How to Calculate Your Savings Rate (and Why It Matters More Than Your Salary)

Your savings rate is the percentage of your after-tax income that you invest rather than spend. It's calculated as (income − expenses) ÷ income, expressed as a percentage.

Savings rate matters more than salary because it affects your timeline in two ways at once: a higher savings rate means you're investing more each month, and it means your target expenses (and therefore your FIRE number) are lower. Someone earning $60,000 and saving 50% can often reach FIRE faster than someone earning $150,000 and saving 10%.

A simple way to estimate the relationship: at a 6% real return, a 10% savings rate takes roughly 51 years to reach FIRE, a 25% savings rate takes about 32 years, and a 50% savings rate takes about 17 years. The exact number depends on your starting portfolio and expected return — use the calculator above to see your own trajectory.

Most people find the fastest way to raise their savings rate isn't through extreme frugality on everything, but through a small number of large, recurring expenses (housing, transportation, and food are usually the biggest three) rather than cutting many small discretionary purchases.