Saving for Federal Retirement – Understanding your Savings Rate is key.
This month we introduce you to one of the most important financial vital signs that you should know when monitoring your financial health. Savings Rate (Sr) is where it all starts for many of us. Let’s dig in and find out why you need to have this score dialed-in. This is a score you need to be on top of if you are going to win your Battle for Financial Independence.
Why is Savings Rate (Sr) so critically important?
Put simply, it’s a key indicator of your current financial wellness. It’s also important to monitor over time so that you get an idea of which financial behaviors affect your Savings Rate (Sr) for the better. You’ll want to consider identifying and keeping those positive behaviors in your everyday life.
Examples of what counts toward Savings Rate (Sr)?
It would be any dollars put away for safe-keeping, such as:
- Extra Mortgage Payments
- Thrift Savings Plan (TSP) contributions
- Employer TSP contributions (we all overlook this one)
- 403(b) or 457 contributions
- Health Savings Accounts (HSA) contributions (including the portion contributed by the plan!)
- Contributions to Taxable Brokerage Accounts
- Traditional or Roth Individual Retirement Account (IRA) contributions
- Money stashed in a general Savings Account at a bank
- Heaven-forbid, but any Cash you stuff under your mattress
It all counts toward your Sr and if you are doing even one of the above then you are in the fight for your financial independence. If you feel like you want to do a little better in the area of saving, then today is the day! You are resilient, strong and a leader for you and yours – make today the day you get-after-it!
Score Ranges
Average savings rates generally fall between 10% and 30%. A smart MoneyArmor™ Move is to consider allocating a portion of any new income to savings – think Cost of Living Adjustments (COLAs), Grade or Step increases or salary increases from a spouse’s promotion.
This is a fairly straightforward but powerful rate. It’s so important, we use it as one of the key elements in building Financial Scorecards for our clients. Charles Michael Financial serves Federal Agents. It’s the ONLY registered financial planning firm in the nation built specifically for that purpose. We are customized to you. Our cutting edge software captures all the items that go into a Sr score. This is a huge win for our Federal Agent financial planning clients. We even use this software in our MoneyArmor™ Membership coaching platform.
What do you use to calculate your Savings Rate (Sr)? Advanced financial software or the back of a bar napkin? Either way, get an accurate Sr score so you can get better oriented to your money!
Download the free guide below, pin it to your wall and start saving! You must start to believe that you are UNSTOPPABLE in the Battle for Financial Independence!
Be the Hero for You and Yours!
