The 20% Savings Rate

In this video The White Coat Investor does a Deep Dive into The 20% Savings Rate.
The White Coat Investor has been helping doctors with their money since 2011. Our free financial planning resource covers a variety of topics from doctor mortgage loans and refinancing medical school loans to physician disability insurance and malpractice insurance. Learn about loan refinancing or consolidation, explore new investment strategies, and discover loan programs specifically aimed at helping doctors. If you're a high-income professional and ready to get a "fair shake" on Wall Street, The White Coat Investor is for you!
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00:00 The 20% Savings Rate
01:04 How To Calculate Your Savings Rate
02:33 How To Retire Early
04:38 How To Increase Your Savings Rate

[@robertw5391]

I received a 50% take home raise. I live at the same place. Drive the same vehicle. It all goes to savings. Best advice I received was act like it’s not there. If you use it, it becomes normal.

[@OurRetireEarlyJourney]

Savings rate is the most critical component of financial health pre-retirement. Last month our savings rate was 80% and YTD was 60%. If you want to retire early, you have to aggressively save!

[@imdoc7872]

Thanks doc. You answered my question exactly. I was wondering if a taxable brokerage account counts towards the 20% savings. Unfortunately my job does not offer good retirement investments so I had to open a taxable brokerage account to get to the 20%.

[@Random-ld6wg]

once i was an attending i saved 25-35% and invested it. my bonuses were saved and raises were mostly saved with fairly minimal lifestyle creep. fortunately there wasn't much inflation from 2010-2020. we lived on the same amount pretty much during that decade. i saved typically about 70K minimum per yr for an 11yr same job stretch but this included hsa and 529 for my son. finished residency 1996 and retired in 2021. that being said we didn't/don't have a doctor lifestyle. i consider my hsa as part of my retirement assets as i can tap it more as i have increasing healthcare costs as i age and for medicare premiums. i am saving receipts and paying out of pocket for now. from 0 end of residency to mid 7 figures by retirement in 25 yrs.

[@Pashinator1]

Would you include posting into mortgage into that 20%?

[@thewhitecoatinvestor]

No, the 20% is only including savings directly for retirement.

[@anderacpharmd]

What about contributions you're making towards a pension? What about contributions your employer is making towards your pension? Do these amounts count towards the 20% savings rate?

[@thewhitecoatinvestor]

Yes