How Much Should You Really Save for FI?

Top takeaway: Your ideal savings rate depends on your circumstances today, the lifestyle you want tomorrow, and how much of your plan needs room to breathe. This post shows how to set that range and keep your FI plan alive when life shifts.

1. Choose a savings rate today you can keep

Experts often say “save 50%.” But that figure doesn’t work for everyone. Housing, childcare, elder support, and education costs can change quickly. Instead, choose a savings range, perhaps 15% as a baseline with 30% as a peak. If money gets tight, fall toward the bottom end. If life feels stable, aim for the top.

Use the Take-Home Pay Calculator to see how different contributions impact cash flow. If today’s numbers don’t fit, tweak until you find balance.

2. Know the two questions you’re juggling

You're really weighing two separate calculations:

1. What can I save right now? This depends on current income, benefits, and lifestyle.
2. What will I spend in retirement? That includes healthcare, housing, and evolving lifestyle needs.

Tackle them individually. First, secure a sustainable routine. Then you can refine your FI target with better future spending data.

3. Family planning has real cost implications

Costs around starting or growing a family, from fertility treatments to childcare, create significant budget shifts. These aren’t small blips; they can set your savings back years.

Here’s how to respond:

• Build a “high-cost year” budget and a “baseline year” budget. Use both in your planning.
• Prioritize employer match and high-return pre-tax accounts when possible.
• Check your savings rate quarterly. Incremental changes are more effective than stopping completely.

4. Healthcare costs in retirement vary widely

Once you're no longer employer-covered, healthcare becomes a bigger FI expense:

• In the U.S., premiums, deductibles, and out-of-pocket totals can dramatically shift your needs.
• In countries with universal care, those costs may be lower, but other expenses like housing and education still matter.

Add a dedicated "Healthcare" line to your retirement spending plan and revisit it annually.

5. Treat your FI number as a living estimate

Your FI goal should evolve. Start with a conservative withdrawal rate (3.5%–4%), recalibrate expenses yearly, and avoid locking in a number too early.

Tools like the Net Worth Tracker help visualize your progress. The Take-Home Pay Calculator helps keep contributions reasonable.

FlexFI in one page

• Save more when you can.
• Save less when life requires it.
• Review on schedule, not only in crisis.
• Separate today’s savings plan from tomorrow’s spending estimate.

Conclusion & next steps

There’s no universal savings formula. What matters is having a flexible plan you can adjust as life evolves. Try running two scenarios in the calculator, then set a real-world range and use it as your guide.