12 Comments

  1. Hey we had roughly 60% savings rate in 2016.
    I don’t think the 72t distributions need to be accounted in the calculations since it was your money to begin with, in effect you are taking money out of your right pocket and into your left (it probably also explains the over 100% savings rate).

    • Yaacov, 60% is an awesome number. I included the 72t distributions to give a better total income view. Last year we managed to save all of our paychecks via payroll deduction. Our combined net pay for the year was $2.08! Keep up your hardcore savings, Ed

  2. Budrow Wilson

    We have set a goal to save 50% of our income this year. We aren’t sure how to get it done, but half the fun is figuring it out. Thank you for the inspiration and for your increased post volume.

    • Budrow,
      50% is ambitious, and it will speed you on your FIRE path. The posts are coming, but I don’t what to get ready for Friday. It doesn’t help that I’m at the end of a 4-day fast. Let’s see how I feel after breakfast tomorrow.

      • Budrow Wilson

        I agree that it’s ambitious but it takes ambition to become FIREd, right? 50% would double our 2016 savings rate, and I am including early payment of mortgage principle in our savings rate. I think it’s doable.

  3. Jonathan

    1) Would you ever decide to share the spreadsheets you use with us readers? Something to consider.

    2) Am I better off putting money into my 457 & 403b plans instead of say putting money that would have gone in my 403b into a Vanguard Target Date Fund? Wouldn’t the investment money grow more over time?

    • Jonathan,
      Here’s a link to a spreadsheet; save a copy for yourself and have fun. As for your second questions, it depends how much you’re saving. If you’re saving less than $5,500, I’d say stay with your Vanguard fund (it’s in an IRA, correct?). However, if you want to go full-on, crazy hardcore savings mode by maxing them all out, I say load the 457 first, then the 403b, and then your IRA. Why? The 457 could be like a savings/freedom account if you left your current employer, the 403b can only take contributions from Jan. to Dec., but the IRA can receive contributions until April 15th of the following year. At least, that’ how I view it. Like I said if I were saving less than $5,500, I’d stay with just my Vanguard IRA.

  4. ElleX

    Happy New Year!!!! I find that calculating your savings rate really depends on what formula you use…lol. (I found several formulas).

    Let’s use this one: Personal Savings Rate = Total Personal Savings / Total Income After Tax

    My personal savings rate came up to 45.75% (without ER contributions) and 60.72% (with ER contributions). Compared to 2015 (29%), this is a great improvement.

    This year’s goal is 60% (pre ER contributions).

    My high savings rate is all thanks to you, Jeremy, Justin and Pete.

    Thank you for opening my mind to all the possibilities!!!!

    • ElleX,
      I’m with you. There are many ways to look at your savings rate; that’s why I have 4 posted. Your goal of 60% is awesome. I think our focus on “hardcore savings” is the most important element of our wealth building. Debt avoidance, prudent investing, and frugal living are all great, but hardcore savings grows you bottom line QUICKLY. Coupled with those other three elements, it leads to almost automatic net worth growth.

      Wow, I almost wet my pants when I say myself mentioned with 3 of my FIRE heroes. Thanks for the compliment! It makes me feel good inside when people derive value from anything I post. Thanks for making my weekend. Ed

    • Hello Mr. RIP,
      We spend more than $8k in 2016. We get $18,375 a year from 72t distributions from our IRAs. I was able to raise my savings rate by loading my HSA ($5,062) and ESA ($2,000) in January. I also put $3,000 in a Vanguard index fund that same month. Then, we had our entire paychecks sent to our 457 and 403b accounts. If we ever take another teaching job, we plan on continuing this hardcore savings method. Thanks for visiting. Ed

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