Find Your Current Savings Rate

Your savings rate is one of the most important factors in reaching FIRE. It determines how much of your income is actually going toward financial independence versus being spent on day-to-day expenses.

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How to Calculate Your Savings Rate

1. Find Your Total Savings

Add up how much money you’re saving each month, including:

• 401(k) and IRA contributions
• HSA contributions (if applicable)
• Brokerage account investments
• Cash savings
• Investments

2. Find Your After-Tax Income

This is the amount you take home after taxes, including:

• Salary
• Bonuses
• Rental income
• Side hustles

3. Use the Savings Rate Formula

Savings Rate = (Total Savings / After-Tax Income) * 100

Example Calculation:

• Total Monthly Savings: $2,000
• After-Tax Income: $5,000

(2,000 / 5,000) \* 100 = 40%

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How Savings Rate Affects Your FIRE Timeline

Savings Rate	Years to Retirement
10%	51 years
25%	32 years
50%	17 years
70%	8 years

The higher your savings rate, the faster you reach FIRE because more of your income is working for you.

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Tips to Increase Your Savings Rate

✔ Automate savings – Set up automatic transfers to savings and investment accounts.
✔ Reduce unnecessary expenses – Track your spending and cut back on what doesn’t add value.
✔ Increase your income – Negotiating a raise or adding side income can accelerate savings.