Am I saving enough?

Quick question: Would it be easier for you to save 20% of your monthly income, or to live on 80% of your monthly income?

In case you answered, “Save 20%,”  you are just average (sorry for being so blunt) and might be suffering from the Loss Aversion Bias.

In case you answered, “Live on 80%,” you belong to the vast majority of people who took part in that survey.

In case you answered, “Neither,” it is time for you to crack your head and find ways to save more for retirement.

In case you answered, “Hold on, both options are exactly the same,” you are most likely in control of your mind and are not easily tricked by biases.

And in case you answered, “What?  Saving only 20%?  I already save much more than that,”  then you are a hero and a role-model: for me and many others.

Don’t feel like a hero?  I assure you that “feeling-like-a-hero” will set in latest when you retire and start to enjoy your comfortable nest egg without regrets.

nest egg

Sometimes, a change in perspective helps one to find the required motivation to overcome procrastination.

Many people struggle to save even 5% of their income.  With an average workday of 8 hours, they would work only 24 minutes a day for their retirement.

That’s ridiculously little, don’t you agree?

And now, let’s be frank.  What percentage of your monthly income are you putting aside regularly for retirement?

Let us know and drop that figure into the comments box below, so that we can gather a nice benchmark.

Ok, I admit that I have not provided a firm answer to the above question as to whether you do save enough.  Actually, that is very difficult and subjective and is dependent on the life-style you strive for after your corporate life.

What could help is punching in your own personal financial targets into one or many of these comfy calculators in order to see how much you should save monthly or yearly now.


  1. I am probably saving about 30-50% of my income. Consistency is harder to achieve month after month. Buying Insurance also a part of expenditure.

  2. well if you’re a Singaporean or PR, the CPF contribution (yours +employers) each month accounts for 37% of your monthly wage (up to $6000 and if below 55)! Of course many people use up all their CPF-OA amount towards housing, so effectively whats left for retirement (special account + medisave account) is less (depending on your age). On an overall basis, I’ve been saving 40-50% of my gross annual pay (including bonuses etc) but these savings include those for purposes other than retirement (kids tertiary education etc). pure retirement only is around 25%.

    • Yes, that’s exactly the challenge. A lot of Singaporean believe that CPF will provide them a cushy retirement. But often the start retirement asset rich (having a nice place to live) but not enough cash to spend on daily expenditures and all those trip we dreamt of taking while working so hard to achieve retirement.
      CPF alone is definitely not enough.
      Thanks for commenting Serendib.

  3. Hello Andy,

    This is my first time reading your blog. I found your interests similar to my. I am a big fan of behaviour economics and how the mind messes with us. My wife and I have a 2020 goal to be “semi-retired”.

    My wife and I spend about 25% of our combined income or we save 75% of our monthly income. Bonuses are mostly saved. We count ourselves as lucky people with jobs that pay a decent salary (subjective) and close to stingy spending habits, hence the percentage saved could be somewhat misleading when compared with others.

    Unfortunately, 75% of our asset is in cash. It took a while for us to combine our asset into joint accounts. We have now better visibility on available cash and portfolio reports.

    Now we buy into the market during pockets of opportunity but we have regular savings into ETFs.

    • Hi Khong Beng,
      I am glad that you found my blog. I do have a huge section on cognitive biases. Let me know what you think about those posts.

      Congrats on achieving such a huge savings percentage.

      The crux is that in this low interest environment cash is losing purchasing power over time and we have literally no choice but to go into higher return asset classes. Higher returns often means higher volatility, which is something we have to be mentally prepared for. Studying behavioral economics and our ‘natural’ inclination to be fooled by our ancient brain can help in being prepared.
      However, studying biases can in fact make us more vulnerable to overconfidence and the confirmation bias, as you come to see the influence of cognitive biases all around you—in everyone but yourself. And the bias blind spot, unlike many biases, is especially severe among people who are especially intelligent, thoughtful, and open-minded.

  4. I reckon the minimum monthly savings % should be about 30% for a person to make any real progress towards retirement. Ours is averaging about 40% for now but we need to work on increasing this (definitely overspending in some areas)!

  5. I seem to be able to save above 75% of my income since Jan till now. That said, I’m single, and still living with my parents….will prob be hit by the hard reality ($$$$$) once I am married with my house + expenses

    • Keep it up, Cherry. I mean the savings not the being single, of course.
      Saving for a future home is a great goal. Just don’t plan to spend too much on your wedding. So many people – in hindsight – regret having spent way too much on their wedding.

  6. Hi Andy,

    A good question to ponder.. My saving % for investment varied from month to month between 20% to 30%. 😉

  7. I set aside 65% of my take home pay for investment purposes

  8. Ha! Ha!
    When i read Qs, i think what ?
    Isn’t it the same saving 20 % or spending 80%?

    Simple minded me never have target of saving, just try not to spend money unnecessary till today.
    But as i am getting older, funny i find it harder and harder to not to spend more than necessary.
    Why ah………..?

    • Hi Temperament
      That shows that you are in control of your mind and are not easily tricked by biases. Or should I write ‘were’ instead of ‘are’?
      Stay strong and resist those costly temptations.

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