I was reading an old article from last year on early retirement that proposes saving 75% of net income if you have a goal to retire early but the extreme frugal lifestyle experienced by the author put me off a bit.
It made me wonder how much my wife and I were saving as a percentage of net income. After crunching the numbers, I was a bit surprised to see that we saved 100% of net income last year. I didn't even realize this was possible, but since we max out contributions to our 401k and 403b, my ESPP (IRS limit), and I receive a decent match from my employer (401k) plus the employer paid cash balance contribution, our net worth increase from pre and post tax saving totaled the amount that we took home. It was a pleasant surprise...and we didn't even try to be frugal!
It made me wonder how much my wife and I were saving as a percentage of net income. After crunching the numbers, I was a bit surprised to see that we saved 100% of net income last year. I didn't even realize this was possible, but since we max out contributions to our 401k and 403b, my ESPP (IRS limit), and I receive a decent match from my employer (401k) plus the employer paid cash balance contribution, our net worth increase from pre and post tax saving totaled the amount that we took home. It was a pleasant surprise...and we didn't even try to be frugal!