preferred brand, another nearby store will have it for sale. One big thing to watch out for is that the normal prices of larger bottles is always lower per load, but during sales the prices of the smaller bottles seem to drop a lot more than the bulk sized bottles.

Laundry Detergent Brands

Tide

  • Normal price : $0.20 – $0.30 / load depending on bottle size
  • Good Sale Price : $0.16 / load. These sales are pretty frequent.
  • Really Good Sale Price : $0.08 / load. This only happens a few times a year and usually won’t repeat at the same retailer.

Persil

  • Normal price : $0.20 – $0.30 / load depending on bottle size
  • Good Sale Price : $0.125 / load
  • Really Good Sale Price : $0.08 / load

Purex

  • Normal price : $0.12-$0.20 / load depending on bottle size
  • Good Sale Price : $0.08 / load
  • Really Good Sale Price : $0.04 / load

Arm & Hammer

  • Normal price : $0.10-$0.25 / load depending on bottle size
  • Good Sale Price : $0.08 / load
  • Really Good Sale Price : $0.04 / load

Share of income earned by the Rich by state ($1m+/year)

Nationally, a small fraction of households report incomes of $1 million or greater per year. But at a rate of about 3 out of 1000 households (0.28%), it is more common than you might think. There might a secret millionaire earner in your contact list.

A few states stand out nationally as having relatively percentages of these ultra earners. The coastal north eastern states earn their reputation as being abnormally wealthy. Several have rates of up to twice has high as nationally (see table):

CONNECTICUT0.63%
DISTRICT OF COLUMBIA0.60%
NEW YORK0.51%
MASSACHUSETTS0.47%
NEW JERSEY0.43%

While there are only 424,870 of these $1m+ households, out of a total of 149,853,100 in the country. They earn a very large share of the nations income, racking in over 13% of total income.

Income share of total income by state earned by households with $1m+ reported income to the IRS.

The list of bottom states for high earners is unsurprising with West Virginia topping that list at a rate of 7 out of 10,000. It’s not exactly a bad thing to have a low portion of ultra high earners in your state. Having a low percentage implies that there is probably a larger amount of income equity in the local economy. But since each state is part of the larger US, having a lower fraction may also imply that certain states are less desirable or economically productive compared to others.

Raw Data by State 2016

Table by State and Percentage of Tax returns that are of households >$1 million in ajusted gross income. % of Total Income is a percentage that these households earned of all the income earned in that state in 2016.

State% of Returns% of Total IncomeTotal Returns
UNITED STATES 0.28%13.34%424,870
ALABAMA0.16%7.63%3,240
ALASKA0.19%5.96%660
ARIZONA0.20%9.02%5,830
ARKANSAS0.14%11.94%1,760
CALIFORNIA0.40%17.73%71,290
COLORADO0.29%11.79%7,660
CONNECTICUT0.63%22.19%10,990
DELAWARE0.19%6.73%850
DISTRICT OF COLUMBIA0.60%18.57%2,070
FLORIDA0.29%16.71%28,420
GEORGIA0.23%9.87%10,050
HAWAII0.15%6.75%1,010
IDAHO0.16%8.92%1,220
ILLINOIS0.31%13.40%19,180
INDIANA0.16%7.74%4,870
IOWA0.15%5.95%2,100
KANSAS0.20%9.10%2,610
KENTUCKY0.13%7.05%2,550
LOUISIANA0.19%8.99%3,830
MAINE0.14%6.20%940
MARYLAND0.28%9.54%8,170
MASSACHUSETTS0.47%17.77%16,160
MICHIGAN0.19%10.15%9,190
MINNESOTA0.25%10.36%6,970
MISSISSIPPI0.11%5.93%1,340
MISSOURI0.19%9.77%5,240
MONTANA0.15%7.46%750
NEBRASKA0.18%8.35%1,650
NEVADA0.27%20.14%3,770
NEW HAMPSHIRE0.23%10.37%1,590
NEW JERSEY0.43%14.23%19,070
NEW MEXICO0.11%5.68%990
NEW YORK0.51%23.37%48,570
NORTH CAROLINA0.19%8.60%8,660
NORTH DAKOTA0.19%8.01%700
OHIO0.17%7.69%9,560
OKLAHOMA0.17%8.54%2,760
OREGON0.20%8.47%3,790
PENNSYLVANIA0.22%10.13%13,860
RHODE ISLAND0.19%8.57%1,020
SOUTH CAROLINA0.18%7.77%3,880
SOUTH DAKOTA0.22%11.19%920
TENNESSEE0.21%11.01%6,160
TEXAS0.26%12.07%31,810
UTAH0.23%11.37%2,970
VERMONT0.16%6.86%520
VIRGINIA0.26%9.19%10,010
WASHINGTON0.30%13.88%10,600
WEST VIRGINIA0.07%3.23%550
WISCONSIN0.19%9.18%5,460
WYOMING0.29%18.57%770
OTHER AREAS [20]0.82%40.61%6,300

Sources

The source of these data tables comes from the Excel files available freely on the IRS website. The figures above are from 2016. https://www.irs.gov/statistics/soi-tax-stats-historic-table-2