What's The Ideal Amount to Save-Without Burning Out?

[@nemophilismpassero]

awesome content, heard about this referenced in chooseFI. Thank you!

[@johnell2134]

Nicely done! I transcribed the highlights for my children in an email because they refuse to take the time to watch your podcasts, but everyone could use great info.

[@MoneywithKatie]

HAHA, thank you for doing the work! We always keep transcripts of our full podcasts at podcast.moneywithkatie.com if that helps!

[@TakticalTekniq]

Perfect timing for me. I was JUST looking at adjusting my 401K rate vs Roth IRA and needed this! Thank you. (And bonus points for not just saying "it depends" on the ideal save rate. Even though no one number will work for everyone, it's helpful to hear your logic behind choosing the 35-40% rate.)

[@MoneywithKatie]

I'm so glad you found it useful! Thank you for watching and for the kind words 🥹

[@STKTSTKT]

This is a great video. For savings rate - how do you calculate this, given employer match to 401K? I.e. is it (amount invested + match amount) / (total pre-tax income + match) OR (amount invested + match amount) / (total pre-tax income)? Or a variation replacing (pre-tax income) with (gross income-tax), or net income including removing 401K/Roth/HSA contributions? Especially on a lower range income?

[@MoneywithKatie]

Great Q! You can't just look at your take-home pay, you have to look at your take-home pay + the money you're putting in your 401(k) every month/a match. That's technically part of your income, it's just being saved before you see it!

[@SamanthaTown]

Great video! Also, pet your cat!!!! LOL so cute

[@MoneywithKatie]

My lil SamCat 😽

[@appleztooranges]

Thanks awesome 👏

[@WanderingTorie]

I'm curious if the save rate you speak about includes 401k savings? Or is this strictly take home pay that we are saving/investing separately from 401k?

[@MoneywithKatie]

Great Q! You can't just look at your take-home pay, you have to look at your take-home pay + the money you're putting in your 401(k) every month. That's technically part of your income, it's just being saved before you see it!

[@yvonnejimenez9050]

@@MoneywithKatie Adding on to this, I'm curious whether the 35-40% save rate considers the 401(k) employer match as well? Thanks for all your help!

[@MoneywithKatie]

@@yvonnejimenez9050 Yes! That's all money for the future you, so it's still saved :)

[@appleztooranges]

Started a tax brokerage in 2025. Started a Roth IRA in 2024 and maxed both 2024 & 2025. I also have done about 16-18% of my 457b 13 years ago. Wish I started all this years ago. But couldn’t afford it

[@TheJeanean]

Thank you! As someone starting in their 40s it has felt like a futile effort.

[@MoneywithKatie]

It's never too late to start - and hopefully this showed that!

[@petew1]

I've been working towards my FI goal for about13 years now. I started with MMM and Financial Samurai and have heard the advice from frugality to income growth. 10 of those 13 years, I had a savings rate in excess of 50%, with a handful of years above 70%. I keep up with financial information as I get good tidbits once in a while. This video was great Katie because it covered a topic I had never heard before. Approaching savings not from a "more is better" approach, but from a view of "diminishing returns" was refreshing. I've made lifestyle improvements recently and that savings rate will be down to the sweet spot of 35ish%. One other potential view on the sweet spot of savings rates is that as you make more, and save more, taxes as a percentage of that income goes up as you qualify for higher brackets. Your video was crystal clear on the sweet spot, but the added complexity of tax brackets only makes your view even more important.

[@MoneywithKatie]

Thank you so much for this thoughtful feedback and comment - and that's amazing that you were able to hit 70% at one point, but very glad you're able to find a balance now too.

[@thousandstar]

Woo time to learn money

[@educatedwanderer9293]

I started investing at 28, with 10% of my gross income. At age 46 I bumped it up to 35% and continued that until age 55. I will keep going at that pace until I reach 60. I think I will reach my goal plus a million because I have already met the initial goal.

[@logicalmisery3737]

Only started a good paying job at 35 so I've been saving like crazy around 60% because it felt like I'd never catch up to the mythical kids who started at 18. Starting to figure out that I can relax just a little bit, maybe, still not sure by how much.

[@zlparrish]

That's some fun data. Thanks!

[@MoneywithKatie]

Thanks for tuning in!

[@fernandotapia9511]

Thank you Katie..very helpful as always.

[@CalmerThanYouAre1]

Increasing income while keeping expenses low-moderate is the key. Other major factors to consider over the FI journey are that your housing and transportation costs should go down dramatically later in your FI journey when your mortgage and auto loans get paid off and your transportation frequency is substantially reduced. Factors like these, as well as the eventual addition of social security make the savings rate chart not the best data source for planning. You may be spending $100K during accumulation but only need $50K of portfolio income for the majority of retirement.

[@dcstreet5037]

Thank you for this. It's all well and good to tell people to save 70% of their income, but there does come a point when you can take the joy out of life today for the sake of having a lot of money when you're old. Your 35-40% target seems very attainable and reasonable, and I thought this was a good way to illustrate the tradeoff and where the cost/benefit ratio doesn't look so great anymore. I did have a question with regards to using net vs gross: is it better to factor in your tax rate at some point in this and your expected tax rate in retirement? After all, you will likely have to pay taxes on your retirement income so withdrawing $60k won't fund $60k of spending necessarily. So, wouldn't that increase the FI number and extend the timeline a bit? And would doing the same thing just using 35-40% of your pre-tax income account for that? Or maybe all it would take would be to make the Income column after-tax but then scale up the FI number column for a given tax rate and see how many years it takes then.

[@blaf737]

Fantastic adaptation of save rate + SFR. Great stuff as always katie!

[@MoneywithKatie]

This is so kind, thank you!!

[@imojen83]

Great and informative video! Thanks! I'm aiming to start hitting 35% 2 years from now. That's when my student loans will be paid off along with any consumer debt (this debt likely next year). I've had the 20% mastered for awhile and often can hit the 25%. I'll scale to 30% next summer and then the following summer is when 35% will start to happen.

[@MoneywithKatie]

You got this!

[@hcpirate]

One more thing with regards to savings rate and income. I always had a savings rate of about 50%, even when I worked part-time as a babysitter vs now as a tech employee. It is true that it is easier to save more with a higher salary, but if we consider that higher salaries are typically linked to seniority, I don't find it necessarily easier to have the same level of expense. I used to live with roommates in a run-down house, now we live in an amazing apartment and prepare to have a family. Instead of relying on public transportation, we have a car etc. I hope that for most people, their income grows as they advance through life.

[@hcpirate]

Ah, this is amazing, thank you so much! My personal post-net savings rate is 63% at the moment, and I am kinda dreading the time we will need to pay for our future child like daycare, nannies, babysitter, hobbies, etc. (Which will happen in November this year!) and therefore, a drop in savings rate. However, we live in Israel, and our pre-tax contributions are already amazing. 20% of our BRUTTO goes into our pension funds > 34% of netto income. In addition to that, we have a mid-term tax-free investment vehicle that allows people to deposit an amount that is equal to 5% of my brutto, or 8% of my net salary. (there is a predefined tax-free amount, so it's not proportional to income). So, I have a net-savings rate of about ... 105% my net income. Haha. Whoops. I definitely got nothing to worry about. From the stance of the perfect savings rate, 45% appeals the most to me since 16 years to financial freedom is definitely better than 21 years at a savings rate of 35%. Much calmer now that I know dropping from 63% to 45% will still allow me to achieve financial independence early.

[@jjstokes7283]

The problem is if you are investing in stock market, and another 2001, 2008 happens that changes everything.

[@trackguy4038]

Are you a Boglehead? Do a story on them.