Increase Retirement Savings Rate to Extent You Can

Quick Look

  • Based on the items you already completed in the Growth tier, you should be ready and able to increase your savings rate from the percent you previously set.
  • Use the MoneySwell Cashflow Goals tool, review your net income and expenses.
  • See if there are any areas where you can grow your income (through existing employment or side job work) or reduce your expenses to increase the amount you save each month.
  • Set your automatic savings and investment purchases to a higher rate or dollar amount.


Your Higher Savings Rate

In the Growth tier of your plan, you completed major tasks. These included funding your emergency fund up to 3-6 months of living expenses and paying off all your medium-interest debt. Additionally, in the “Growth” tier we provided a generalized recommendation to save “as much as you can” or “10-15%” of your pretax income for long-term/retirement savings.

But take note: This is the last time we’ll provide a generalized recommendation for increasing your savings rate. After this your tasks will be based on specific calculations to ensure you hit your goals.

Savings Benchmarks for Long-term Investments

Having something to shoot for can be helpful even when attempting to complete a generalized task like “increase your savings rate.” The items below represent possible benchmarks for how much you can increase your savings by. Choose one that works for you and your budget or something else entirely. But push yourself to go for the largest one you can.

  • Debt Payments: If you previously had debt that you paid off in the Growth tier, use whatever amount you were putting toward debt payments to now put toward long-term saving.
  • Emergency Fund Payments: If you previously set savings rate to grow your emergency fund, and your emergency fund is now between 3 and 6 months, consider diverting those payments – or 50-75% of them to long-term savings. How much you divert will depend on your comfort level with your existing emergency fund, your desire to grow it further, and the pace you still want to see your emergency fund grow (if at all).
  • A Net 3% Increase: If your previous long-term savings rate was 6%, a 3% net increase would bring it up to 9%. If it was 9%, a net 3% increase would bring it up to 12% etc. Whatever your starting point, 3% is likely to feel just noticeable but not hurt too much and will help you boost your long-term savings.
  • $100, $200, $300: Simple, round numbers like these are easy to quantify and adjust to in your budget. In the long run, they can have a great impact on your long-term savings.

Ways to Save More

If you’re finding you don’t have funds to increase your savings rate by any amount, use the Cashflow Goals tool to review your income and expenses. 

  • Expenses: Have you experienced “lifestyle creep” as your financial situation improved? If so, that’s understandable and possibly even acceptable. But take a moment to think about the areas of “creep” you get real value from vs. those expenses that have crept higher simply due to laziness or convenience without adding much value.

    If you have other very legitimate reasons for increased expenses (e.g. a new child in the family, medical costs etc.), acknowledge that. There’s nothing wrong with a leading a life that costs more than the life you lead before. However, you should also acknowledge your desire to save more for your future. Once you’ve done this, you can confidently move on to thinking about ways you can grow your income.
  • Income: If your income has stagnated or dropped, you’ll need to find ways to increase your income if you want to save more. Take a moment to consider if your best avenue is through existing employment, new employment, or some kind of side gig work. Once you’ve decided the path you want to take, focus your efforts on that track since it’s the focus that is most likely to drive meaningful results. You can always change your tactic later (e.g. you didn’t get the promotion at your existing job but you learned something along the way and you can now focus on finding a new job with a different employer). 


Remember, this is the last task where your plan gives you the flexibility to increase your long-term savings by a generalized amount. In the next task you’ll be faced with specific numbers that you’ll likely need to hit to achieve your goals. If you’re already using the MoneySwell Retirement Planner, remember not to get discouraged if even this new savings amount doesn’t put you on track. We recommend reading the examples of different life phases outlined here to clearly see how a person might move from being “off track” at one point, to being “on track” later.

All that said, the more you save and the earlier you save it, the better off you’re likely to be. So, push yourself to save as much as you can now and get creative with how you do it. Doing so will make it that much easier to check off your future long-term savings tasks.

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