Today’s post is a follow-up on yesterday’s post about the percentage we save. I only have data for 2012 and in that year we saved roughly 17% of our total earnings. By saving I just extracted our total expenses of that year from our total earnings. These days we’re doing sensible stuff with the surplus such as throwing it into our mortgage, buying index funds and storing it in a savings account. By the way, our emergency fund is sufficient so we don’t have to throw any money in there nor do we expect to having to use it in the near future. But one never knows when it comes to unexpected expenses…right?
I know we can do sooo much better than that lousy 17%. Therefore I am going to set a new goal for us this year. Our target percentage will be….drum rolls please…..25%!
I’ll inform my husband about this later today… 😉
Hmm…if we hang on to a 25% savings rate we’ll be able to retire in 25.3 years according to the table in this great post. 😦 However, we’ve obviously already made a start. Don’t know how many years we’re from actually retiring…but I guess we need to aim for a 50% savings rate rather soon?!
My husband also remarked that we automatically already save near to 10% of our incomes automatically. See, here in The Netherlands employers have to deduct a part of your salary and put that into a retirement fund by law. So, in theory we’re already saving more than 25%. The downside of this system is that the employer usually doesn’t have a choice with which retirement fund your money is invested. This certainly counts for myself and my husband. An even bigger downside is that the government won’t just allow you to cash in on this money. Retirement age used to be 65 and it will be 67 shortly. By the time we’re old enough to retire “officially” the retirement age will be 70+. This means that we just ignore whatever we have sitting in those funds, since we aren’t the ones calling the shots about the dough.
Do you have a certain savings percentage in mind for this year?