What's Your Savings Rate?
Your savings rate is the single most important factor in your financial journey. See how you're doing and what it means for your future.
The percentage of your nest egg you'll withdraw each year in retirement.
Your Savings Rate
19.2%
of take-home income
FI Nest Egg Target
$1,500,000
in today's dollars
Years to FI
40.7 years
How this works
Growth is projected using the real (inflation-adjusted) return — the nominal annual return you enter (default 7%), deflated by your inflation input (default 2.5%) — compounded monthly, and every dollar figure is shown in today's purchasing power rather than future inflated dollars.
Savings rate is computed against take-home income, not gross income, since a rate is only meaningful against money you actually receive.
Key assumptions
- savingsRate = (monthly savings × 12) / (gross income × (1 − effective tax rate)); effective tax rate defaults to 22%, an all-in average rate across federal, state, and payroll tax — not your marginal bracket.
- FI number = desired annual retirement income / safe withdrawal rate (default 4%).
What this leaves out
- Sequence-of-returns risk — growth is a constant rate, not a real market path.
- Fees — expense ratios and advisory fees are not deducted from the return.
- Taxes in retirement — withdrawals are treated as spendable in full; account type (traditional, Roth, taxable) is not modeled.
- Income growth — savings and contributions stay flat in real terms.
- Irregular spending — no college costs, home purchases, medical shocks, or windfalls.
Related calculators
A worked example: $1,000 a month on an $80,000 salary
Take a 30-year-old earning $80,000 gross with a 22% effective tax rate, saving $1,000 a month against $25,000 already invested. Take-home is $62,400 a year, so the $12,000 saved annually is a savings rate of 19.2%. Note what that number is measured against: gross income would have given a flattering 15%, but you cannot save money the IRS already took.
Spending $60,000 a year in retirement at a 4% withdrawal rate sets the FI number at $1,500,000. Projecting $25,000 forward at the real return — 7% nominal deflated by 2.5% inflation, compounded monthly — with $1,000 added each month, the portfolio reaches $1,500,000 in 40.7 years. Every figure here is in today's dollars, because the growth rate is already inflation-adjusted; there is no larger future number to guess at.
Forty years is the honest answer to a 19.2% savings rate, and it is the reason savings rate dominates every other input. Raising the monthly contribution is the lever with real leverage here — returns you do not control, and the FI number only moves if you change how you intend to live.
Frequently asked questions
What is a good savings rate?
There is no threshold that makes a rate 'good' in isolation — the rate maps directly onto a timeline, and the timeline is what you should judge. At the example above, 19.2% of take-home puts FI 40.7 years out. Because the relationship is exponential rather than linear, the gains from pushing the rate up are largest in the middle of the range: moving from 20% to 30% buys back far more time than moving from 60% to 70%. Pick the timeline you want, then use the FI Planner to solve for the rate that reaches it.
Should I measure my savings rate against gross or take-home income?
Take-home, which is what this calculator does: savingsRate = (monthly savings x 12) / (gross income x (1 - effective tax rate)). A rate is only meaningful against money you actually receive. Measuring against gross income makes the same dollars look like a smaller share of a bigger number, which understates your rate and, worse, makes your rate depend on your tax jurisdiction rather than your behavior.
Does my employer 401(k) match count toward my savings rate?
This calculator takes whatever you enter as monthly savings, so the choice is yours — but be consistent. If you count the match as savings, count it as income too, otherwise you are dividing a bigger numerator by an unchanged denominator and inflating the rate. The cleaner convention is to include the match in both, since it is compensation you are choosing to invest.
What is the 4% rule, and why is it the default here?
The 4% rule comes from the Trinity study (Cooley, Hubbard and Walz, 1998) and Bengen's earlier work, which found that a 4% initial withdrawal, adjusted for inflation each year, survived 30-year retirements across historical US market data. It sets the FI number at 25x annual spending — $1,500,000 for $60,000 of spending. It is a planning heuristic, not a guarantee: it was derived from one country's history over one set of 30-year windows, and it says nothing about sequence-of-returns risk. The withdrawal rate is an input here precisely so you can test something more conservative.
Why does this projection ignore my raises?
Deliberately. Savings and contributions are held flat in real terms, so the projection answers 'where does my current behavior lead?' rather than 'what if everything goes well?'. Raises usually raise spending alongside savings, and modeling optimistic income growth is the easiest way to build a plan that only works if the optimism holds. If you expect a step change in income, re-run the calculator with the new figures rather than trusting a growth curve.
Sources
- Determining Withdrawal Rates Using Historical Data
William P. Bengen, 1994, Journal of Financial Planning — checked 2026-08-12
The paper that established the '4% rule' — the foundational research this site's safe withdrawal rate defaults trace back to.
- Retirement Savings: Choosing a Withdrawal Rate That Is Sustainable
Philip L. Cooley, Carl M. Hubbard, Daniel T. Walz, 1998, AAII Journal — checked 2026-08-12
The 'Trinity study,' which expands on Bengen across a range of withdrawal rates and portfolio mixes. Only Table 3 in the original paper is inflation-adjusted — the commonly-quoted near-100% success rates come from the nominal-withdrawal Tables 1-2.
- Safe Withdrawal Rate Series
Big ERN, Early Retirement Now — checked 2026-08-12
A practitioner blog, not peer-reviewed — the most detailed public research on SWR sensitivity to horizon length and asset mix.
- State of Retirement Income: 2025
Morningstar — checked 2026-08-12
Forward-looking base-case starting withdrawal rate, cited for context alongside the fixed 4% default this site uses. The ~3.9% figure is search-attested rather than directly confirmed against the source — treat it as a data point, not a recommendation, and worth checking whether a newer edition has superseded it.
*The calculations provided are for illustrative purposes only and should not be considered financial advice. Please consult with a qualified financial professional before making any decisions.