Savings rate
Your savings rate is the share of your income you save or invest. A common rule of thumb is to put at least 15% of pre-tax income toward retirement, counting any employer match.
🌍 In the real world
The rate matters more early on than which investments you pick, because the amount you add drives growth for years before returns do. People who start late may need to save more than 15% to catch up.
Automatic payroll contributions and raising the rate by a point each year are common ways to get there without feeling the change. None of this guarantees a result: what the money becomes depends on markets, which can fall.
Formula
Savings rate = money saved ÷ income
Example
Earning $50,000 and putting $6,000 in a 401(k) with a $1,500 match is a 15% savings rate.
🎮 In Journey Shares
Step 6 of the money plan asks for at least 15% of your net worth in ETFs, the game's diversified funds. →
🧭 How to use it
Put at least 15% of your net worth into ETFs, the game's diversified funds, before making concentrated bets on single people.
🎮 Learn Savings rate the fun way
Try it in a live 3D city with play money: trade shares in real public figures, get margin-called, pay your taxes and rob a bot or two. Free, and nothing real is at stake.
❓ Common questions
Is 15% enough?
It's a rule of thumb, not a guarantee. Someone who starts late, wants to retire early or has no pension may need more, and nobody can promise what markets will return.
Does the employer match count toward 15%?
Most versions of the rule count all contributions, including the match.
📜 Where it came from
🧩 Quick check
Which term is this?
“____ is interest earned on both your original money and the interest it has already earned, so savings grow faster over time.”
🔗 Related terms
- 401(k): A 401(k) is a US retirement account offered through an employer.
- Employer match: An employer match is money your employer adds to your retirement account when you contribute, such as 50 cents for each dollar you put in, up to a set share of your pay.
- Compound interest: Compound interest is interest earned on both your original money and the interest it has already earned, so savings grow faster over time.
- Dollar-cost averaging: Dollar-cost averaging means investing the same amount at regular intervals, whatever the price, so you buy more shares when prices are low and fewer when they're high.
- ETF (exchange-traded fund): An ETF is a fund that holds a basket of investments, such as all the stocks in an index, and trades on an exchange like a single stock.
Categories: Personal finance
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